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

09/17/2020 ES Trade Plan Worksheet

 Pre-market Commentary  Comments Off on 09/17/2020 ES Trade Plan Worksheet
Sep 172020

The Fed said they would keep interest rates low beyond 2023 but the economy also needs fiscal help from Congress shifting focus back to stimulus talks where Democrats and Republicans are at an impasse.

Mitch McConnell’s Republican controlled Senate of the 116th Congress is on track to be the least productive Congress in history.  McConnell’s desk is known as the legislative graveyard where only 158 laws have been enacted of almost 15K bills introduced since 2019.

According to Bloomberg, Oracle will get full access to TikTok’s source code to ensure that there are no back doors for the Chinese government to gather data on US users.  President Trump is not happy with the terms and with Oracle only acquiring a minority stake in TikTok.  Trump said he is not prepared to sign off on anything.

Snowflake’s (SNOW) started trading Wednesday @ $245, well above its $120 offering price.  The stock touched $319 making the company the largest US IPO this year.

The economic calendar focus is Philly Fed and Claims @ 8:30am ET.  Building Permits and Housing Starts are released @ 10:00am ET.

Volatility is decreasing but Globex price action is signaling a volatility increase.

Size bias is bearish into the US session open.


 Posted by at 7:19 am

09/16/2020 ES Trade Plan Worksheet

 Pre-market Commentary  Comments Off on 09/16/2020 ES Trade Plan Worksheet
Sep 162020

It is a Fed day with an announcement @ 2:00pm ET followed by a press conference @ 2:30pm ET.  Expect markets to go into Fed wait mode in late morning until the announcement.  No significant changes are expected in rates and the Fed’s relaxed stance on inflation.

Cloud storage and computing company Snowflake will IPO today as SNOW.  The company expects 28 million shares to sell @ $120 which values the company at $33.3B.  Berkshire Hathaway (BRK.A) and Salesforce (CRM) have purchased millions of Snowflake shares.

Facebook (FB) is down premarket after the FTC said they are readying an antitrust case against the social media giant.  The FTC has been working on a broad investigation into the largest internet companies and FB’s antitrust case may be the first of several to come.

President Trump said his staff is close to deciding whether Oracle’s proposed alliance with China’s ByteDance will be approved.  The deal allows ByteDance to keep majority ownership in their TikTok app while Oracle becomes their US technology partner.  TitkTok’s global business would become a US based company while remaining a unit of ByteDance.

FedEx (FDX) is up over 9.5% premarket after adjusted earnings per share 80% higher than expectations ($4.87/share vs $2.70/share expected).  Revenue is up 14% to $19.2B, almost $2B above expectations.  The pandemic stay-at-home and work-from-home trends have accelerated Fedex’s growth.

The economic calendar focus is Retail Sales @ 8:30am ET and Oil @ 10:30am ET.

Volatility continues to shrink but remains elevated.  The Fed announcement and press conference could add some volatility after 2pm ET.

Size bias is long into the 8:30am ET Retail numbers on lighter than recent Globex volume.


 Posted by at 7:03 am