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

10/27/2020 ES Trade Plan Worksheet

 Pre-market Commentary  Comments Off on 10/27/2020 ES Trade Plan Worksheet
Oct 272020

Uncertainty over a fifth coronavirus relief package and US election outcomes remain the underlying focus for US stocks.

US coronavirus cases continue to surge, now above 8.7M cases and 225.7K deaths.

A deeply divided US Senate fast tracked and Amy Coney Barrett to the Supreme Court in a Republican only 52-48 vote.  The confirmation benefited from the “nuclear option” Republican Senators invoked in 2017 which changed the Supreme Court nomination rules from 60 required votes.  Barrett is President Trump’s third Supreme Court pick which is now packed with conservatives.

Senate Majority Leader Mitch McConnell and Senate Republicans made filling the federal courts a priority since 2017.  For the first time in over 40 years, there are no vacancies at the circuit court level where nearly 30 percent of the judges were nominated by Trump.  Trump’s judicial picks will influence US laws for decades.

Charles Schwab (SCHW) announced they will cut 1,000 jobs of overlapping roles after their Oct. 6, $26B acquisition of TD Ameritrade.  The cuts represent 3% of their workforce.  Schwab now has around $6 trillion in client assets.

Earnings include MSFT, AMD, CAT, MMM, RTX, PFE, MRK, LLY, HOG, and JBLU.

The economic calendar focus is Durable Goods Orders @ 8:30am ET and Consumer Confidence @ 10:00am ET.  The calendar also includes HPIs @ 9:00am ET and Richmond Mfg. Index @ 10:00am ET.

Volatility remains steady and elevated.

Size bias is short into the US session open on lighter than recent Globex volume.


 Posted by at 7:45 am

10/26/2020 ES Trade Plan Worksheet

 Pre-market Commentary  Comments Off on 10/26/2020 ES Trade Plan Worksheet
Oct 262020

US stock futures are down overnight as stimulus talks remain in a stalemate and coronavirus cases surge.  House Speaker Nancy Pelosi said the House could bas a relief bill this week, but it is up to the Republican controlled Senate and the President to pass the bill.

US coronavirus cases hit a single day record of 85K while deaths have passed 225K.

The Chinese Foreign Ministry said they will impose sanctions on the defense units of Boeing, Lockheed Martin, and Raytheon Technologies in response to the US approving $1.8B in arms sales to Taiwan last week.  Boeing responded that they have been working closely with the Chinese government for almost 50 years helping them build their aviation system and Boeing remains committed to the long-term relationship.  Boeing (BA) is down nearly 2% premarket.

In the Justice Department suit filed against Google last week, it was revealed that Google pays Apple $8B to $12B per year to be the default search engine on Apple devices.  This amounts to 14% to 21% of Apple’s annual profit.  Apple devices account for almost half of Googles search traffic.  Losing the Apple agreement is a “code red” situation to Google, one a former Google executive described as “terrifying”.

It is a big week for technology earnings with the likes of AAPL, AMZN, MSFT, GOOGL, and FB reporting.  For today, focus is on NXPI, TWLO, and FFIV.

The economic calendar is light with New Home Sales @ 10:00am ET.

Volatility remains steady and elevated.

Size bias is short into the US session open.


 Posted by at 7:15 am