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

01/16/2020 ES Trade Plan Worksheet

 Pre-market Commentary  Comments Off on 01/16/2020 ES Trade Plan Worksheet
Jan 162020

The phase one US/China trade agreement was signed yesterday committing China to purchase $200B of US goods over 2 years including agriculture and energy in exchange for the US to rollback some tariffs on goods from China.  The trade agreement also stipulates that China “enhance” protections for US intellectual property.

As a point of reference, Apple’s (AAPL) annual sales was $265B in 2018 and $260B in 2019.  So, while the phase one trade agreement is a win for balancing trade between the US and China, it’s not an economic altering “huge” deal.

Apple purchased a Seattle startup Xnor.ai who develops artificial intelligence tools for image recognition.  Look for Apple to be increasing their functionality on their iPhones and Webcams using AI in the future.

A major supplier to Apple, Taiwan Semiconductor Manufacturing (TSM) beat expectations, a healthy sign for smartphone demand.

XPO Logistics (XPO) is up over 17% premarket after announcing they would spin off their North American less-than-truckload business unit.

Earnings include MS, SCHW, BK, CSX, PRGS, and PPG.

The economic calendar includes Retail Sales and Philly Fed, Import Prices and Claims @ 8:30am ET, Business Inventories and NAHB @ 10:00am ET.  Central Bank speakers include the Fed’s Bowman @ 10:00am ET and the ECB’s new president Lagarde @ 1:00pm ET.

Volatility is slowing as the ES continues to grind higher.

Size bias is long into the 8:30am numbers on relatively light Globex volume.


 Posted by at 7:16 am

01/15/2020 ES Trade Plan Worksheet

 Pre-market Commentary  Comments Off on 01/15/2020 ES Trade Plan Worksheet
Jan 152020

The phase one US/China trade agreement is scheduled for a White House signature @ 11:30am ET.  Trump called it a “beautiful monster” of a deal.  In a joint statement yesterday, Mnuchin and Lightizer warned that many current tariffs on Chinese goods would not rollback.  Given China’s slowing economy, there is growing concern that China may not be able to uphold an anticipated $200B of US goods purchases the trade agreement is supposed to entail.

Apple’s (APPL) iPhone security is in the spotlight as Attorney General William Barr once again publicly is pressuring Apple to unlock cell phones for criminal investigations.  Trump chimed in with a tweet “We are helping Apple all of the time on TRADE and so many other issues, and yet they refuse to unlock phones used by killers, drug dealers and other violent criminal elements.  They will have to stop up to the plate and help our great Country, NOW!”.  Apple responded, not true, they have provided substantial assistance to investigating the Pensacola Naval Base shooting.

Earnings include GS, BAC, BLK, PNC, USB, BBT, and AA.

The economic calendar includes PPI and Empire State @ 8:30am ET, Oil @ 10:30am ET and Fed Beige Book @ 2:00pm ET.  Fed speakers include Harker @ 11:00am ET and Kaplan @ 12:00pm ET.

Volatility could pick up later today as analysts finally get to evaluate the phase one US/China trade deal to determine if it meets the expectations anticipated by the stock market bulls over the last 2 years.

No Size bias as they showed little interest during Globex.


 Posted by at 7:10 am