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

02/20/2020 ES Trade Plan Worksheet

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Feb 202020

Goldman Sachs strategist Peter Oppenheimer weighed in on the coronavirus, “We believe the greater risk is that the impact on earnings may well be underestimated in current stock prices, suggesting that the risks of a correction are high.”  The Danish shipping company A.P. Moeller-Maersk issued a warning saying the coronavirus outbreak gives them limited visibility into 2020.

L Brands (LB) is selling Victoria’s Secret to a private-equity firm.  The deal values the brand at $1.1B.  L Brand will be left with their more profitable Bath & Body Works brand.

Zillow (Z) is up over 16% after doubling sales and easily beating estimates on a fourth quarter loss of 49 cents a share.

Earnings include VIACA, FIT, FSLR, NCLH, TXRH, DPZ, ZS, DBX, SIX, and HRL.

The economic calendar focus is Philly Fed @ 8:30am ET.  Also on the calendar are Claims @ 8:30am ET, CB Leading Index @ 10:00am ET, and Oil @ 11:00am ET.

Volatility continues to contract to the upside with greater potential for expansion to the downside.

No Size bias this morning on mixed but substantially higher GLOBEX volume.


 Posted by at 6:44 am

02/19/2020 ES Trade Plan Worksheet

 Pre-market Commentary  Comments Off on 02/19/2020 ES Trade Plan Worksheet
Feb 192020

Covid-19 has now claimed more than 2000 lives with the number of cases beyond 74K.

Despite Apple (APPL) coronavirus related revenue warning, the NASDAQ closed at a record high on Tuesday.

Boeing (BA) found debris in undelivered 737 MAX fuel tanks, an obvious quality control issue.  Boeing has ordered inspections of all MAX planes in storage, around 400.  There are an additional 385 MAX planes that have been delivered and grounded that Boeing recommends be inspected but it’s not clear if Boeing personnel will be involved.

Groupon (GRPN) is down over 20% overnight after disappointing earnings.  They have decided to stop selling merchandise which CEO Rich Williams says has “become a significant drag on our business.”

Earnings include ZG, ADI, BHC, DISH, IMAX, CAR, SAM, and WING.

It’s a Fed day with minutes released @ 2:00pm ET.  Fed speakers include Mester @ 8:30am ET, Kashkari @ 11:45am ET, and Kaplan @ 1:30pm ET.

The economic calendar focus is PPI and Housing numbers @ 8:30am ET.

Volatility continues to contract as the ESH20 climbs higher; expect that trend to continue.

Size bias is a divergent short into the 8:30am ET numbers, but on significantly lighter GLOBEX volume than recent.


 Posted by at 6:41 am

02/17/2020 Presidents Day

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Feb 172020

US stock markets are closed in observance of Presidents Day.  DTG will resume posting tomorrow, Tuesday, Feb 18.  Enjoy the 3-day weekend!



 Posted by at 5:08 am