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In this interview, veteran futures trader Dave Floyd of Aspen Trading sits down to talk shop—why he manages client accounts the same way he trades his own, and how decades in the S&P futures have honed his process. You’ll hear how he tightened decision-making under the spotlight of managed money, the role of performance metrics beyond simple P&L, and why an absolute-return, low-drawdown mandate keeps him honest. Most importantly, Dave explains his shift from subjective forecasts to an objective, market-led read using price, volume, time, and trade frequency to map support and resistance that actually matter.
Read on to learn the core of Dave Floyd’s strategy: filtering only A+ setups, reacting to changing conditions instead of forcing first targets, and managing trades with the same checklist that justified entry in the first place. We’ll unpack his intraday playbook—how VIX, option flow, and order-flow context guide entries and exits; how journaling and metrics cement conviction; and how to stay flexible when a “grind up” market squeezes ATR. If you’re a newer trader, this is a practical blueprint for avoiding B-grade trades, cutting losers early, and letting winners breathe without giving back the month.
Dave Floyd Playbook & Strategy: How He Actually Trades
Core Philosophy: Trade What the Market Proves, Not What You Predict
Dave keeps it simple: let price action do the talking, then respond with a tight process. He focuses on A+ setups only and measures success by consistency and drawdown control, not by calling tops or bottoms. Here’s how he turns that mindset into daily, repeatable behavior.
- Only take trades when a clear level is defined by recent price interaction (multiple touches or rejections in the past 3–10 sessions).
- Require confluence: level + structure (higher high/lower low) + intraday trigger (break/retest or failure test).
- If a setup is “good but not great,” pass—label it B-grade and skip it.
- Predefine the maximum daily loss and stop trading the moment it’s hit.
- Keep targets flexible: start with a plan, but adjust to live tape and volatility rather than forcing a fixed first target.
Market Regime & Context: Know the Environment Before You Click
Before hunting entries, Dave identifies regime—trend, range, or grind—with a quick volatility and structure scan. This sets expectations for how far trades can run and whether to fade or follow.
- Define trend regime if the prior 2–3 sessions made successive HH/HL (uptrend) or LL/LH (downtrend); otherwise, treat as range.
- If ATR is contracting day-over-day and VIX is subdued, expect “grind” behavior: use smaller targets and quicker profit locks.
- In ranges, fade edges only after false-break evidence (wick rejection/failed auction) with tight stops beyond the extreme.
- In trends, only trade pullbacks to broken levels/AVWAP/VWAP bands; avoid countertrend unless an exhaustion signal forms.
- Size down by 25–50% when the regime is unclear or volatility collapses.
A+ Setup Qualification: Filter Hard So Execution Is Easy
Dave’s edge is selective aggression. He eliminates noise by demanding confluence and structure, so his execution feels obvious when the moment arrives.
- The level must be “active”: tested at least twice recently and aligned with a session pivot or prior day high/low.
- Look for time-of-day alignment: prefer the first 90 minutes and final hour when liquidity/tape clarity is higher.
- Add a micro-structure tell: bull flag at support in uptrends, bear flag at resistance in downtrends, or a failed breakout/breakdown in ranges.
- If two of three ingredients (level, structure, trigger) are missing, do not improvise—skip.
- Log every skipped B-setup with a one-line reason; if it later wins, tag it “win without me” and move on.
Entry Triggers: Simple Patterns, Tight Risk
Entries are binary and rules-based: break-and-retest or failure test, confirmed by clean candle structure and tape behavior. This keeps risk defined and repeatable.
- Break-and-retest long: break above resistance, wait for a pullback that holds above the level, enter on the first strong up candle close.
- Failure test short: push above a known high that immediately fails back inside the range; enter on the next lower high/weak close.
- If the trigger candle’s range is larger than 1.25× recent average, halve the size or skip—risk ballooned.
- Enter at the level or better; never chase more than 0.25× ATR from the intended entry zone.
- If price stalls for three bars after entry without progress, reduce risk by moving the stop to just beyond the most recent micro swing.
Risk Management: First, Protect the Downside
Risk comes first, targets second. Dave caps damage at the trade and day level so he can survive cold streaks and fully press hot ones.
- Risk 0.25–0.75% of account per trade, depending on regime; never exceed 1%.
- Initial stop goes just beyond the invalidation level (not an arbitrary round number).
- Daily loss limit: 2R or 1.5% of equity, whichever hits first; stop trading for the day when hit.
