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

01/17/2019 ES Trade Plan Worksheet

 Pre-market Commentary  Comments Off on 01/17/2019 ES Trade Plan Worksheet
Jan 172019

US/China trade war concerns continue to cast a shadow over the markets.  Another 2-day meeting that includes China’s vice premier Lieu He is confirmed to start Jan 30 in the US.  The US government shutdown is now in day 27 and there was concern the next US/China meeting would be delayed as the self-imposed March 1 deadline is quickly approaching.  Further concerns were cast by US actions that US federal prosecutors are investigating allegations that Huawei Technologies stole trade secrets from US companies.  Additionally, a bi-partisan bill was launched in Congress seeking to ban US companies from exporting goods that violated State Department sanctions; specifically, Chinese company Huawei and ZTE Corp.  The economic calendar is light with Philly Fed and Claims @ 8:30am EST.  Housing Starts will not be released due to the government shutdown.  The Fed’s Quarles speaks @ 10:45am EST.  JPM and GS both beat expectations yesterday.  CSX also beat but warned of slowing growth which sent the stock down over 4% this morning.  On deck today are NFLX, MS, AXP, BBT, JBHT, and KEY.  Volatility is remaining steady with price moving easier to the downside than the upside.  Size bias is short into the US session open.


 Posted by at 7:08 am

01/16/2019 ES Trade Plan Worksheet

 Pre-market Commentary  Comments Off on 01/16/2019 ES Trade Plan Worksheet
Jan 162019

UK Prime Minister Theresa May suffered the worst parliamentary defeat in history when her Brexit agreement lost by 230 votes which included 100 votes from members of her own party.  A vote of no confidence was triggered which will be debated today.  It’s not looking good for May who may need to step down as UK’s PM soon.  Meanwhile US/China trade war jitters continue.  Rep. Sen Chuck Grassley said there has been little progress in structural changes that include “intellectual property, stealing trade secrets, putting pressure on corporations to share information with the Chinese government and industries.”  However Chinese trade negotiators will be coming to the US in a couple of weeks to continue discussions.

The economic calendar is light with Import and Export Prices @ 8:30am EST, NAHB Housing Market Index @ 10:00am EST, and Oil @ 10:30am EST.  Retail Sales will not be released due to the 26th day of the government shutdown.  In corporate news, SNAP is down over 10% after the sudden resignation of their CFO, the 3rd executive to leave in 4 months.  JP missed expectations and BAC, UAL, and DAL topped.  Earnings today include GS, USB, CSX, SCHW, and the traditional start of the earnings season AA.

Volatility seems to be leveling out with the 5-day ES ATR hanging out around 30 points per day.  If volatility is to increase, it most likely will be to the downside.  Size bias long into the US session open.


 Posted by at 7:33 am