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

09/19/2018 ES Trade Plan Worksheet

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Sep 192018

China’s retaliation of 5% tariff on $60B of US goods after Trump’s 10% tariff on $200B of Chinese goods was less than expectations and thus became bullish for US stocks.   Is this a sign towards resolution?  Not sure, but the markets seem to be taking it as a sign.  Resolution in the short-term (i.e. before the November US mid-term elections) would most likely be very bullish for US stocks.  The economic calendar focus is Housing Starts @ 10:00am EST and Oil @ 10:30am EST.  ECB’s Draghi has a talk starting @ 9:00am EST although it’s been a long while since his comments have affected the US markets.  Only company of note with earnings is RHT.  Volatility increased yesterday and now the ES is once again pinned under its back-adjusted all-time high.  Expect upside volatility to be muted while the market wait on additional US/China or US/Canada trade war information.  No Size bias as overnight volume was too light.


 Posted by at 7:03 am

09/18/2018 ES Trade Plan Worksheet

 Pre-market Commentary  Comments Off on 09/18/2018 ES Trade Plan Worksheet
Sep 182018

The ES is up overnight despite Trump’s new 10% import tariff on $200B of Chinese goods.  The market is finding some solace in Trump saying the move was to bring China to the negotiating table.  He also warned tariffs on $267B which kick in on Sep 24 if China reacts with more tariffs on US imports.  China replied that they have “no choice but to retaliate simultaneously.”  The China Commerce Ministry said they hope the US “would recognize the negative consequences of its actions and take convincing steps to correct its behavior in a timely manner.”  Oracle and Fedex stocks are down overnight after expectation misses.  On deck today are GIS and AZO.  The economic calendar is once again very light: Housing Market Index @ 10:00am EST.  The ES remains consistent with its daily volatility.  Overnight price action has already covered the day’s expected range, so it would be significant if the ES can clear its 2903 OH.  More volume has shifted to the Dec contract.  Size bias is a divergent short into the US session open on increased volume.


 Posted by at 6:45 am