Welcome to The Discovery Trading Group

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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

07/19/2019 ES Trade Plan Worksheet

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Jul 192019

Microsoft (MSFT) crushed earnings after the bell yesterday and is poised for new all-time highs and a market cap north of $1T.  Their Azure product has increased MSFT’s cloud revenue 21% as the company becomes more partner friendly in delivering customer solutions.

Comments by the Fed’s Williams and Clarida yesterday have FedWatch pricing a rate reduction at a 50.4% chance at the Fed meeting this month.  Both commented that the Fed doesn’t have to wait for a “disaster to unfold” before changing rates.

Oil prices are up over $1 after the US Navy shot down an Iranian drone that was allegedly threatening a US vessel in the international waters near the Strait of Hormuz.  Trump tweeted “the United States reserves the right to defend our personnel, facilities, and interests.”

The economic calendar focus is UoM Consumer Sentiment @ 10:00am ET.  The Fed’s Bullard speaks @ 11:05am ET.  Volatility has ticked up however expect it to consolidate once again if the ES pushes higher.  No Size bias as Globex Size volume is both relatively light and mixed.


 Posted by at 6:19 am

07/18/2019 ES Trade Plan Worksheet

 Pre-market Commentary  Comments Off on 07/18/2019 ES Trade Plan Worksheet
Jul 182019

Market focus remains on earnings.  Netflix reported their first reduction in subscribers in 8 years putting pressure on NFLX, the first FAANG stock to report 2nd quarter earnings.  DOW component CSX also reported weaker than expected earnings and cited the drawn-out US/China trade war as impacting their business.  Earnings on deck today include UNH, HON, UNP, MS, and MSFT.

Weak manufacturing and business sentiment data from Japan has the Nikkei 225 down 2%.    Oil prices fell more than 1% yesterday after the Crude Inventory Report should a larger than expected build.

The economic calendar focus is the 8:30am ET Philly Fed and Claims.  The Fed’s Williams speaks @ 2:15pm ET.  Volatility increased to the downside yesterday which should remain the easier direction for today if the ES can get into the 60s.  Size bias is bullish into the US session open on higher than recent Globex volume.


 Posted by at 6:02 am