Welcome to The Discovery Trading Group

 Announcements  Comments Off on Welcome to The Discovery Trading Group
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

01/19/2022 ES Trade Plan Worksheet

 Pre-market Commentary  Comments Off on 01/19/2022 ES Trade Plan Worksheet
Jan 192022

Has inflation and the Fed’s moving towards interest rate hikes finally hit the markets?  The 10-year and 2-year yields spiked to highs not seen for 2 years, sending stocks down.  Bloomberg Intelligence thinks that Fed will be forced to move on tightening faster and forecasts five 25 basis point rate increases in 2002; March, June, July, September, and December.

Markets now have a 50-basis point hike in March fully discounted at about a 1 in 3 chance.  The Fed is now being blamed for too much accommodation and waiting too long to tighten.

Ford (F) will book an $8.2 billion gain in the fourth quarter for investment profits in EV startup Rivian Automotive (RIVN).  Ford had invested $500 million in 2019 and holds about 12% of the company.  Rivian’s IPO sent Rivian’s market cap to over $100 billion but the value has since retreated to around $66 billion.

After an appeal from airline carriers to federal government, AT&T (T) and Verizon (V) have agreed to pause rollout of 5G service near airports.  The 5G frequencies can bleed over to frequencies used by newer aircraft safety systems.  Several international carriers have cancelled flights or substituted aircraft for US destinations.

US chip stocks are up premarket after German chip equipment maker AMSL NV (AMSL) posted strong earnings and said their chip designing machines will help grow chip sales more than 20% in 2022.  NVDA, AMD, INTC, and MU are all up premarket.

Corporate earnings include UNH, BAC, PG, MS, and STT premarket, DFS and UAL post-market.

The economic calendar includes Building Permits and Housing Starts @ 8:30am ET.  Secretary of the Treasury Janel Yellen will speak to the US Conference of Mayors @ 8:00am ET.

Volatility increased again on Tuesday and remains elevated.

Size bias is bullish into the US session open.


 Posted by at 7:22 am

01/18/2022 ES Intraday Swinging Example

 Pre-market Commentary  Comments Off on 01/18/2022 ES Intraday Swinging Example
Jan 182022

Covid-19 protocols have bubbled back to the top of issues after last week’s Supreme Court decision blocking Biden’s corporate vaccine mandates.  Over 34% corporations were waiting on federal guidance and now the courts have forced corporations to grapple with their own rules, balancing outbreaks that lead to labor absences with pushback from employees that have Covid concerns.  About 25% of US corporations are currently requiring vaccinations or regular testing.  Around 40% of corporations are not imposing any mandates.  The Covid safety landscape is pure confusion with constant guideline changes from the CDC, varying mask and vaccine mandates, pushback and misinformation, and political differences.

Oil is in focus as Brent nears $88/barrel, the highest in 7 years.  Houthi rebels from Yemen who are associated with Tehran have attached the United Arab Emirates sparking oil supply disruption concerns.

Airline CEOs wrote an open letter to the FAA warning of “significant operational disruption to air passengers, shippers, supply chain and delivery of needed medical supplies” with AT&T (T) and Verizon (VZ) set to turn rollout their 5G networks this week.  Apparently 5G bleeds into radio frequencies used by many modern aircraft safety systems, rendering them unusable.  UAL, AAL, and DAL are all down premarket.

Earnings include Truist Financial (TFC), Bank of New York Mellon (BK), PNC Bank (PNC) and Goldman Sachs (GS) premarket; JB Hunt Transport (HBHT) and Interactive Brokers (IBKR) post-market.

The economic calendar includes Empire State and NAHB @ 8:30am ET.

After ticking down last Friday, volatility has increased from the Globex selloff.

No Size bias as Globex volume was mixed.


 Posted by at 7:10 am