Welcome to The Discovery Trading Group

 Announcements  Comments Off on Welcome to The Discovery Trading Group
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

07/19/2018 ES Trade Plan Worksheet

 Pre-market Commentary  Comments Off on 07/19/2018 ES Trade Plan Worksheet
Jul 192018

Trade war concerns remain in the forefront of market focus.  Japan’s exports to the US fell 0.9% in June, the first decline in 1 ½ years even though their trade surplus grew $5.24B because of slowing imports from the US.  The Fed’s Beige Book showed that US companies are questioning Trump’s trade policies.  US Manufacturers “expressed concern about tariffs and in many districts reported higher prices and supply disruptions that they attributed to the new trade policies.”  In the Fed Chair Powell’s testimony yesterday, he said “we hear many many stories of companies that are concerned and are now beginning to make investment decisions, or not make them, because of [Trump’s trade policies].”  The economic calendar focus is Philly Fed and Claims @ 8:30am EST.  The Fed’s Quarles speaks @ 10:00am EST in a pre-recorded video.  IBM is up nearly 3% pre-market on an earnings estimates beat.  Corporate earnings on deck today include MSFT, BK, DHR, DPZ, NUE, TRV, UNP, and PM.  Volatility continues to shrink with trade war concerns countering corporate earnings.  Size bias is short into the US session open, but it’s summer and there was very little overnight Size interest.


 Posted by at 6:38 am

07/18/2018 ES Trade Plan Worksheet

 Pre-market Commentary  Comments Off on 07/18/2018 ES Trade Plan Worksheet
Jul 182018

Fed Chairman Powell’s upbeat assessment of the US economy and the lack of a new volley in the US vs the world trade war brought out the bulls yesterday.  Powell refrained for entering the politics surrounding the global trade war but did caution that trade wars would impact long-term growth.  No new expectations were set for rate hikes as the markets have accepted an expected hike in September and December.  Powell testifies again this morning, this time to the House Financial Services Committee staring @ 10:00am EST.  GOOGL is facing a $5B EU antitrust fine for contracts tying android smartphones to exclusive sales of Google apps.  The fine is a record, beating last year’s $2.4B EU fine against GOOGL for giving Google shopping preferences over other companies.  Another executive of a major corporation has stepped down for violating codes of conduct; this time it’s Texas Instruments CEO Brian Crutcher.  The economic calendar focus is housing data @ 8:30am EST and Oil @ 10:30am EST.   It’s a big day for earnings with MS, EBAY, AXP, IBM, ABT, TMUS, and USB reporting.  In the opening week of 2nd quarter earnings, 85% have beat earnings estimates.    After yesterday’s trend day, volatility is a tough call for today.  It’s doubtful Powell will add much new in today’s testimony and there is always the chance of Trump tweet or new trade war salvo.  Assume yesterday’s low volatility will continue unless the bulls break to new highs or some news brings out the bears.  No Size bias as overnight trading was mixed and light.


 Posted by at 7:04 am