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

06/14/2019 ES Trade Plan Worksheet

 Pre-market Commentary  Comments Off on 06/14/2019 ES Trade Plan Worksheet
Jun 142019

The US is blaming Iran for attacks on two oil tankers in the Strait of Hormuz.  US Secretary of State Mike Pompeo said, “these unprovoked attacks present a clear threat to international peace and security, a blatant assault on the freedom of navigation and an unacceptable campaign of escalating tension by Iran.”  Oil prices however are down this morning after the International Energy Agency report said oil demand is down for the second month in a row.

New industrial output numbers show China slowed to 5% in May, well below expectations of 5.5%.  The US/China trade war is blamed.  Public hearings will be held today to consider extending 25% tariffs on all Chinese imports that do not currently have tariffs.

Trump received a letter yesterday from a business coalition called “Tariffs Hurt the Heartland.”  The coalition has more than 600 member companies including WalMart and Target.  The letter asks Trump to remove the Chinese tariffs, that they will have “a significant negative long-term impact on American businesses, farmers, families, and the US economy…  tariffs are taxes paid directly by US companies… not China.”

Semi-conductors are down this morning after Broadcom (AVGO) earnings missed expectations and they warned they may be cut off from their largest customer (Huawei).  Uncertainty over the US/China trade war has them lowering future expectations.

The economic calendar focus is Retail Sales @ 8:30am EST and Consumer Sentiment @ 10:00am EST.  Also on the calendar are Industrial Production @ 9:15am EST and Business Inventories @ 10:00am EST.

Volatility is starting to contract as the ES tries to push higher.  Best chance of volatility increase is to the downside.  No Size bias as Globex volume was both mixed, light, and split between the ES June and September contracts.


 Posted by at 6:09 am

06/13/2019 ES Trade Plan Worksheet

 Pre-market Commentary  Comments Off on 06/13/2019 ES Trade Plan Worksheet
Jun 132019

It’s ES rollover day, volume should shift to the September contract by mid-morning tomorrow.

Trade war tensions remain between the US and China as doubts grow as to whether Trump can close a deal with Xi Jinping at the June 28-29 G-20 summit.  Trump has threatened additional tariffs on Chinese imports if a deal is not struck this month, a task 11 previous US meetings with the Chinese has not been able to produce.

Oil prices are up after the US Navy has responded to two separate oil tanker distress signals in the Gulf of Oman.  It’s unclear what happened or who is responsible.

Retailers Luluemon (LULU) and Restoration Hardware (RH) are both up strong pre-market on beating estimates and raising forecasts.  Broadcom (AVGO) and Duluth Holdings (DLTH) are on deck for earnings.

The economic calendar is light with Import Prices and Claims @ 8:30am EST.  Volatility ticked down yesterday and Globex has already covered most of the projected daily range, this volatility to the upside will most likely be constrained.  No Size bias this morning as Size volume overnight was mixed.


ES June 2019 Contract ES Worksheet



ES September 2019 Contract ES Worksheet


 Posted by at 6:36 am