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

11/18/2019 ES Trade Plan Worksheet

 Pre-market Commentary  Comments Off on 11/18/2019 ES Trade Plan Worksheet
Nov 182019

US and Chinese trade negotiators worked Saturday via a phone call.  China’s media outlet Xinhua said the talks were constructive, discussing “each other’s core concerns in the phase one deal and agreed to maintain close communication.”

Meanwhile, the People’s Bank of China lowered a key interest rate which some analysts see as the beginning of additional easing.

Offsetting the bullish trade war and monetary policy sentiment, police fired rubber bullets at protestors holed up in Hong Kong’s Polytechnic University.

HP’s (HPQ) board rejects Xerox’s (XRX) $33B unsolicited bid.  The HP board reviewed and considered the bid and “unanimously concluded that it significantly undervalues HP and is not in the best interest of HP shareholders.”  Additionally, the HP board said they would use their strong balance sheet to buyback their undervalued stock.

Ford (F) revealed a new all electric SUV called the Mustang Mach E.  The vehicle will have a targeted range of 300 miles and do 0 to 60 in about 3 seconds.  A special 150kW fast charger will provide about 47 miles with about 10 minutes of charging.  Earnings include MANU.

The economic calendar is light with NAHB @ 10:00am ET.  The Fed’s Mester speaks @ 12:00pm ET.

Volatility has been staying fairly constant despite the bullish moves of the last few days.  Expect upside movement to be muted although it’s a low news Monday which could enable a directional trend to develop.

Size bias is bullish into the US session open on light Globex volume.


 Posted by at 6:28 am

11/15/2019 ES Trade Plan Worksheet

 Pre-market Commentary  Comments Off on 11/15/2019 ES Trade Plan Worksheet
Nov 152019

US and Chinese trade negotiators have been working via video conferencing over the last few days and WH economic advisor Larry Kudlow said at the Council on Foreign Relations last night that the recent negotiations have made “very good progress” over “constructive talks.”  Kuldlow said “We’re getting close… the mood music is pretty good, and that has not always been so in these things.”

Nvidia (NVDA) is up slightly after beating earnings expectations but lowering revenue forecasts.  Gaming sales are up while data center sales slowed.  CEO Jensen Huang said “The realism of computer graphics is taking a giant leap forward with NVIDIA RTX.”  He also said the company expects “strong data center growth ahead” driven by “the rise of conversational AI and inference.”

Amazon (AMZN) web services unit has challenged the Pentagon over Microsoft’s (MSFT) $10B JEDI contract.  An Amazon spokesman said “numerous aspects of the JEDI evaluation process contained clear deficiencies, errors, and unmistakable bias.”  US Defense Secretary Mark Esper said that he was certain the process was fair.  Trump, who publicly feuds with Amazon CEO Jeff Bezos, had called for a review of the process when Esper took office; at the time Amazon looked like it would win the contract.

An antitrust probe of Google by 50 state attorneys general expands from advertising to include search and android.  Alphabet said they would cooperate with the antitrust investigations.

Earnings include JD and JCP.

The economic calendar focus is Retail Sales @ 8:30am ET.  The calendar also includes Import Prices and Empire State @ 8:30am ET, Capacity Utilization and Industrial Production @ 9:15am ET, and Business Inventories @ 10:00am ET.

Volatility is settling in around a 20-point ES daily range.  Given the Globex bullish move it could be a low volatility US session unless the bears find a reason to counter the US/China fueled bullish mood.

Size bias is bullish into the 8:30am ET Retail numbers.


 Posted by at 6:58 am