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

08/16/2018 ES Trade Plan Worksheet

 Pre-market Commentary  Comments Off on 08/16/2018 ES Trade Plan Worksheet
Aug 162018

China has accepted an invitation to continue trade talks with the US and will send a delegation in late August.  Another round of tariffs, $16B for each side is scheduled to take affect next week.  CSCO is up 7% pre-market on a quarterly earnings beat and raise of guidance.  Uber’s revenue jumped 63% to $2.8B and they posted a $891M narrower than expected loss.  Earnings of note today include WMT, NVDA, PCP, and JWN.  The economic calendar focus is Housing Starts, Building Permits, Philly Fed, and Claims @ 8:30am EST.  Volatility picked up significantly yesterday on the bearish move down.  The late afternoon bounce puts the ES right back in its previous 2820/44 range.  It will take clearing the 2844 range top to keep volatility elevated and the US/China trade talk news could provide the fuel.  Otherwise, expect volatility to settle back down as the market wait some actual trade talks progress.  No Size bias overnight volume was mixed but slowly moving towards bullish.


 Posted by at 6:45 am

08/15/2018 ES Trade Plan Worksheet

 Pre-market Commentary  Comments Off on 08/15/2018 ES Trade Plan Worksheet
Aug 152018

China’s stocks are down 2% overnight and the yuan is at 15-month lows against the US dollar.  China has filed a formal complaint to the World Trade Organization against the US over Trump’s tariffs on Chinese made solar panels, a sign the trade relationship between China and the US has not improved over the last few weeks.  Concerns over Turkey’s negotiations with the US over the release of Andrew Brunson and Turkey’s President Erdogan’s announcement that Turkey will double tariffs on US imports will hurt emerging market currencies.  The US dollar at 13-month highs.  The economic calendar is full.  Focus is Retail Sales and Empire State @ 8:30am EST and Oil @ 10:30am EST.  Corporate earnings today include Macy’s (M) and CSCO.  Trade war concerns has volatility up overnight, but will the increased volatility continue into the US session???  If Monday’s ES 2820 low is cleared, we could see a significant increase in volatility to the downside.  Otherwise, the ES is stuck in the 2820/2844 range.  Size bias is short into the 8:30am EST retail numbers.


 Posted by at 7:16 am