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

09/21/2021 ES Trade Plan Worksheet

 Pre-market Commentary  Comments Off on 09/21/2021 ES Trade Plan Worksheet
Sep 212021

Stock futures made a strong rebound from Monday’s largest selloff since May.

The China property management company Evergrande potential bond default this week could be the event that triggers the stock market correction the bears have been loudly calling for.  Evergrande has $300 billion in liabilities and only $15 billion in cash with $84 billion in interest due next week.  Analysts expect the company to default.

The company has hundreds, maybe thousands of unfinished projects.  Evergrande chairman Hui Ka Yuan defiantly told his employees that the company would “walk out of its darkest moment.”

Lennar Corp (LEN) joins DR Horton (DHI) and PulteGroup (PHM) in issuing warnings that homebuilders face unprecedented supply chain challenges which will continue to slow new construction.

Earnings include AutoZone (AZO), FedEx (FDX), StitchFix (SFIX) and Adobe (ADBE).

The economic calendar includes Building Permits, Housing Starts, and Current Account @ 8:30am ET.

Volatility increased significantly from Monday’s selloff.  The ES 5-day average daily range is now 68.75 points.

Size bias is long into the US session open.


 Posted by at 6:19 am

09/20/2021 ES Trade Plan Worksheet

 Pre-market Commentary  Comments Off on 09/20/2021 ES Trade Plan Worksheet
Sep 202021

According to SundDial Capital Research, on Friday, over 25% of the S&P 500 stocks closed below their 200-day moving average, ending the fourth largest bullish streak since 1928.

The Fed meets this week could start tapering their pandemic bond purchases.  Meanwhile the US government is quickly running out of money and Treasury Secretary Janet Yellen is warning of a borderline government catastrophe if the debt ceiling is not increased soon.  Congress returns to Washington this week to deal with the debt ceiling and vote on Biden’s infrastructure deal.

China’s crackdown on corporate profits and accelerating Covid delta variant infections has global stocks tumbling.  Chinese property development company Evergrande faces $150 million in bond payments this week on their $310 billion in debts after Beijing had warned the company to reduce their risk and refused to give the company rescue cash.  Evergrande was forced to sell hundreds of commercial properties and their stock tumbled another 5% in Hong Kong, at 11-year lows, pulling many Asian stocks to August lows.

The FDA is still evaluating data from J&J and Moderna over the suitability of coronavirus booster shots.  Recommendations could be made within weeks.  On Friday, the FDA said Americans over 65 could receive a Pfizer booster shot.

The economic calendar is light with NAHB @ 10:00am ET.

Volatility remains moderate but could increase substantially if the S&P keeps falling in the US session.

Size bias is short into the US session open.


 Posted by at 7:18 am