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

09/16/2021 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

09/15/2021 ES Trade Plan Worksheet

 Pre-market Commentary  Comments Off on 09/15/2021 ES Trade Plan Worksheet
Sep 152021
 

August CPI numbers mostly met expectations which should delay a Fed tapering decision, however it is becoming increasingly obvious that the transitionary price increases the Fed would speak about earlier this year will become permanent as business have are becoming more and more comfortable charging their customers higher prices.  The NY Fed now expects inflation to be elevated the next 1 to 3 years.

The housing market is becoming frothy, and rents are at all-time highs.  When the Federal eviction moratorium ends, millions of poor renters will be displaced as many cash-strapped landlords have gone over a year without getting paid.

China economic activity is slowing as new data shows a slump in retail sales and factory activity.

In the US, concerns over higher corporate taxes in the $3.5B bill proposed by House Democrats has investors concerned about future growth and inflation.

Apple (APPL) is up about 0.3% after a lukewarm reception to the unveiling of iPhone 13s.  The new phones are underwhelming upgrades of speed, camera accessories and screen sizes but enough to entice many current users to upgrade.

Microsoft (MSFT) is up over 1.3% premarket after announcing a 62 cent per share dividend and a $60B stock buyback program.

California Governor Gavin Newson will make a decisive win with about 2/3s of the votes in special recall election.  The election was called after 1.7 million people signed a petition to remove Newson over his handling of the Covid crisis.  Newson will hold office until 2023.

The economic calendar includes Empire State and Import Prices @ 8:30am ET, Industrial Production and Capacity Utilization @ 9:15am ET and Oil @ 10:30am ET.

Earnings include Weber (WEBR).

Tuesday’s ES low was 11 points from the daily 50-day moving average (4414.25) making this the ninth time in 2021 the 50-day moving average has held as support in 2021’s uptrend.

Volatility continues to tick up but remains steady with the ES 5-day average daily range now at 48.25 points.

No Size bias as Globex volume was mixed.

 

 Posted by at 7:18 am