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

03/21/2019 ES Trade Plan Worksheet

 Pre-market Commentary  Comments Off on 03/21/2019 ES Trade Plan Worksheet
Mar 212019
 

As expected, the Fed left interest rates unchanged and maintained their wait-and-see what the economy does strategy as Trump’s tax cut stimulus fades.  The Fed now sees zero 2019 interest rate increases, a big change from the consensus of 2 rate increases forecasted back in January.  Powell said the labor market still looks strong, but there’s been a slow down in economic activity.  Powell said the Fed will remain patient with no rush to change policies.

The Brexit drama and US/China trade war continue to provide a backdrop. Trump said tariffs on Chinese goods would remain “for a substantial period of time” to ensure China keeps their end of a trade deal.

The DOW component Boeing (BA) remains in the spotlight as the FBI joined a criminal investigation into the certification of Boeing’s 737 MAX.  The iconic brand Levi Strauss (LEVI) goes public today at an estimated $6.6B.  Micron (MU) is up nearly 3% premarket after beating estimates and raising forecasts.  Earnings today include NKE, SUO, LE, DRI, and CAG.

The economic calendar focus is Philly Fed @ 8:30am EST.  Other data includes Claims @ 8:30am EST and CB Leading Index @ 10:00am EST.  Volatility is shrinking.  Expect price action to be limited unless the ES can take out YH=2849.25 or YL=2817.25.  Size bias is short into the US session open.

 

 Posted by at 6:06 am

03/20/2019 ES Trade Plan Worksheet

 Pre-market Commentary  Comments Off on 03/20/2019 ES Trade Plan Worksheet
Mar 202019
 

It’s a Fed day with the policy announcement @ 2:00pm EST followed by a chair Jerome Powell press conference @ 2:30pm EST.  It’s expected the Fed will not raise interest rates so focus will be on whether or not they ease their bond sales pace.  The next round of US/China trade talks is expected for next week.  Reports that China is resisting some of US trade demands brought out the bears yesterday.

FedEx (FDX) is down over 6% this morning after issuing a profit warning for next quarter due to their purchase of TNT Express, the US government shutdown and the US/China trade negotiations.  Chipmaker AMD shares are up premarket after Google announced they would use their Radeon chips to power their online gaming platform called Google Stadia which will enable online video game playing without a gaming console.  Earnings include MU, GIS, GES, and WSM.

The economic calendar is very light with Oil @ 10:30am EST.  Volatility should be tame into the 2:00pm Fed announcement.  Then we may see a volatility uptick through the Fed press conference which generally ends around 3:30pm EST.  No Size bias again this morning as Globex volume was both light and mixed.

 

 Posted by at 6:39 am