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

10/10/2019 ES Trade Plan Worksheet

 Pre-market Commentary  Comments Off on 10/10/2019 ES Trade Plan Worksheet
Oct 102019
 

The first high level trade talks between the US and China since the G-20 meeting in June begin today.  Much has changed in President Trump’s political world since then with the growing momentum to impeach.  Also this may be the last opportunity to make progress before the 2020 presidential elections which gives the US some incentive and the Chinese some leverage.  Additional 15% tariffs are scheduled to kick in mid-December which effectively puts tariffs on all Chinese imports.

Bed Bath & Beyond (BBY) is up over 20% premarket after announcing Mark Tritton from Target will be CEO.  Tritton launched Target’s private brand development which is now more than 30 and is credited for Target’s growth.

Under pressure from China, Apple (AAPL) has removed a police tracking app called HKmap.live which was being used by protestors to track and ambush Hong Kong police.

The world of stock trading commissions is changing quickly, Fidelity follows Schwab and TDAmeritrade to announce free online trading of stocks, ETFs, and options.

Delta Air Lines (DAL) is the only earnings of focus today.

The economic calendar includes CPI numbers and Claims @ 8:30am ET.

Volatility remains elevated and any new US/China trade war info should keep price action lively.  Size bias is short into the 8:30am ET numbers.

 

 Posted by at 7:14 am

10/09/2019 ES Trade Plan Worksheet

 Pre-market Commentary  Comments Off on 10/09/2019 ES Trade Plan Worksheet
Oct 092019
 

The ES is up overnight after a Bloomberg report that said China was open to a partial US trade agreement if Trump does not impose more tariffs.  Two new rounds of tariffs are currently scheduled for October and December.

However, traders are cautious as China issued a warning to stay tuned for reprisals to the US Commerce Departments blacklist of 8 Chinese technology companies and 20 other entities.  The US State Department announced visa restrictions to Chinese officials tied to the companies and human rights violations to Muslim groups.  Adding to the US/China trade talk uncertainty, White House officials are looking for ways to limit government pension fund investments in China companies.  The high-level talks begin tomorrow.

Johnson & Johnson (JNJ) is down premarket after a Philadelphia jury ordered J&J to pay $8B in damages for failing to warn a customer of their antipsychotic drug Risperdal of the potential side affect risks of gynecomastia that causes men to grow breasts.  In a J&J statement, they said “This reward is grossly disproportionate with the initial compensatory award ($680K), and the company is confident it will be overturned.”  J&J faces more than 13,000 legal cases over Risperdal.

Levi Strauss (LEVI) is up over 1% premarket after beating expectations on strong growth in Europe and Asia.

California power company PG&E (PCG) announced they will begin turning off power to 800,000 customers as a preventive move to reduced wildfires caused by faulty lines.  Customers in 34 counties were without power this morning in areas of windy forecasts.

It’s a Fed day with minutes released at 2:00pm ET.  Fed Chair Powell also speaks @ 11:00am ET.

The economic calendar includes JOLTS and Final Wholesale Inventories @ 10:00am ET, and Oil @ 10:30am ET.

Volatility remains elevated and with evolving US/China trade war tit-for-tat and the Fed, no reason not to expect some price movement today.  Size bias is long into the US session open.

 

 Posted by at 7:31 am