Welcome to The Discovery Trading Group

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Nov 292011
 

We are a group of professional 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

10/19/2018 ES Trade Plan Worksheet

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Oct 192018
 

China’s Shanghai is up over 2.5% after the central bank governor Yi Gang said the bank would support the country’s monetary system.  The Chinese central banking pledge gave the ES some buoyancy after yesterday’s significant selloff fueled by concern over the Fed Reserve’s pace of interest rate increases.  PayPal is up nearly 8% and American Express over 1% after both beat earnings expectations.  It’s been a strong earnings quarter so far with 69 of the S&P 500 reporting; 88% beat earnings estimates and 64% have beat revenue growth.  On Deck today are HON, PG, SLB, and VFC.  The economic calendar is very light with Existing Home Sales @ 10:00am EST.  The Fed’s Bostic speaks @ 12:00pm EST.  Despite yesterday’s sharp selloff, volatility did not increase.  It remains high and may calm down a bit today if the ES moves up.  If the bears take out yesterday’s 2756.50 ES low, then we may see an increase in volatility to the downside.  No Size bias as overnight volume picked up over yesterday but is mixed.

 

 Posted by at 6:48 am

10/18/2018 ES Trade Plan Worksheet

 Pre-market Commentary  Comments Off on 10/18/2018 ES Trade Plan Worksheet
Oct 182018
 

Yesterday’s Fed Minutes showed what many bulls feared, hawkish minutes which firmly sets expectations for additional, gradual rate hikes soon.  The news sent US Treasury yields and dollar up and added a bearish shadow to US stocks.  Facebook’s investigation into their huge breach of private information of 50 million users was not the work of hackers from a nation state, but rather digital marketing spammers trying to make money through deceptive advertising.  Facebook thinks 30 million users had their account keys (or user tokens) stolen.  All is quiet in the US/China trade war (which remains as a major market mover) as market focus shifts to third quarter earnings.  On deck today are AXP, BK, TRV, NUE, DHR, PYPL, and PPG.  The economic calendar includes Philly Fed and Claims @ 8:30am EST and Leading Indicators @ 10:00am EST.  The Fed’s Quarles speaks @ 12:15pm EST.  Volatility to the upside is slowing.  If the bears take over again, volatility can pick back up to the downside.  Size bias is short into the US session open, but Size volume overnight was light so the bias shouldn’t be given much weight.

 

 Posted by at 6:42 am