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

05/22/2019 ES Trade Plan Worksheet

 Pre-market Commentary  Comments Off on 05/22/2019 ES Trade Plan Worksheet
May 222019

It’s a Fed day with FOMC meeting minutes released at 2:00pm EST.  The White House continues their unpredictable moves to secure a US/China trade deal.  After easing Huawei Technology restrictions, the NY Times reported the White House is looking to target and blacklist additional Chinese companies.  The Commerce department may require US companies to get approval before supplying parts to world’s largest video surveillance company Hikvison Digital Technology.

Cui Tiankai, the Chinese ambassador in the US told Fox News, “It’s quite clear the US side that more than once changed its mind overnight and broke the tentative deal already reached… So we are still committed to whatever we agree to do, but it is the US side that changed its mind so often.”

Nordstorm (JWN) is down over 9% and Urban Outfitters (URBN) is down nearly 7% after both retailers missed estimates.  Home Depot (HD) reported stronger than expected earnings although the stock barely moved.  Earnings include LOW, TGT, VFC, NTAP, SNPS, LB, and ADI.

The economic calendar is light with Oil Inventories @ 10:30am EST.  Volatility is beginning to shrink as markets continue to wait on US/China trade negotiation information and summer is starting to kick in.  Volatility could dry up into the morning into the FOMC minutes release.  Size bias is short into the US session open.


 Posted by at 6:43 am

05/21/2019 ES Trade Plan Worksheet

 Pre-market Commentary  Comments Off on 05/21/2019 ES Trade Plan Worksheet
May 212019

The US Commerce Department decided to ease Huawei Technology restrictions for up to 90 days to give US companies time to find new suppliers and make the necessary changes.  Chinese officials are not happy.  China’s EU Ambassador Zhang Ming said to Bloomberg “This is wrong behavior, so there will be a necessary response…  Chinese companies’ legitimate rights and interests are being undermined, so the Chinese government will not sit idly by.”

Meanwhile U.S. footwear and apparel retailers Nike, Under Armour, Foot Locker and J.C. Penney have banded together in an effort to persuade Trump to reconsider tariffs on Chinese footwear imports.  The estimated $7B in tariffs will be passed along to consumers and will disproportionately fall on working-class families who are bearing the brunt of the rising prices due to the tariffs (as a side note, my HVAC guy told me yesterday that his parts costs have increased 9% over the last 3 months).

Another retail chain bites the dust.  Ascena Retail Group (ASNA) announced they would close all 650 of their Dressbarn stores and focus on their more profitable Ann Taylor and Lane Bryant brands.  Earnings are heavy on retail and include HD, KSS, JWN, TJX, JCP, TOL, AZO, WSM, and URBN.

The economic calendar is light with Existing Home Sales @ 10:00am EST.  Fed speakers include Evans @ 10:45am EST and Rosengren @ 12:00pm EST.  Volatility ticked down yesterday but still remains elevated as market focus continues to remain on US/China trade negotiations.  Size bias is long into the US session open.


 Posted by at 6:27 am