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

09/17/2021 ES Trade Plan Worksheet

 Pre-market Commentary  Comments Off on 09/17/2021 ES Trade Plan Worksheet
Sep 172021
 

The US economy is 2/3s powered by consumer spending and according to August Retail Sales, the spending is strong despite growth potentially stagnating from escalating Covid Delta cases, Fed tapering, and supply chain goods and labor shortages.  Retail sales are on track for double digit growth from 2020 to more than $4.4 trillion.

Despite President Biden’s request for states to extend supplemental unemployment benefits, all 50 state governors opted not to.  A 1% drop in disposable income is expected from the unemployment insurance expirations, however unemployment is also expected to drop to 4.2% by the end of the year.

An FDA advisory panel is debating COVID vaccine shots which Dr. Fauci says the issues is whether the extra shot is a luxury or essential for complete protection.  In other COVID news, the UK is considering changing their travel restrictions, dropping their PCR test and vaccination requirements.  UK air travel is down 40% compared to pre-pandemic levels.

US Steel Corp (X) is up premarket after forecasting record 3rd quarter profits and unveiling plans for a new steel mill that will start producing in 2024.  The company sees profits of about $2 billion with is 50% higher than last year.

No company earnings of note for Friday.

The economic calendar focus is Consumer Sentiment @ 10:00am ET.

Volatility continues to tick higher and remains steady.

No Size bias as Size took little interest in trading overnight.

Today is the quarterly quad witching Friday which since 1992, the S&P 500 has averaged a price drop 0.08%.

 

 Posted by at 6:49 am

09/16/2021 ES Trade Plan Worksheet

 Pre-market Commentary  Comments Off on 09/16/2021 ES Trade Plan Worksheet
Sep 162021
 

Initial market focus is Retail Sales, Philly Fed and Claims @ 8:30am ET.  The economic calendar also includes Business Inventories @ 10:00am ET.

Recent United Nation’s data shows that global food prices have soared 31% from July 2020 to July 2021.  In the US, food prices have risen 8% over the last 2 years with meats, poultry, fish, and eggs leading the way.  Complicating matters, the US imports billions in food a year which is hindered by the current global supply chain issues.

Bucking the inflation trend, Apple’s (AAPL) new iPhone 13s are prices the same as the iPhone 12s.

Markets continue to track the latest developments of the House Democrats’ $3.5 trillion budget and evolving corporate and capital gains tax rate changes.

Pfizer and Moderna are arguing that coronavirus vaccines booster shots should begin.  An FDA panel is considering data submitted by both companies and a decision is expected on Friday.  The World Health Organization wants a moratorium on booster shots until at least the end of the year, using the vaccines for initial shots in poorer countries.

Cisco Systems (CSCO) shares are up about 1.25% premarket after telling investors that they see their markets expanding.  Software and subscriptions is expected to grow from 44% of revenue to over half by 2025.

No corporate earnings of note.

Volatility remains moderate and steady with no reason to expect different today unless Tuesday’s 4425.25 low is cleared.

Size bias is short into the 8:30am ET numbers.

 

 Posted by at 7:23 am