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

04/16/2019 ES Trade Plan Worksheet

 Pre-market Commentary  Comments Off on 04/16/2019 ES Trade Plan Worksheet
Apr 162019

Optimism over perceived US/China trade negotiation progress has the ES up overnight.  Larry Kudlow reinforced Mnuchin’s weekend comments by telling the Associated Press that theirs been good progress “pretty much across the board” including China’s technology policies, currency reform, and enforcement.  He said steady talks continue since the meeting in DC.

Disney’s acquisition of Fox’s entertainment business upped their stake in Hulu to 60%.  AT&T has agreed to sell their Hulu stake for $1.43 billion which will be split between Disney and Comcast’s NBCUniversal who currently has a 30% stake.  Disney’s CEO Bob Iger said Disney may be interested in acquiring the rest of Hulu.

First quarter earnings are in focus, JPMorgan and Citigroup earnings started the ES on a bearish move yesterday.  Some heavy hitters report today: BAC, UNH, NFLX, IBM, JNJ, BLK, CSX, and UAL.

The economic calendar is light: Industrial Production @ 9:15am EST and NAHB Housing Market Index @ 10:00am EST.  Volatility should remain restrained to the upside with greater potential to expand to the downside once the morning earnings numbers are absorbed.  Size bias is an interesting divergent short into the US session open; they’ve been net sellers into the Globex rally.


 Posted by at 6:48 am

04/15/2019 ES Trade Plan Worksheet

 Pre-market Commentary  Comments Off on 04/15/2019 ES Trade Plan Worksheet
Apr 152019

US Treasury Secretary Steven Mnuchin spoke to reporters about the US/China trade negotiations during the weekend IMF meetings.  Mnuchin commented that he was unsure if anymore face-to-face meetings would be required.  Reuters reported that the US is backing off demands to curb Chinese industrial subsidies and instead focusing on more achievable goals to reach a trade deal.  The hopes that a deal is closer has Asian stocks mostly higher.

The ES however appears to have a Game of Thrones hangover as Globex volume is showing little interest.  Citigroup and Goldman Sachs Group are the earnings focus and could set the tone for today.  Also on deck as first quarter earnings season gets underway are MTB, JBHT, and SCHW.

The economic calendar is light with Empire State @ 8:30am EST.  The Fed’s Evans is on CNBC’s Squawk Box @ 8:30am EST and has a conference speech scheduled for 1:00pm EST.  Friday’s technical break higher has moved the ES into territory where upside movement should become more difficult as the ES works towards it’s Sep 21, 2956.50 back adj all-time high.  Expect upside volatility to be muted with better chance of increased volatility to the downside.  Size bias is clearly long into this morning’s big bank earnings.


 Posted by at 6:22 am