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

06/16/2021 ES Trade Plan Worksheet

 Pre-market Commentary  Comments Off on 06/16/2021 ES Trade Plan Worksheet
Jun 162021

It’s a Fed Day with the 2:00pm ET announcement followed by a 2:30pm ET Fed Chair Jerome Powell press conference.  Expect markets to be in Fed wait mode.  Policy is not expected to change but any indication that the Fed sees the US economy strengthening, inflation growing too rapidly or any discussion on reducing asset purchases could bring out the bears.  Reaction could be significant.

Oracle is down nearly 5% premarket after missing first quarter estimates and lowering forecasts.  CEO Safra Catz said Oracle was going to double their capital expenditures to make a heavy investment in their cloud computing.  Cloud computing revenue for the quarter was $7.4B which beat estimates and has become a major revenue source for the company.

Regeneron Pharmaceuticals (REGN) is up premarket after a British study showed that their antibody cocktail reduces the risk of COVID-19 death of hospitalized patients by 20%.  The therapy is already approved in the US for treating COVID outpatients.  Earnings include JEF, LEN and HOME.

The economic calendar includes Building Permits, Housing Starts, and Import Prices @ 8::30am ET and Oil @ 10:30am ET.

Volatility remains muted but could expand in reaction to this afternoon’s Fed activities.

No Size bias as Size stayed on the sidelines during Globex.


 Posted by at 6:50 am

06/15/2021 ES Trade Plan Worksheet

 Pre-market Commentary  Comments Off on 06/15/2021 ES Trade Plan Worksheet
Jun 152021

A Federal Reserve policy meeting starts today with a policy announcement on Wednesday @ 2:00pm ET.  The Fed is expected to leave rates and bond purchase rates unchanged, but their inflation projections will be scrutinized for clues as to when the Fed will start reducing the asset purchases.

The US and Europe are expected to announce an end to a 17-year aircraft subsidies dispute which included $11.5B in tariffs on each other’s exports.  The countries recognize that China’s Commercial Aircraft Corp is quickly becoming a major rival to Boeing and Airbus, changing the competitive landscape.  Shares of Boeing (BA) and Airbus (EADSY) are both up premarket.

The US and Europe also vowed to end a separate dispute over steel and aluminum, using the Biden administration to reset the relationship.

Earnings for Tuesday include ORCL, HRB, and LZB.

The economic calendar is full with Retail Sales, PPI, and Empire State @ 8:30am ET, Industrial Production @ 9:15am ET, Business Inventories and NAHB @ 10:00am ET.

Volatility remains muted as the S&P 500 presses new all-time highs.  Once this morning’s economic data is digested, the volatility could shrink as markets enter Fed wait mode for Wednesday afternoon’s policy announcement.

Size bias is bullish on light Globex volume into the 8:30am ET Retail Sales and PPI numbers.


 Posted by at 5:53 am