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

08/15/2019 ES Trade Plan Worksheet

 Pre-market Commentary  Comments Off on 08/15/2019 ES Trade Plan Worksheet
Aug 152019

US stock markets had their worst day of 2019 on news of an inverted yield curve and the continuing deterioration of global economic indicators.  The Dow closed down 3.1%, the S&P 500 down 2.9%, and the Nasdaq 3.1%.  The ES was pointing up during Globex until China’s Finance Ministry announced they would retaliate if the US levies additional tariffs on September 1.

Cisco (CSCO) is down over 7% after beating estimates but lowering fourth quarter earnings forecasts.  They said sales to China customers dropped 25%.  Berkshire Hathaway disclosed they purchased an additional 54K of AMZN this quarter.  Some big-name earnings today: WMT, NVDA, BABA, AMAT, NIO, JCP, IHRT, and TRP.

The economic calendar focus is Retail Sales and Philly Fed @ 8:30am ET.  Other data includes Empire State, Non-Farm Productivity, Unit Labor Costs, and Claims @ 8:30am ET, Capacity Utilization and Industrial Production @ 9:15am ET, and Business Inventories @ 10:00am ET.

Volatility ticked up again yesterday and remains high.  Expect more volatility today.  Size bias is bearish into the 8:30am ET numbers.


 Posted by at 6:24 am

08/14/2019 ES Trade Plan Worksheet

 Pre-market Commentary  Comments Off on 08/14/2019 ES Trade Plan Worksheet
Aug 142019

The delay of US tariffs until December on China manufactured electronics and computers brought out the bulls yesterday, but new Chinese factory output and retail spending shows the world’s 2nd largest economy is slowing.

Meanwhile Germany’s economy shrank and is now teetering on a recession.  The US 10-year Note has slipped into inversions below the 2-year notes for the first time since 2007.  This inversion indicator has signaled almost every US recession over the last 60 years.

In corporate news, the FAA has banned 450 thousand Apple MacBook Pros sold between Sep 2015 and Feb 2017 from all flights.  The computers are a safety risk as their batteries which may overheat.  Earnings include CSCO, M, LK, and A.

The economic calendar is light with Import and Export Prices @ 8:30am ET and Oil @ 10:30am ET.  Volatility remains high.  Size bias is short into the US session open.



 Posted by at 7:15 am