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

01/20/2021 ES Trade Plan Worksheet

 Pre-market Commentary  Comments Off on 01/20/2021 ES Trade Plan Worksheet
Jan 202021

Joe Biden will be sworn in as the 46th president of the United States around 12 p.m. ET.  Like his predecessor Donald Trump, Biden will sign a flurry of executive orders to reverse orders signed by previous administration.  The orders will include the US rejoining the Paris climate accord, lifting the travel ban from Muslim countries, and halting evictions and student loan payments during the pandemic.

President Trump leaves a legacy defined by 24.25 million coronavirus cases and 402K deaths.  US deaths have increased by 100K over the last 5 weeks and are expected to exceed half a million people by mid-February.  The US economy is in the worst shape since the Great Depression.

Meanwhile, countries that took the virus seriously with strict lockdowns and contact tracing have few coronavirus cases.  For example, New Zealand, population about 5 million has 2,267 confirmed cases.  Contrast with the state of Georgia (population 10 million), which was the first US state to reopen for business, has 805K cases and 12,179 deaths.

Netflix (NFLX) is up over 12% announced they have exceeded 200 million subscribers.  The company announced they no longer need outside financing and their 2021 free cash flow will be around breakeven.

Earnings include UNH, PG, MS, UAL, BK, USB, DFS, and KMI.

The economic calendar is light with NAHB Housing Market Index @ 10:00am ET.

Volatility remains muted to the upside with potential to increase to the downside.

No Size bias as Globex volume was both light and mixed.


 Posted by at 6:34 am

01/19/2021 ES Trade Plan Worksheet

 Pre-market Commentary  Comments Off on 01/19/2021 ES Trade Plan Worksheet
Jan 192021

President-elect Biden’s Treasury Secretary candidate and former Fed Chair Janet Yellen begins her Senate confirmation hearings @ 10:00am.  In pre-released text, Yellen will tell the Senate Finance Committee that the federal government needs to take more action or risk a “longer, more painful recession.”

US coronavirus cases passed 24 million and deaths hit 399K.  January is on pace to become the deadliest month of the pandemic for the US.  Globally, cases have reached 95.6 million and 2.04 million deaths.

Biden’s press secretary Jen Psaki said the Biden administration will reject Trump’s move to rescind travel bans starting Jan 26.  The CDC last week issued an order requiring all air travelers to have negative coronavirus test results before traveling.  Psaki said the new president plans to strengthen public health measures for international travel.

Earnings on Tuesday include GS, NFLX, BAC, JBHT, HAL, SCHW, IBKR, STT, and CMA.

The economic calendar is bare.

Volatility remains steady but the long holiday weekend has already expanded daily range premarket.

Size bias is a divergent short into the US session open.


 Posted by at 6:14 am

01/18/2021 Martin Luther King Holiday

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Jan 182021

US stock markets are closed Monday in observance of Martin Luther King Holiday.  DTG will resume posting tomorrow, Tuesday, Jan 19, 2021.  Enjoy the long weekend!

 Posted by at 5:35 am