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

04/12/2021 ES Trade Plan Worksheet

 Pre-market Commentary  Comments Off on 04/12/2021 ES Trade Plan Worksheet
Apr 122021

US equities posted 3 straight weeks of gains as volatility continues to contract.

Fed Chair Jerome Powell was interviewed by CBS “60 minutes” where he repeated his statement that any US inflation would be temporary, and that the Fed would not raise rates until the US has reached maximum employment and inflation was back to 2%.  Powell said “It’ll be a while until we get to that place.”

Focus will be on Treasury yields as new 10-y bonds go to auction starting at 1:01pm ET.

Microsoft (MSFT) is close to purchasing Nuance Communications, developers of Dragon Naturally Speaking products.  The deal would be worth about $16B, Microsoft’s second largest deal behind purchasing LinkedIn.  Microsoft has been working closely with Nuance for the last 2 years in the health care industry, working with clinicians to capture patient discussion for electronic health records.

Chinese behemoth Alibaba (BABA) is up around 6% premarket after Chinese regulators levied a 4% revenue penalty totaling about $2.8B as an antitrust fine.  The fine was much less than the 10% fine allowed under Chinse law.

The economic calendar is very light with the Federal Budget Balance @ 2:00pm ET.

Quarterly earnings start this week but for Monday, there are no S&P 500 companies of note reporting.

No Size bias as Globex Size volume was just too light for a reading.


 Posted by at 6:43 am

04/09/2021 ES Trade Plan Worksheet

 Pre-market Commentary  Comments Off on 04/09/2021 ES Trade Plan Worksheet
Apr 092021

China PPI data shows the fastest rise in prices in over 4 years while Chinese consumer prices and fuel prices jumped higher.  US PPI is released @ 8:30am ET.

The S&P 500 continues to close at record highs bolstered by Federal Reserve support.  On Thursday, Chair Powell said he expected any rises in inflation to be temporary but if inflation becomes persistent, the Fed has the tools to handle it.

With over one third of the casted votes counted, Amazon’s (AMZN) Alabama warehouse is favoring 2-to-1 not to unionize.  About 55% of eligible voters casted a vote.  The union says Amazon took full advantage of a broken system and they would be calling on the labor board to hold Amazon accountable.

The plant-based meat alternative maker Impossible Foods is preparing to go public or merge with a special purpose acquisition company.  US plant-based food sales hit $7B, up 27% over last year.  Impossible Foods rival Beyond Meat (BYND) stock is up over 400% since their 2019 IPO.

Levi Strauss (LEVI) sees light at the end of the pandemic tunnel.  Levi expects sales growth of 24% to 25% in the first half of 2021 and raised their earnings estimates and dividend.

In addition to PPI @ 8:30am ET, the economic calendar includes Wholesale Inventories @ 10:00am ET.

Volatility continues to contract as the ES grinds higher.  The 5-day average daily range has dropped to 37 ES points, a level not seen since mid-February.

After selling into the ES moves higher over the last few days, Size bias is bullish into today’s US session open.


 Posted by at 6:48 am