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

06/23/2021 ES Trade Plan Worksheet

 Pre-market Commentary  Comments Off on 06/23/2021 ES Trade Plan Worksheet
Jun 232021
 

In Fed Chair Jerome Powell’s testimony to the House subcommittee on the coronavirus, he reiterated that the current inflation spike was temporary, caused by the reopening of the economy and should resolve as supply chain issues caused by the pandemic are worked out.  Powell’s testimony calmed market fears.

Morgan Stanley is to require vaccinations for all employees, clients, and visitors to their New York City and Westchester offices starting July 12.  The restrictions are one of the most restrictive and Morgan Stanley hopes it will get employees back into their offices and back to normal.

New York City is using ranked choice voting for the Democratic mayoral primary which speeds the voting process by reducing runoff races.  In ranked choice voting, voters can use multiple candidates in a ranked order and computers weight the rankings to determine a winner.  Currently Brooklyn Borough President and former New York police captain, Eric Adams is leading with 31% of the vote with almost all precincts reporting.  The winner may not be known for weeks at it takes much more time to tabulate the ranking information.

Earnings include INFO, KBH, and WGO.  The economic calendar includes Flash PMIs @ 9:45am ET, New Home Sales @ 10:00 am ET, and Oil @ 10:30am ET.  The Fed’s Bowman speaks @ 9:00am ET.

Volatility continues to tick up but should start subsiding if the S&P 500 starts pressing into new all-time highs.

Size bias is bearish into the US session open but once again on light Globex volume so the bias is not significant.

 

 Posted by at 6:48 am

06/22/2021 ES Trade Plan Worksheet

 Pre-market Commentary  Comments Off on 06/22/2021 ES Trade Plan Worksheet
Jun 222021
 

After a strong up day that erased Friday’s big selloff, stock futures are down modestly ahead of Fed Chair Jerome Powell’s testimony to the US House Coronavirus Crisis Subcommittee starting @ 2:00pm ET.

In a pre-released written statement, Powell said, “widespread vaccinations have joined unprecedented monetary and fiscal policy actions in providing strong support to the recovery. Indicators of economic activity and employment have continued to strengthen, and real GDP this year appears to be on track to post its fastest rate of increase in decades.”

Powell also says inflation has increased significantly in recent months.  Recent Fed comments and Powell’s testimony today has the markets spooked that the Fed will start tightening their monetary policies sooner rather than later.

In another sign of economic recovery, Delta Airlines (DAL) said they expect to report a profit in June.  Delta also said they plan to hire 1,000 pilots over the next year, an increase of about 8% to 12,940 pilots.

The economic calendar includes Existing Home Sales and Richmond Fed @ 10:00 am ET.  In addition to Powell @ 2:00pm ET, the Fed’s Daly speaks @ 11:00am ET.

Volatility continues to increase and reactions to Powell’s testimony should keep volatility elevated this afternoon.

Size bias is a divergent bullish into the US session open but on light Globex volume so the bias is not strong.

 

 Posted by at 6:29 am