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

10/26/2021 ES Trade Plan Worksheet

 Pre-market Commentary  Comments Off on 10/26/2021 ES Trade Plan Worksheet
Oct 262021

Market focus remains on earnings which so far in the third quarter have come in strong, fueling the S&P 500 to new all-time highs.

Tesla (TLSA) reached a 1 trillion market cap on Monday after news that Hertz Global made an order for 100,000 Model 3s.  The milestone puts Tesla in a category with only 5 other companies: Amazon, Apple, Facebook, Google, and Microsoft.

Despite weeks of bad press from a whistleblower and regulators’ crackdown against misinformation and involvement with the January 6 insurrection, Facebook’s (FB) core users still want to keep in touch with family and friends.  Daily Facebook usage is close to 2 billion users a day.  Monthly active users is approaching 3 billion.  Facebook earnings were mixed, but good enough to have FB up 2.4%, inching back towards its $384 all-time high.

The FDA will meet and likely approve the Pfizer (PFE) for children ages 5 through 11 today.

On Capital Hill, a hearing on “Protecting Kids Online” will grill executives from SnapChat, TikTok, and Google’s YouTube.

Earnings include CNC, UPS, GE, MMM, LLY, HAS, RTX, IVZ, SHW, WM, SPGI, and LMT premarket; MSFT, GOOGL, TXN, COF, TWTR, JNPR, AMD, and V post-market.

The economic calendar includes HPI and S&P/Case-Shiller Composite-20 HPI @ 9:00am ET, Conference Board Consumer Confidence, Richmond Fed Manufacturing Index, and New Home Sales @ 10:00am ET.

Volatility remains steady.  With the S&P 500 at all-time highs, volatility could increase in either direction.

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


 Posted by at 7:46 am

10/25/2021 ES Trade Plan Worksheet

 Pre-market Commentary  Comments Off on 10/25/2021 ES Trade Plan Worksheet
Oct 252021

Fed Chair Jerome Powell issued a warning about increasing inflationary pressures on Friday, changing course from his insistence that pandemic inflation was transitory.  Reclusive CEO of Twitter and Square Jack Dorsey issued a warning about hyperinflation, “Hyperinflation is going to change everything, and it’s happening.”  Dorsey is heavy in digital currencies which would benefit greatly from devaluation of the US dollar.

The Fed has been pumping dollars into the global economy through quantitative easing and government bond purchases sine the financial crisis of 2008, but central banks of major currencies have been making similar moves, masking inflationary pressures.

China warned of a Delta coronavirus surge which has spread to 11 provinces.  The country expects the virus infections to worsen in the coming weeks.  China is imposing travel restrictions, trying to slow the virus spread before the 2022 Winter Olympics hosted by China.  Over 75% of China’s population have at least one vaccination dose of the 5 vaccines available.

Market Focus remains on corporate earnings as we enter the busiest week for third quarter earnings which is heavy on big tech.  Earnings for Monday include Otis Worldwide Corp (OTIS), Kimberly-Clark Corp. (KMB), and Facebook (FB).

The economic calendar includes Chicago Fed @ 8:30am ET and Dallas Fed @ 10:30am ET.

Volatility remains steady as the S&P 500 flirts with new all-time highs.  Volatility increase risk is to the downside.

No Size bias as Globex volume was far too light for a reading.


 Posted by at 6:46 am