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

01/21/2022 ES Trade Plan Worksheet

 Pre-market Commentary  Comments Off on 01/21/2022 ES Trade Plan Worksheet
Jan 212022

Starbucks (SBUX) became the first major company to reverse their worker Covid-19 vaccine mandate following last week’s Supreme Court ruling striking down the Biden administration’s attempt to slow the Covid-19 spread through corporate vaccine mandates.  The newly elected Czech Republic’s government also reversed vaccination requirements to reduce “deepening fissures” among the electorate.

Countering, six hospital systems in GA held a press conference pleading directly to citizens to get vaccinated and boosted while avoiding any mention of government or corporate mandates.  The hospitals in GA are at 110% capacity, nurses and doctors are physically and emotionally drained after fighting the pandemic for 2 years, and many sick are being turned away from hospital care as only the most critical are prioritized.

Piedmont Healthcare Covid-19 task force executive director Dr. Jayne Morgan said, “even though the vaccines are challenged (by the omicron variant), they remain a success… (they) by and large have kept us out of the hospital and out of the morgue.”

Gloomy forecasts from Netflix (NFLX) and Peloton (PTON) sent both stocks down.  Netflix added 8.28 million subscribers, below the 8.4 estimated.  For the next 3 months, the company estimated 2.5 million against the street’s estimate of 5.9 million.  Peloton is recovering premarket after Thursday’s plunge wiped $2.5 billion from it’s market value on “false” CNBC reports the company was preparing to suspend production for 2 months due to slowing demand.

Intel (INTL) is up 0.5% premarket after announcing plans to invest $20 billion in 2 Ohio chip plants that will create 3,000 jobs and use 7,000 workers to build the plants.

Corporate earnings include Schlumberger (SLB) and Ally Financial (ALLY) premarket.

The economic calendar is light; CB Leading Index @ 10:00am ET.  President Biden gives a speech on the semiconductor shortage @ 11:00am ET and Treasury Sec Janet Yellen speaks @ 11:30am ET.

Volatility is high which should continue today.  In high volatility times, it’s usually best to identify the intraday trend and trade with it, not against it; either with momentum or trend pull-backs.

Size bias is short on significant volume into the US session open.


 Posted by at 7:39 am

01/20/2022 ES Trade Plan Worksheet

 Pre-market Commentary  Comments Off on 01/20/2022 ES Trade Plan Worksheet
Jan 202022

Tech shares are rebounding this morning as treasury yields ease.  The Nasdaq fell into 10% correction area on Wednesday.  According to Refinitive, fourth quarter earnings for S&P 500 companies is running 8.3% above expectations so far.  Consumer demand remains strong despite escalating inflation.

Wages continue to increase across the board.  Big banks Goldman Sachs (GS), Citigroup ( C ), and JPMorgan Chase (JPM) have all increased pay to retain workers.  Goldman Sachs took a noticeable hit on earnings from the pay hikes.

With higher pay, consumers seem comfortable paying more.  Companies like Netflix and P&G are raising prices across the board.

To reinvigorate growth, China has made a second rate cut this week, lowering mortgage and lending rates.  The move gave a boost to Asian based tech stocks.

Despite posting a narrower than expected loss, United Airlines (UAL) is down premarket.  Flight demand is improving with capacity running between 82% and 84% of 2019 levels.

Chipmaker Advanced Micro Devices (AMD) is down premarket after Piper Sandler cut AMD’s rating and price target.  Piper Sandler noted that PC shipments are down 5% globally as home schooling and work from home demand fade as workers return to offices.

Earnings include Travelers (TRV), American Airlines (AAL) and Norther Trust (NTRS) premarket and Netflix (NFLX) after the bell.

The economic calendar includes Philly Fed and Claims @ 8:30am ET, Existing Home Sales @ 10:00am ET, and Oil @ 11:00am ET.

Volatility is elevated and should remain that way for Thursday.

Size bias is long into the US session open.


 Posted by at 7:23 am