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

11/25/2021 US Thanksgiving Holiday

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Nov 252021

US markets are closed, Thursday, November 25 for Thanksgiving.  US stock markets will be open Friday for a shortened session.  DTG will resume posting on Monday, November 29.  Have a great long weekend!


 Posted by at 5:30 am

11/24/2021 ES Trade Plan Worksheet

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Nov 242021

Germany is dealing with a COVID infections surge amid disappointing vaccination rates.  The country is considering a full lockdown which could happen in the next few days.  COVID infection rates are on the rise across Europe.

Global oil prices are down slightly after the US released 50 million barrels, the first release of strategic oil since 2011.

The Gap (GPS) and Nordstrom (JWN) both posted weaker than expected earnings and have been hit hard by supply chain disruptions.  The Gap was impacted by factory closures in Vietnam and rising freight prices.  Nordstrom warned of holiday supply shortages and rising labor costs.

Tesla (TSLA) continues to move lower as CEO Elan Musk continues to sell shares.  Musk has sold about 9.2 million shares worth about $9.9 billion and is about halfway through his Twitter promise to sell 10% of his shares.

Washington DC should be quiet today as Biden and Congress are on Thanksgiving holiday.

Premarket earnings include Deere & Co. (DE).

The economic calendar is overflowing as many shortened holiday week events are crammed into today: GDP, Durable Goods, Claims, Goods Trade Balance and Wholesale Inventories @ 8:30am ET, Core PCE, UoM Consumer Sentiment, New Home Sales, and Personal Income/Spending @ 10:00am ET, Oil @ 10:30 am ET, and most importantly, FOMC Minutes @ 2:00pm ET.

Volatility continues to tick up but after the morning’s flurry of economic data, volatility could dry up into the 2pm ET Fed minutes as traders take off for the long Thanksgiving holiday weekend.

Size bias is down into the 8:30am ET numbers on lighter than recent Globex volume.


 Posted by at 7:19 am

11/23/2021 ES Trade Plan Worksheet

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Nov 232021

President Biden has made his decision for continuity with monetary policy by nominating the current Fed Chair Jerome Powell who should get bipartisan support in the Senate.  By doing so, Biden implicitly approves of Powell’s past actions in fighting COVID-19 and now “owns” the employment and inflation situations that the Fed’s monetary policy helped create.  Biden gives a speech today on “the economy and lowering prices for the American people.”

Apple (APPL) closed up nearly 0.3% after an analyst report said the iPhone 13 supply chain data is improving into the holiday season.  Apple market caap is now $2.7 trillion.

Pfizer (PFE) closed up nearly 1% after the company published follow-up data for their vaccine in adolescents which showed impressive results.

Premarket earnings include BURL, BBY, DKS, DLTR, and AEO.  Post-market earnings include JWN, ADSK, HPQ, VMW, GPS, and DELL.

The economic calendar includes Flash Manufacturing and Services PMIs @ 9:45am ET and Richmond Fed Manufacturing Index @ 10:00am ET.

Volatility ticked up Monday in a normally sleepy shortened holiday week.   With lower participation, we could see some decent trading volatility today and tomorrow but don’t be surprised if volatility dries up.

No Size bias as Globex volume was active but mixed.


 Posted by at 7:40 am