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

01/26/2022 ES Trade Plan Worksheet

 Pre-market Commentary  Comments Off on 01/26/2022 ES Trade Plan Worksheet
Jan 262022

It’s a Fed-day with the FOMC Monetary Policy Decision @ 2:00pm ET followed by a press conference @ 2:30pm ET.  Clarity on interest rate hike timing is the focus; 3 or 4 for 2022 and when do they start?  Analyst consensus is the first rate hike will be in March.  Inflation is still rising and unemployment is still falling, perhaps enough for the Fed to comfortable telegraph policy a few more months.  Expect this afternoon to be highly volatile.

Oil prices are up as concerns over a possible Russia incursion into Ukraine continues to simmer.  The Ukrainian government has told their citizens that Russia will not invade while NATO and the US are preparing like Russia will.

Microsoft (MSFT) posted mixed earnings which sent their stock into a sharp selloff last night.  However, a better then expected sales outlook for their cloud-based Azure has MSFT stock recovering overnight.

Premarket earnings include SF, ANTM, T, GD, NDAQ, KMB, BA,  ABT, and PGR; post-market earnings include INTL< LVS, WHR, NOW, XM, TSLA, and XLNX.

The economic calendar includes Goods Trade Balance and Wholesale Inventories @ 8:30am, New Home Sales @ 10:00am ET, and Oil @ 10:30am ET.  President Biden will host a group of CEOs including GM CEO Mary Barra and Salesforce co-CEO Marc Benioff to discuss and build momentum for his Build Back Better legislation.

Volatility is near one-year highs and should remain high today.

Size bias is long into the US session open.


 Posted by at 7:18 am

01/25/2022 ES Trade Plan Worksheet

 Pre-market Commentary  Comments Off on 01/25/2022 ES Trade Plan Worksheet
Jan 252022

Volatility is king as the markets remained roiled, inflation is high, and the Fed and other global central banks prepare to tighten, and corporate earnings are less impressive compared with previous quarters.  Tomorrow’s Fed announcement will bring some certainty and likely a reduction in volatility once markets absorb the updated information.  Omicron remains a wild card in the Fed’s timing decision.

Tech giants Tesla (TSLA) and Amazon (AMZN) hit 52-week lows in Monday’s selloff.

Russian tensions remain as NATO declared they are putting troops in the Ukraine region on standby.  Biden put 8,000 US soldiers on high alert.

The economic calendar include HPI and S&P/Case-Shiller 20-city composite index @ 9:00am ET and Consumer Confidence and Richmond Fed @ 10:00am ET.

Earnings include TXN, JNJ, AXP, VZ, IVZ, GE, PII, RTX, MMM, and LMT premarket and MSFT and COF post-market.

Size bias is short into the US session open.


 Posted by at 7:58 am