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

01/19/2021 ES Trade Plan Worksheet

 Pre-market Commentary  Comments Off on 01/19/2021 ES Trade Plan Worksheet
Jan 192021

President-elect Biden’s Treasury Secretary candidate and former Fed Chair Janet Yellen begins her Senate confirmation hearings @ 10:00am.  In pre-released text, Yellen will tell the Senate Finance Committee that the federal government needs to take more action or risk a “longer, more painful recession.”

US coronavirus cases passed 24 million and deaths hit 399K.  January is on pace to become the deadliest month of the pandemic for the US.  Globally, cases have reached 95.6 million and 2.04 million deaths.

Biden’s press secretary Jen Psaki said the Biden administration will reject Trump’s move to rescind travel bans starting Jan 26.  The CDC last week issued an order requiring all air travelers to have negative coronavirus test results before traveling.  Psaki said the new president plans to strengthen public health measures for international travel.

Earnings on Tuesday include GS, NFLX, BAC, JBHT, HAL, SCHW, IBKR, STT, and CMA.

The economic calendar is bare.

Volatility remains steady but the long holiday weekend has already expanded daily range premarket.

Size bias is a divergent short into the US session open.


 Posted by at 6:14 am

01/18/2021 Martin Luther King Holiday

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Jan 182021

US stock markets are closed Monday in observance of Martin Luther King Holiday.  DTG will resume posting tomorrow, Tuesday, Jan 19, 2021.  Enjoy the long weekend!

 Posted by at 5:35 am

01/15/2021 ES Trade Plan Worksheet

 Pre-market Commentary  Comments Off on 01/15/2021 ES Trade Plan Worksheet
Jan 152021

President-elect Joe Biden detailed his $1.9 trillion “America Rescue Plan” Thursday evening.  The plan includes $1400 checks for individuals, extending supplemental unemployment insurance, a moratorium on evictions and foreclosures through September, and funds to bolster vaccine deployment.

Apparently, optimism for the stimulus has already been priced into the US markets and stock futures sold off after Biden released his plan’s details.  There is questions about whether the plan’s price tag will get bipartisan support.

The Trump administration has added China smartphone manufacturer Xiaomi, oil giant Cnooc, and China’s largest chip maker SMIC to the US blacklist for supporting China’s military, intelligence, and security services.  Investors have until November to divest holdings in the Chinese companies.

Big Banks start reporting quarterly earnings today with JPM, C, WFC, and PNC on deck.

The economic calendar is full with focus on Retail Sales @ 8:30am ET.  Other data include PPI and Empire State @ 8:30am ET, Capacity Utilization and Industrial Production @ 9:15am ET, and Business Inventories and UoM Consumer Sentiment @ 10:00am ET.

Volatility continues to consolidate but could pick up if the bears gain more traction today.  US markets are headed into a 3-day weekend so volume may tail off as the day wears on.  However Friday is a triple witching day so volatility could pick up into the close as options expire and positions are adjusted

Size bias is a divergent bullish on light Globex volume.


 Posted by at 6:55 am