Welcome to The Discovery Trading Group

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Nov 292011

We are a group of professional 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

04/19/2018 ES Trade Plan Worksheet

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Apr 192018

The 2-day summit between Trump and Japan PM Shinzo Abe ended with no announced changes in trade between the two countries.  Commodity prices are surging with oil hitting 2-year highs and aluminum hitting 7-year highs.  Focus remains on corporate earnings.  MS has strong earnings and NFLX hit all-time highs.  AMZN is up about 2% premarket after CEO Bezos announced their Prime Membership topped 100 million subscribers, they’ve shipped over 5 billion prime packages in 2017, and the 2017 Amazon Prime Day had 60% growth with over 40 million items sold.  Earnings today include BK, BX, DHR, ETFC, KEY, and NUE.  The economic calendar is light with focus on Claims and Philly Fed @ 8:30am EST.  The Fed’s Governor Quarles continues his Congressional testimony to the Senate Banking Committee starting @ 10:00am EST.  Volatility continues to contract as the bulls slowly push higher.  Same as yesterday, the probability for an increase in volatility is higher to the downside than the upside.  Size bias is short into the 8:30am EST numbers.


 Posted by at 6:49 am

04/18/2018 ES Trade Plan Worksheet

 Pre-market Commentary  Comments Off on 04/18/2018 ES Trade Plan Worksheet
Apr 182018

Hopes of the US rejoining the Trans-Pacific Partnership free-trade deal were dashed yesterday by a Trump tweet after Trump met with Japan’s PM Shinzo Abe.  Market focus is corporate earnings.  GS, UAL, and CSX all had solid earnings, beating estimates for most numbers.  IBM also had solid earnings, but weaker than expected profit margin sending its stock down about 5% in premarket.  On deck today are MS, ABT, and AXP.  The economic calendar is light with only the weekly Oil @ 10:30am EST and the Fed’s Beige Book @ 2:00pm EST.  The Fed’s Dudley speaks @ 3:15pm to a collegiate audience.  Volatility is slowing as the bulls push higher; an increase in volatility will most likely come from the downside.  The ES climbed back above its 50-day MA yesterday, however the bulls need to clear the 2750s to break the longer-term downtrend.  Size bias is leaning short into the US session open.


 Posted by at 6:59 am