Welcome to The Discovery Trading Group

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Nov 292011
 

We are a group of professional and amateur traders founded by principals of a quantitative research firm which develops strategy and periodicity diverse programs and risk modeling tools. Our own internal process involves using this webspace as a collective resource for sharing both discretionary thoughts during intraday sessions and as a sort of virtual think tank for our ongoing quant research. A big part of that research has consistently shown that the ‘Holy Grail’ of the purely mechanical, single market intraday trading strategy that produces near linear returns without significant ongoing adaptation DOES NOT exist. As such we have found that for most traders pursuing single market intraday strategies, an adaptive, risk management focused discretionary approach is likely to bear the most fruit. Ironic, given that rigid, purely mechanical systems are what the vast majority of retail traders (including us at one time) seem to be in relentless pursuit of. 

In the spring of 2010 we created a private, member only forum behind the blog devoted to our ongoing discussions related to discretionary analysis of market structure, price action and order flow to like minded retail traders as a sort of experiment. Since we have always found the format in which we use this space privately to flesh out ideas to be so beneficial, we wondered if it might be even more fruitful to increase the sheer numbers of those participating in this process and with that, DTG as it exists today was born. By any measure, the experiment has been almost unfathomably successful for us in terms of it’s role in keeping us sharp in whatever discretionary or quantitative work we happen to be engaged in at the time. Sharing our experiences and interacting with the greater numbers continues to spark new ideas for all of us, making our little experiment a huge win on all fronts in our book. For information about the type of trading that is the foundation for what most members are focused on here, follow this link:

Methodology Framework

 Posted by at 11:24 am

09/13/2019 ES Trade Plan Worksheet

 Pre-market Commentary  Comments Off on 09/13/2019 ES Trade Plan Worksheet
Sep 132019
 

Note: today’s worksheet is based on the ES December 2019 contract.  Volume remains higher on the ES September 2019 contract, but the shift to the December contract should be made sometime this morning.

Trump raised hopes slightly for a partial US/China trade deal in talking with reporters yesterday, “it’s something we would consider, I guess.”  However, Trump qualified that no part of a trade deal is easier than other parts and that he would rather secure a full US/China trade agreement.

The ECB cut rates yesterday an aggressive 0.5% and said they will restart a quantitative easing program.  US stock market index all-time highs are within reach for a test today if the bullish sentiment continues after 7 consecutive bullish days.

Broadcom (AVGO) is down over 1.5% this morning after beating expectations but expressed caution over future earnings.  CEO Hock Tan told investors, “the US/China trade dispute is turning into an extended affair with lots of twists and turns in uncertainty… and we are assuming conditions (are) not going  to change from what we’re seeing now.  And if we make that assumption for next year, you probably see a very uncertain 2020.”

The economic calendar focus is Retail Sales @ 8:30am ET and UoM Consumer Sentiment @ 10:00am ET.  Also, on the calendar are Import Prices @ 8:30am ET and Business Inventories @ 10:00am ET.

Volatility is shrinking as the ES tries to move higher.  The ES 5-day ATR has dropped from the 30s down to 24.5.  Sans a change in trader expectations, expect price movement to the upside to be muted.  Size bias is long into the 8:30am ET Retail Trade numbers.

 

 Posted by at 6:23 am

09/12/2019 ES Trade Plan Worksheet

 Pre-market Commentary  Comments Off on 09/12/2019 ES Trade Plan Worksheet
Sep 122019
 

Today is ES rollover day, the ES December 2019 contract is now the front month.  The ES September 2019 will continue to trade the most volume through sometime tomorrow morning.  A worksheet for each contract is provided today.

After China said they would exempt some US goods from tariffs, Trump tweeted late yesterday that the US would delay tariffs on some China-made goods as a gesture of good will as both sides prepare for the next rounds of trade talks which are pushed to October.

The ECB is expected to announce @ 7:45am ET and explain at a 8:30am ET press conference a major stimulus package with possibly deeper negative interest rates and a restart of quantitative easing.

Privately held Purdue Pharma and maker of OcyContin has reached a tentative settlement with 27 states for $10B to $12B.  The Sackler family will give up control, declare bankruptcy, and turn Purdue Pharma into a for-profit trust.  The proceeds will go to the plaintiffs.  An additional 16 state attorney generals have not agreed to the tentative settlement.

Oracle (ORCL) is up premarket after the database company missed expectations and co-CEO Mark Hurd announced a medical leave of absence.  Executive CEO Larry Ellison will step up to fill the void during Hurd’s absence.  Earnings include AVGO, KR, and DLTH.

The economic calendar focus is the PPI numbers and Unemployment Claims @ 8:30am ET.  Volatility continues to settle in around the 30 point ES 5-day ATR.  The ECB announcement could move the markets this morning.  Size bias is long into the ECB announcement.

 

ES Sep 2019 contract

 

ES Dec 2019 contract

 Posted by at 6:49 am