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

02/18/2019 Presidents Day

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Feb 182019

Today, Feb 18, 2019 is Presidents Day.  US stock markets are closed.  DTG will resume posting tomorrow, have a great long weekend!

 Posted by at 6:06 am

02/15/2019 ES Trade Plan Worksheet

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Feb 152019

China economic data shows both export and domestic demand weakening, factory gate inflation falling the 7th month in a row to a 2016 low and consumer prices slowing.  The numbers may of affected the US/China trade talks in Beijing which ended earlier today.  Mnuchin said the meetings were productive but Kudlow said the $200B of new Chinese tariffs March 2 deadline remains in place.

Meanwhile back in the US, President Trump is expected to sign a bill to keep the US federal government open.  Since he did not get his wall funding, Trump is expected to declare a national emergency to obtain the funds.

Facebook is negotiating a multi-billion dollar fine with the FTC over privacy practices.  Fines from other countries are likely coming.  NVDA is up over 5% premarket on beating revised estimates and forecasting a growing gaming market that’s highly dependent on the Chinese market.  Earnings for today include PEP, DE, NWL, and MCO.

The economic calendar is full but light.  Focus is the 10:00am EST Consumer Sentiment.  Other data releases include Empire State and Import Prices @ 8:30am EST; Capacity Utilization Rate and Industrial Production @ 9:15am EST.

Volatility remains moderate; both the bulls and bears have room to work although bullish movement above the 2763s should be constrained.  Monday is a US Presidents Day and stock markets will be closed.  Thus volatility may dry up today as the day wears on.  Size bias is long into the US session open on decent Globex volume.


 Posted by at 6:23 am

02/14/2019 ES Trade Plan Worksheet

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Feb 142019

Chinese exports are up 9.1% in January while US imports into China have fallen 42%, a large part due to their embargo of US soybeans.  There is cautious optimism for the US/China trade negotiations that restarted earlier today while Trump has suggested he would push out the March 2 deadline by 60 days to give enough time to reach a new comprehensive trade deal.

Shares of Cisco and Yelp are both up premarket on earnings beats.  On deck today are KO, NVDA, AMAT, CBS, AVP, CME, and YETI.  The economic calendar focus is on the 8:30am EST numbers: PPI, Retail Sales, and Claims.

Volatility continues to remain steady as the bulls are in waiting mode over the US/China trade talks.  The thesis that upside price movement remains muted continues until the bulls find a reason to bust higher.  No Size bias again this morning as Globex Size volume was lighter than recent and mixed.


 Posted by at 6:59 am