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

01/23/2020 ES Trade Plan Worksheet

 Pre-market Commentary  Comments Off on 01/23/2020 ES Trade Plan Worksheet
Jan 232020

Asian stock markets are down sharply as concerns over the deadly coronavirus could grow into a worldwide pandemic.  China shut down travel outside of Wuhan, a city of about 11 million where the virus has claimed at least 17 lives and over 500 are known to be infected.

In the US, stronger than expected earning from Texas Instruments is buoying US technology and semi-conductor stocks and offsetting Asia’s coronavirus bearish pull.

Amazon (AMZN) filed a court motion against Microsoft (MSFT) to block Microsoft from starting work on the Department of Defense JEDI $10B cloud project.  Amazon claims the contentious between their CEO Jeff Bezos and President Trump played a role in Microsoft winning the project.  Amazon claims Trump used “improper pressure” on the Department of Defense to choose Microsoft over Amazon.

Ford (F) made a regulatory that says they plan to take a $2.2B special charge related to pension costs which will reduce net income by $1.7B for the fourth quarter.

Earnings include PG, ABBV, AAL, LUV, TRV, INTC, CMCSA, CL, UNP, KMB, SWKS, and FCX.

The economic calendar focus is Claims @ 8:30am ET and Oil @ 11:00am ET.  The ECB has a policy announcement @ 8:30am ET followed by a press conference @ 8:30am ET.

Day 3 of the Trump impeachment Senate Trial, the House Managers began their 24 hours of laying out their case to remove President Trump from office.  Trump didn’t help his obstruction of Congress charge by telling reporters in Davos “I thought our team did a very good job.  But honestly, we have all the material.  They don’t have the material.”  House Manager Val Demings jumped all over the statement tweeting “This morning the President not only confessed to it [the obstruction charge], he bragged about it.”

Volatility should be similar to yesterday unless the ES takes out 3310, then downside volatility should increase.

Size bias is bearish into the US session open.


 Posted by at 6:38 am

01/22/2020 ES Trade Plan Worksheet

 Pre-market Commentary  Comments Off on 01/22/2020 ES Trade Plan Worksheet
Jan 222020

Day 2 of President Trump’s Senate impeachment trial ended at 2am ET after a midnight heated exchange and 1:40am ET party line vote to adopt Senator McConnell’s impeachment rules.  The trial thus far has had little influence on the markets.

China is acting swiftly in cooperation with the World Health Organization to contain the deadly coronavirus.  There have been over 440 confirmed cases and 9 deaths.  China’s actions are calming the markets.

Netflix (NFLX) is up premarket after earnings and posting 550K new US/Canada subscribers and a better than expected 8.3 million international subscribers.

IBM is also up premarket after beating expectations on strong and growing cloud revenue.

Earnings include JNJ, TXN, ABT, and ALK.  T

he economic calendar includes HPI @ 9:00am ET and Existing Home Sales @ 10:00am ET.

Expect volatility to the upside to be muted.  Volatility could increase to the downside given the impeachment trial wildcard.

No Size bias as Globex volume was higher than recent but mixed.


 Posted by at 6:25 am

01/20/2020 MLK Holiday

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Jan 202020

US stock markets will be closed today, Monday Jan 20, 2020 for the federal Martin Luther King Holiday.  DTG will resume posting tomorrow, Tuesday, Jan 21.  Enjoy the long weekend!

 Posted by at 5:10 am