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

03/25/2019 ES Trade Plan Worksheet

 Pre-market Commentary  Comments Off on 03/25/2019 ES Trade Plan Worksheet
Mar 252019

A US recession starting???  The 3-month US Treasury yields are trading higher than 10-year notes, an inverted position which according to the Fed is a precursor to almost every US recession over the last 60 years.  The Fed’s Charles Evans says the inverted curve reflects the decline of long-term interest rates rather than a US recession.  However, US and European manufacturing have moved to multi-year lows which shows slowing US and European economies.

The US Attorney General released findings into the investigation that Trump or his campaign conspired with Russia.  Mueller reported they could find any evidence of collusion.  William Barr in his summary also added that although the report does not say the President committed any crimes, it also does not exonerate him from any crimes.

In business news, Apple (AAPL) is expected to unveil a new subscription video and revamped Apple News services today.  Earnings include WGO, and Red Hat (RHT) who is being acquired by IBM.

The economic calendar is light: Chicago Fed @ 8:30am EST and Dallas Fed @ 10:30am EST.  Volatility has certainly picked up a notch.  If the ES 2790.25 Globex low is cleared, the bears could be in for a big day.  The bulls have plenty of room to work to the upside.  No Size bias as Globex volume was strong but mixed.


 Posted by at 7:10 am

03/22/2019 ES Trade Plan Worksheet

 Pre-market Commentary  Comments Off on 03/22/2019 ES Trade Plan Worksheet
Mar 222019

European New Orders Index fell to 44.5, a six-year low.  European exports are drying up as the US/China trade war drags on.  Eurozone Manufacturing PMI came in at 47.6, the deepest downturn since 2013.  The ES reaction however is only a marginal pullback against yesterday’s 50-point runup pulled by Apple’s (AAPL) monster 3.7% move.

The US has sanctioned two Chinese companies for allegedly helping North Korea obtain materials for nuclear weapons.  The sanctions could complicate the US/China trade negotiations which next week.  China is showing some renewed resistance to US demands.

Nike (NKE) is down over 4% premarket after missing 3rd quarter estimates and warning the strong US dollar may affect future sales.  Boeing (BA) comes under more pressure as the airline Garuda Indonesia has requested Boeing cancel an order for 49 of their 737 MAX jets citing lost confidence by their customers in the airplane.  Earnings include TIF and JKS.

No tier one data on the economic calendar which includes Flash PMIs @ 9:45am EST; Existing Home Sales and Final Wholesale Inventories @ 10:00am EST.  Volatility proved me wrong yesterday as the Philly Fed jumpstarted a big uptrend day which has expanded volatility.  Reaction to the European data could keep volatility interesting today, otherwise I expect the ES will settle in around yesterday’s high.  Size bias is long into the US session open on increased overnight volume.


 Posted by at 7:10 am