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

02/17/2020 Presidents Day

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Feb 172020

US stock markets are closed in observance of Presidents Day.  DTG will resume posting tomorrow, Tuesday, Feb 18.  Enjoy the 3-day weekend!



 Posted by at 5:08 am

02/13/2020 ES Trade Plan Worksheet

 Pre-market Commentary  Comments Off on 02/13/2020 ES Trade Plan Worksheet
Feb 132020

A new tomography Covid-19 detection technique has catapulted the number of known virous cases to over 60K, an increase of over 15K in one day.  The fatalities are approaching 1400 with only 2 confirmed deaths outside of China.  The Covid-19 news brought out the stock market bears overnight.

Cisco (CSCO) is down nearly 5% premarket after beating expectations but cautioning because of growing global economic uncertainties which could lead to longer decision cycles and lower technology spending.

Applied Materials (AMAT) is up nearly 2% after beating expectations and topping analysts forecasts for next quarter.

MGM’s long-time Chairman and CEO Jim Murren announced he was stepping down and MGM was pulling their 2020 financial targets because of Covid-19 uncertainty.  Their Macau casinos are closed and travel bans from China and Asia will have a significant impact.

Earnings include NVDA, BABA, PEP, ROKU, MAT, KHC, DDOG, YELP, ACB, and WM.

The economic calendar focus is CPI @ 8:30am ET.  Weekly Claims are also @ 8:30am ET.

Volatility continues to consolidate.  Over the last week the 5-day ATR has dropped nearly half, from over from 61 ES points to 31.

Size bias is short into the CPI numbers but they did not materially participate in the Globex selloff.


 Posted by at 6:28 am

02/12/2020 ES Trade Plan Worksheet

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Feb 122020

The coronavirus now has an official World Health Organization name, Covid-19.  Gone are the days where a virus is named after a location like the Spanish flu or Lyme disease.  Covid-19 infections now at 45K, appear to be slowing for the first time in 2 weeks.  The fatality count is over 1100.

At a New Hampshire rally, an unabashed President Trump encouraged his supporters to get out and vote for the weakest Democrat candidate.  New Hampshire primaries are open to all voters.  Bernie Sanders won the New Hampshire primary after a poor showing in Iowa.

Lyft (LYFT) is down premarket after beating loss expectations but lowering revenue expectations for next quarter.

Bed Bath & Beyond (BBBY) is also down after posting smaller profit margins and disappointing holiday sales.  On the plus side, their shift to increasing digital sales is working.  Online sales increased 20%.

Earnings include CSCO, CVS, AMAT, SHOP, TEVA, TW, EFX, TRIP, GOLD, and TAP.

The economic calendar is light with Oil @ 10:30am ET and the Federal Budget Balance @ 2:00pm ET.

Fed Chair Powell testifies to the Senate Banking Committee starting @ 10:00am ET.  The Fed’s Harker speaks @ 8:30am ET.

Volatility is contracting as the ES continues to flirt with new all-time highs.

Size bias is long into the US session open, however GLOBEX volume has lightened considerably so the bias does not carry much weight.


 Posted by at 6:45 am