Trader Development

Knowing how to analyze the market and the order flow is important and so is the learning process itself – going from being new at something to becoming proficient at it.

I’m not a big fan of trader psychology because my thoughts are that people look to psychology when their real problem is that they don’t know how to trade. Sometimes psychology gets the blame for what is actually lack of knowledge. Still, I think for many traders, they do have psychological issues to work out.

As well as the need to  iron out the ‘mental quirks’ some of you may have, there is an absolute need to understand the process of development that successful traders have gone through. This section of the site deals with those aspects of your development as a trader.

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I first came across Discovery Trading Group (DTG) when Anthony at S5 Trading recommended I chat with them. I then discovered a number of Jigsaw customers were using their service.

I’m used to seeing lofty claims on trading web sites and when I came to DTG site the first thing I read was that these guys also run a quant firm. That was a red light for me – I thought it sounded like something a company would put up to try to ‘wow’ people. In fact, this was the reason it took me 3 months to get round to contacting DTG. Funny thing is, it actually turns out to be true.

DTG  is quite unique in what they offer. They do have a detailed model for defining where to enter and exit the market but they are clear in disclaiming that its just one of many methods which can be a backbone for your own trading program. Of course their own method drives the discussions but they advocate that each traders own personality and psychology should drive the specifics of the method.

This could be summed up as “Get in at prices a lot of people are looking at, confirm with order flow. If you are right, you know you are trading in the right spot right away but if you are wrong, you will find out quickly”. Their basic method is flexible and can be approached as a higher win rate smaller reward advantaged scalping method or a more math advantaged lower win rate institutional “grinding” type approach. Still, it’s not advocating any one specific method that makes DTG unique.

DTG also issue their levels for the ES each morning before the market opens, though they encourage members to develop their own levels and apply their principles to whatever markets they choose. DTG members trade other markets besides the ES including treasuries and currencies.  Quite a few DTG customers sign up just for their ES levels and daily trade plan sheets, though this is a shame because it’s not just giving out levels that make them unique.

DTG also have a live room. This is not a “call trades” room but a “discuss the action” type room.  Everyone is encouraged to give their opinions and reasons. DTG would not run a “follow the leader” type room because DTG is all about teaching you to think for yourself and guiding your development as a trader.

Which brings us to what makes DTG unique.  It’s the trader development aspect of their offering. They absolutely expect you to drive this process yourself. You do that in the form of a trading journal on their forum. In return for you posting your trades, your performance and your thoughts, you will have REAL professional traders giving you advice on where you might be getting stuck along with reinforcement of what you are doing right and should refine and build on.

DTG won’t really care if you are using their method or another method in terms of how you define an entry point. They demonstrate that provided you focus on the things that really matter, almost any specific entry/exit approach can be modeled into a profitable method. Specifically, they continually focus on these core principles:

  • Trading with confidence – Second guessing keeps you out of the market. You MUST have risk on to make money.
  • Risk and Bankroll Management – the vast majority of what institutional traders build on. The RM model itself should be a BIG part of your edge.
  • Plan your Session and Follow your Plan – knowing the average number of trade events and total risk is critical to constructing the risk model.
  • Advantaged Reward to Risk – the single greatest edge free to all. Learn how to make money winning only half your trades first. Most pro programs have win rates in this range.
  • Trading IS Gambling – it’s not a dirty word and each trade absolutely is a game of chance. so manage your risk like any professional gambler does.
  • All markets are auctions – they are not textbook auction market theorists but focus only on price discovery and order flow within the auctions

Many companies offer you a ‘simple solution’ to trading. You know – pay them $5k and soon you’ll be sitting on the beach, just going indoors to trade at midday for 20 minutes before your daily back rub. What DTG offers is genuine help in making your OWN trading approach work for you. They are industry professionals and don’t make their living as trading educators. As such they have had to limit membership in the past as they can only handle giving the level of personal attention they do to so many at one time. DTG evolved as an experiment and is effectively just a portion of an internal “think tank” style approach to development and sharing of ideas they use in their own group opened up to a limited number of retail traders. They are adamant about requiring every member contributing and working the process to make it worthwhile for all.

Ultimately, DTG is a community venue for the continued personal development of traders rather than a site you join to grab a trading technique. The small fee (and it is really small) helps to weed out the people that aren’t really interested in trading as a skill but are looking for magic bullets. There’s now 4 years of historical trading levels along with details of how they performed. There’s also an archive of daily trade examples and obviously these are added to every day.

At just $149 a month, with the trading method, live room, daily levels and a number of excellent education videos DTG is an absolute steal.

Click here to visit Discovery Trading Group