- Weekly drawdown circuit breaker: at −4R on the week, size down by 50% until back to breakeven.
- If the first two trades are losers, take a mandatory 30-minute break before reassessing.
Trade Management: Let Winners Breathe, But Don’t Give Back the Month
He scales out into strength and trails behind structure, always referencing the same reasons that justified the entry. Consistency beats hero targets.
- Take 1/3 off at +1R if tape is choppy; hold full size in strong trend days until +1.5–2R.
- Trail stops under/over the last confirmed swing; only advance the stop after a new swing forms.
- If price hits +2R and stalls for three bars, lock at +1R on the remainder to protect the day.
- On range days, prioritize mean reversion: exit near opposing band/level rather than fishing for breakouts.
- Never widen a stop; adjust smaller or exit if you misread the structure.
Position Sizing & Scaling: Earn the Right to Add
Adds are earned by the market confirming your premise, never to “fix” a bad entry. Scaling is mechanical and capped.
- Initial size = base risk; add only after price moves +0.75–1R and forms a fresh continuation pattern.
- Each add is 50–70% of the initial size and carries its own stop under the new structure.
- Absolute cap of two adds per trade; if no clean continuation forms, do not add.
- If an add is stopped out, reevaluate: either revert to core position or fully exit if the structure is broken.
- Reduce size automatically on low-liquidity sessions or ahead of major scheduled risk events.
Tools & Levels: Price First, Indicators Second
Dave prioritizes price, levels, and execution windows. Indicators are supportive, not predictive.
- Anchor VWAPs from session open and major swing pivots; treat AVWAP crimps/rolls as context, not signals.
- Map prior day high/low, overnight high/low, and opening range; these are your first decision zones.
- Keep charts clean: price, volume, VWAP/AVWAP, and ATR window; hide everything else during execution hours.
- Prebuild alerts 5–10 ticks/pips before key levels so you’re ready—no hunting when it’s time to act.
- Use one execution timeframe (e.g., 1–5m) for triggers, one higher timeframe (e.g., 15–60m) for structure. No more.
Playbook Routine: Prep, Execute, Review
The routine makes the results. Dave preps before the bell, executes during, and reviews after—every day, same rhythm.
- Pre-market (20–30 min): mark levels, define regime, write one sentence for “what would confirm trend” and “what would confirm range.”
- During session: only hunt preplanned zones; if price is between zones, stay flat.
- Post-market (10–15 min): screenshot best level interaction (win or miss), annotate why it worked/didn’t.
- Weekly: tag top three A+ setups and one “trap” you fell for; create a one-line rule to avoid that trap next week.
- Monthly: update your statistics—win rate, average R, drawdown depth, time-in-trade—and cut one behavior that costs the most R.
Journal & Metrics: Make Feedback Unavoidable
Dave’s journal is short, structured, and obsessed with cause-and-effect. Metrics guide which setups to press and which to cut.
- Log each trade with five fields: setup label, entry reason (one line), risk (R), result (R), and lesson (one line).
- Track per-setup stats monthly; if a setup underperforms for two months, either refine its trigger or shelve it.
- Maintain “A+ checklist” and require 100% compliance before entry; anything less is an auto-pass.
- Record emotional state pre-trade (1–5) and compare to outcomes; if emotion >3 correlates with losses, enforce a cooldown rule.
- Review max adverse excursion (MAE) to refine stop placement around actual invalidation, not fear.
Psychology & Discipline: Systems Beat Willpower
Discipline is engineered, not wished into existence. Dave builds friction against his worst impulses and makes the right action the easy action.
- Hard-code platform rules: daily loss limit, max trades (e.g., 5), and no entry outside preplanned zones.
- Use a physical checklist before entry; if any box is blank, the trade is forbidden.
- When you feel FOMO, write a 10-second note: “If this moves without me, I still have a plan at X.” Then stick to it.
- After two losing trades, switch to observation-only mode for 30 minutes; regain objectivity before resuming.
- End every session with one improvement commitment for tomorrow—and put it on your monitor.
Size Like a Pro: Volatility-Adjusted Risk That Protects Capital
Dave Floyd sizes positions to the market, not his mood. He keeps risk per trade inside a tight band and lets ATR or recent range dictate how many contracts he can responsibly hold. When volatility expands, his size contracts; when volatility compresses, his size expands—always with a hard cap. A daily loss limit cuts the engine before damage compounds, so one bad session never becomes a bad week.
