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

01/24/2020 ES Trade Plan Worksheet

 Pre-market Commentary  Comments Off on 01/24/2020 ES Trade Plan Worksheet
Jan 242020

Concerns over the deadly coronavirus continues to grow as now 26 people have died and at least 830 people are infected centered around the industrial city of Wuhan.  As the Chinese Lunar New Year celebrations begin, to contain the virus, China has restricted travel of about 35 million.  The WTO says the virus has not yet risen to the level of a global health emergency.

Intel (INTL) is up sharply after crushing earnings forecasts and providing strong guidance.  Revenue rose 8% for the quarter and EPS came in at $1.52, well above the forecasted $1.25 per share.  Intel for the first time ever topped $20B for a quarter.

After settling a patent dispute with Apple (AAPL) last year, Broadcom (AVGO) shares are rising this morning after they announced two deals with Apple to supply RF chips.  The deals are multi-year and could be worth as much as $15B.

Earnings include AXP, SYF, and APD.

The economic calendar focus is the Flash PMI numbers @ 9:45am ET.

After yesterday afternoon’s bullish ES run-up and with the ES perched once again under its all-time highs, expect upside volatility to be muted.  The Trump impeachment trial remains a wildcard, although it has had little effect on markets thus far.

No Size bias as Globex volume was both lighter than recent and mixed.


 Posted by at 6:59 am

01/23/2020 ES Trade Plan Worksheet

 Pre-market Commentary  Comments Off on 01/23/2020 ES Trade Plan Worksheet
Jan 232020

Asian stock markets are down sharply as concerns over the deadly coronavirus could grow into a worldwide pandemic.  China shut down travel outside of Wuhan, a city of about 11 million where the virus has claimed at least 17 lives and over 500 are known to be infected.

In the US, stronger than expected earning from Texas Instruments is buoying US technology and semi-conductor stocks and offsetting Asia’s coronavirus bearish pull.

Amazon (AMZN) filed a court motion against Microsoft (MSFT) to block Microsoft from starting work on the Department of Defense JEDI $10B cloud project.  Amazon claims the contentious between their CEO Jeff Bezos and President Trump played a role in Microsoft winning the project.  Amazon claims Trump used “improper pressure” on the Department of Defense to choose Microsoft over Amazon.

Ford (F) made a regulatory that says they plan to take a $2.2B special charge related to pension costs which will reduce net income by $1.7B for the fourth quarter.

Earnings include PG, ABBV, AAL, LUV, TRV, INTC, CMCSA, CL, UNP, KMB, SWKS, and FCX.

The economic calendar focus is Claims @ 8:30am ET and Oil @ 11:00am ET.  The ECB has a policy announcement @ 8:30am ET followed by a press conference @ 8:30am ET.

Day 3 of the Trump impeachment Senate Trial, the House Managers began their 24 hours of laying out their case to remove President Trump from office.  Trump didn’t help his obstruction of Congress charge by telling reporters in Davos “I thought our team did a very good job.  But honestly, we have all the material.  They don’t have the material.”  House Manager Val Demings jumped all over the statement tweeting “This morning the President not only confessed to it [the obstruction charge], he bragged about it.”

Volatility should be similar to yesterday unless the ES takes out 3310, then downside volatility should increase.

Size bias is bearish into the US session open.


 Posted by at 6:38 am