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

07/31/2020 ES Trade Plan Worksheet

 Pre-market Commentary  Comments Off on 07/31/2020 ES Trade Plan Worksheet
Jul 312020

Focus has temporarily shifted from coronavirus and geopolitical issues to corporate earnings where the same four big tech companies that Congress grilled for over 5 hours on Wednesday posted strong earnings.

Apple (APPL) is up over 6% premarket after a record $11.25B quarterly earnings on double-digit product and services growth.  Apple announced a 4 for 1 stock split.

Amazon (AMZN) is up over 5% premarket after blowing away expectations with quarterly sales of $88.9B.  Their ecommerce sales rose 47.8% as more people turn to online shopping because of the coronavirus pandemic.  Amazon cloud services operating income was $3.36B, up 58% over last year.

Facebook (FB) revenue jumped 11% to $18.69B and earnings nearly doubled to $5.18B.  Facebook reported 2.7B monthly active users.

Google (GOOGL) revenue dropped 2% to $38.2B, the first drop since going public in 2004.  Ad revenue fell 8% to $29.87B from $32.49B last year.  Cloud revenue surged 43% to $3B and YouTube revenue is up 6% to $3.8B.

Earnings include XOM, CVX, CAT, MRK, and CL.

The economic calendar includes Core PCE Price Index and Personal Spending/Income @ 8:30am ET, Chicago PMI @ 9:45am ET, and UoM Consumer Sentiment @ 10:00am ET.

Volatility remains steady though should contract if stocks move higher.

Size bias is a divergent short into the US session open.


 Posted by at 6:20 am

07/30/2020 ES Trade Plan Worksheet

 Pre-market Commentary  Comments Off on 07/30/2020 ES Trade Plan Worksheet
Jul 302020

The Fed pledged to keep interest rates low but also warned once again that the coronavirus “poses considerable risks to the economic outlook over the medium term.”

Markets get another glimpse of the coronavirus economic impact in this morning’s 8:30am ET GDP numbers.  It is possible the US in in the greatest economic contraction since the Great Depression.  The GDP forecast is a 34.5% contraction.

The CEOs of Apple, Amazon, Facebook, and Google faced 5 hours of difficult and often specific antitrust questions where many House members were demanding “yes or no” answers to complex technical and business situations.  Bottom line from the hearing, big tech regulations are coming…

Qualcomm (QCOM) is up over 11% premarket after announcing a settlement with China’s Huawei and raising their 4th quarter estimates.

A big day for earnings which includes APPL, FB, AMZN, GOOGL, F, CMCSA, UPS, PG, KHC, DD, GILD, and MGM.

Volatility has ticked up on yesterday’s bullish Fed announcement response and remains moderate.  There is a chance volatility can increase agian if the bears get more traction today.

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


 Posted by at 7:24 am