He never averages down losers or doubles size to “get back,” because correlation and variance don’t care about feelings. Adds are earned only after price moves in his favor and structure reconfirms the thesis. After a drawdown, Dave Floyd auto-scales risk down until metrics recover, then steps back up in measured increments. The result is simple: consistent R per trade, predictable equity curves, and zero blown accounts.
Trade Price Action, Not Your Bias: Mechanics Over Predictions
Dave Floyd builds trades around what price proves in real time, not what he hopes will happen next. He waits for the market to confirm direction with structure—break, retest, continuation—before risking a dime. If levels don’t hold or triggers don’t print, he stays flat and protects his edge by doing nothing.
His checklist is mechanical: define the level, see the trigger, confirm the risk, then execute or skip. Targets are adaptive to volatility and tape strength, not fixed fantasies. When conditions change mid-trade, Dave Floyd updates the plan—tightens stops in chop, lets runners breathe in trend. Bias never overrides the signal; the mechanics decide.
Diversify Smart: Mix Underlyings, Strategies, and Timeframes to Smooth P&L
Dave Floyd doesn’t rely on one market or one setup to carry the month. He spreads risk across uncorrelated underlyings—index futures, select FX pairs, and a liquid commodity or two—so one theme can’t wreck the book. Within each, he rotates between complementary strategies: trend pullbacks when momentum is clean, mean reversion at well-defined range edges, and breakout/failure plays only when volatility supports the move.
Time diversification is part of the edge for Dave Floyd: he blends intraday executions with swing holds when structure and risk allow, but never forces a trade to become an “investment.” When one bucket underperforms, he throttles the size there and shifts risk to the buckets that are actually paying. The result is a smoother equity curve, fewer emotional whipsaws, and more consistent R-multiples regardless of the week’s narrative.
Define Risk First: Clear Invalidations, Hard Stops, and No Averaging Losers
Dave Floyd starts every idea by drawing the line that proves him wrong. He places the initial stop just beyond that invalidation—not at a round number, not “where it feels safe.” Position size is calculated off that distance, so the dollar risk per trade stays constant. If the setup morphs or the level fails, he’s out without negotiation.
He never averages into a loser to “improve” price because broken structure is a message, not an invitation. Partial profits come only after the market pays at least 1R and stops ratcheting to a new structure, not to break even out of fear. If two losses land back-to-back, Dave Floyd enforces a cooldown before the next decision. Protecting capital is rule one; chasing redemption isn’t a rule at all.
A+ Setup Filter: Objective Rules, Fewer Trades, Better Discipline
Dave Floyd treats selectivity as a superpower—most ideas don’t qualify, and that’s the edge. He grades every potential trade against an objective checklist: proven level, aligned structure, clean trigger, and acceptable volatility. If any box is blank, he passes without debate. This keeps him fresh for the moments that actually pay.
The filter also dictates timing and context, so he isn’t forcing entries between zones. Dave Floyd prefers the opening drive and the close when liquidity clarifies intent, and he wants the trigger to be clean—break-and-retest or failure test, not a messy chop. By taking fewer, higher-quality shots, he raises average R per trade and slashes emotional churn. The habit compounds: better patience leads to better trades, which reinforces the patience.
Dave Floyd’s core message is to trade what the market proves—not what you predict—and to protect capital with ruthless process. He rejects the obsession with “first targets,” opting instead to respond to live conditions: if momentum fades and structure deteriorates, book the win and move on rather than hoping the next five minutes bail you out. Running outside capital forced him to tighten selection further—filtering setups, cutting the B-grade ideas, and ensuring that what he does in the fund mirrors what a disciplined retail trader must do day-to-day. His execution window lives mostly in the intraday S&P futures, with trades measured in minutes to hours and a strong bias to finish flat—so feedback is immediate, and risk drifts aren’t tolerated.
Mechanically, Dave trades an objective, level-driven read: identify where orders are likely to hold, wait for conditions to confirm, take the trade, and bail the moment that thesis erodes. He manages the position by watching the same components that justified entry—if they still flash green/red, he stays; if not, he exits, accepting that small “squiggles” are normal noise in a healthy trend. In practice, that means clear invalidation, tight stops relative to structure, and zero averaging into losers—just a repeatable loop of selection, confirmation, execution, and accountability that compounds consistency over time.
