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 its 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 types of trading which are the foundations for what most members pursue here, follow this link:

Methodology Framework

 Posted by at 11:24 am

06/13/2024 ES Trade Plan Worksheet

 Pre-market Commentary  Comments Off on 06/13/2024 ES Trade Plan Worksheet
Jun 132024
 

The S&P 500 and Nasdaq closed at fresh new record highs after the Consumer Price Index (CPI) numbers came in cooler than expected.  The Fed held rates steady and slashed projected rate cuts to 1 in 2024, down from 3 forecasted in March.

However, the Fed noted modest progress on inflation.  Chair Jerome Powell said the Fed “welcome[d]” Wednesday’s CPI print while noting it would need to see similar future readings to remain confident in inflation’s progress.

Broadcom (AVGO) jumped over 12% after hours after beating earnings expectations and raising their chips used in AI applications by 10% from $10 billion to $11 billion.  The company also announced a 10-for-1 stock split set for July 15.  Broadcom provides lower cost chips than Nvidia and is believed to be making custom chips for Alphabet and Meta.

Tesla (TSLA) shareholder votes will be tallied today over the question of CEO Elon Musk’s $56 billion lucrative compensation.  Many Wall Street analysts expect Musk to secure the compensation package that was awarded in 2018 but was struck down by a Delaware court earlier this year.  Tesla’s board and Musk have submitted a new pay package and have been advocating for shareholders to approve.

Meanwhile this week, Musk is getting hit on multiple fronts.  On Tuesday, the Employees’ Retirement System of Rhode Island (SRSRI) filed a Delaware lawsuit alleging Musk and his brother Kimbal Musk sold $30 billion of TSLA stock using inside information that Elon would use the funds to purchase Twitter (now X).  Additionally, the WSJ published an expose alleging Musk had numerous inappropriate relationships with SpaceX employees.

Corporate earnings include Adobe (ADBE) after the bell.

The economic calendar includes PPI and Unemployment Claims @ 8:30am ET.  Treasury Secretary Janet Yellen and NY Fed President John Williams participate in a moderated discussion at the Economic Club of NY starting @ 12:00pm ET.

Volatility ticked up on Wednesday on reactions to the CPI numbers and afternoon Fed activity.

Whale bias is leaning bullish on light overnight large trader volume.

 

 Posted by at 6:16 am

06/12/2024 ES Trade Plan Worksheet

 Pre-market Commentary  Comments Off on 06/12/2024 ES Trade Plan Worksheet
Jun 122024
 

Market focus is the May Consumer Price Index (CPI) numbers set for release @ 8:30am ET.  The CPI numbers are expected to remain stable and will be used in the Fed’s interest rate decision-making process.

The Fed releases their monetary policy statement and economic projections @ 2:00pm ET, followed by a Fed Chair Jerome Powell press conference.  The dot plots of the economic projections will update Fed member’s current projections on interest rate changes.

The S&P 500 and Nasdaq notched new record highs as Apple (APPL) surged 7% to a new record high as investors digested Apple’s new AI Intelligence.  The move was Apple’s best single day performance since November 2022.

AI intelligence will enable Siri to parse information from messages like phone numbers and addresses.  Siri will also be able to find photos in a phone’s photo library based on voice prompts.  The AI intelligence will be added to most Apple devices will likely drive an upgrade cycle across all their devices.

Corporate earnings after the bell include Broadcom (AVGO).

In addition to the 8:30am ET CPI numbers and 2:00pm ET Fed monetary policy statement and 2:30pm ET Fed Chair Powell press conference, the economic calendar includes Crude Oil Inventories @ 2:30pm ET.

Volatility held steady on Tuesday with potential to pop with a directional move today.

No whale bias as overnight large trader volume was too light to be significant.

 

 

 

 Posted by at 4:07 am