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

10/16/2020 ES Trade Plan Worksheet

 Pre-market Commentary  Comments Off on 10/16/2020 ES Trade Plan Worksheet
Oct 162020

US stock markets are cautious and choppy over the diminishing hopes for a coronavirus stimulus package before the Nov 3 elections, worsening unemployment, and a resurgence of European coronavirus cases.

President Trump told Treasury Secretary Steven Mnuchin that he’s willing to raise a relief package above $1.8T however it’s becoming clear that Senate Majority Leader Mitch McConnell and GOP Senators will not agree to an increase.

Europe has recorded their highest ever weekly number of Covid-19 cases.  Cases are surging in the UK, France, Spain, the Netherlands, Malta, and Slovakia.  More than half the EU are labeled red on the EU’s disease control agency map.

European aviation regulators deemed Boeing’s 737 MAX as safe again for European travel.  The evaluation is not complete, but Boeing’s addition of a third safety sensor could raise the plane’s safety to the highest level ever.  The Boeing 737 MAX has been grounded since March 2019 following two fatal crashes.

Gilead Sciences (GILD) is down premarket after a study by the World Health Organization found that their Remdesivir drug does not substantially affect coronavirus mortality rates.  The study shows the drug has little effect on how long patients stay in hospitals.

Twitter (TWTR) is back online after a widespread outage involving there application programming interface on Thursday.  Separately, Twitter is under fire from conservative media for removing alleged email conversations between former VP Joe Biden and his son Hunter during his employment in the Ukraine.

The information has earmarks of being fake, from a water damaged laptop that sat at a computer repair shop for years that the owner never retrieved.  When interviewed, the computer shop owner gave implausible timelines.  Anyways, the Republican-led Senate Judiciary Committee thinks Twitter’s actions are political and will vote next week to subpoena Twitter’s CEO Jack Dorsey for abuse of power.

Earnings include SLB, VFC, BK, JBHT, and ALLY.  The economic calendar focus is Retail Sales @ 8:30am ET and UoM Consumer Sentiment @ 10:00am ET.

Volatility remains elevated with the week’s ES daily range averaging over 54 points.

No Size bias as Globex volume was mixed.



 Posted by at 6:42 am

10/15/2020 ES Trade Plan Worksheet

 Pre-market Commentary  Comments Off on 10/15/2020 ES Trade Plan Worksheet
Oct 152020

Treasury Secretary Steven Mnuchin comments on Wednesday that it would be difficult to reach a stimulus package agreement before the Nov 3 elections started a US stock selloff that has continued through Globex.

Meanwhile, earnings from Bank of America and Wells Fargo missed estimates.

Electric car startup Lucid Motors priced their lowest-trim Lucid Air all electric car at $69,900 after federal tax credits.  Elon Musk tweeted “the gauntlet has been thrown down” and lowered the Tesla Model S starting price for a second time in a week to $69.420.

Following Delta Airlines (DAL) $5.4B quarterly loss earlier this week, United Airlines (UAL) posted a $1.8B loss.  On the positive side, United said they have reduced their daily cash burn to $25M a day versus $40M a day last quarter.

Wells Fargo (WF) has identified and fired over 100 employees who filed coronavirus relief fund applications for themselves with false claims.  JPMorgan Chase (JPM) fired several employees last week for the same offense.

Earnings include MS and SCHW.  Walgreens Boots Alliance (WBA) beat price per share expectations by 6 cents.

The economic calendar focus is Philly Fed and Claims @ 8:30am ET and Oil @ 11:00am ET.  Other data include Empire State and Import Prices @ 8:30am ET.  Fed speakers include Kaplan and Quarles, both @ 11:00am ET.

Volatility remains elevated and is ticking up in this week’s selloff.

Size bias is once again short into the US session open.


 Posted by at 7:29 am