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In this interview, Dave Floyd—founder of Aspen Trading and a 25+ year market veteran—breaks down how he evolved from Elliott Wave analysis to a more objective, rules-driven approach. He explains why he prefers price levels derived from measurable market behavior (volume, trade frequency, and time-based lookbacks) and how those levels guide him across instruments, from intraday S&P futures to swing trades in FX. You’ll hear a practitioner’s take on letting the market lead, not your forecast, so your decisions stay consistent when the heat is on.
What you’ll learn here is a simple, beginner-friendly blueprint for trading with objective levels: how Dave defines four lookback periods, why levels are timeframe-agnostic, and how to switch bias on a clean break-and-retest. We’ll also cover the habits that compound your edge—journaling every trade, specializing in a handful of instruments, and matching your timeframe to your personality—so you can build a strategy that’s durable, repeatable, and stress-resistant.
Dave Floyd Playbook & Strategy: How He Actually Trades
Objective, rules-first trading
Dave Floyd keeps opinions out and lets price do the talking. His edge comes from defining objective levels in advance, then executing the plan when price interacts with those levels. This section lays out how to think like Dave before, during, and after every trade.
- Make all key decisions at the planning stage, not on the fly.
- Define your valid entry, invalidation, and target before you click.
- Treat forecasts as noise; trade reactions at levels, not predictions.
- If a rule isn’t written down, it doesn’t exist—put it in your playbook.
The level framework (time-based lookbacks)
Dave’s core map is built from repeatable, time-based lookbacks that create objective levels—no fancy indicators required. You’ll build the same “grid” so every decision has context, whether you’re intraday or swing.
- Build four anchor levels from fixed lookbacks (e.g., 5, 20, 50, 100 sessions) for highs/lows and closes.
- Mark over/under lines (last session close and weekly open) to set immediate bias.
- Update the grid once per session; avoid tinkering mid-trade.
- Only trade at or from pre-marked levels; ignore the middle.
The setup: break–retest–go
Dave favors clean structure over complex pattern names. The bread-and-butter is a decisive break of an objective level, a controlled retest, and then continuation, with risk defined to the tick.
- Entry: After a decisive break of a key level, buy/sell the first orderly retest that holds.
- Invalidation: The Stop goes just beyond the level that should hold after the break.
- Confirmation: Lower timeframe must print diminishing counter-momentum into the retest (e.g., smaller candles, wicks).
- If the retest rips through your level, skip it; no second chances.
Trade location & bias switching
He’s quick to switch bias when the market proves him wrong, but only at the map’s boundaries. This keeps him aligned with the dominant flow without getting whipsawed by noise.
- Bias flips only when two conditions align: 1) a higher-timeframe level is broken and closed beyond, and 2) the retest holds.
- Avoid counter-trend trades unless they start at a higher-timeframe level with asymmetric R.
- If the price is between levels, do nothing—wait for the boundary.
- After a failed attempt at a level, reduce the size by half on the next try.
Risk sizing that survives heat
Longevity beats bravado. Dave sizes small enough to tolerate sequences and lets position sizing—not prediction—handle uncertainty.
- Risk 0.25%–0.75% per trade; cap total open risk at 1.5%.
- If two trades are triggered off the same parent level, treat them as one risk unit.
- Hard stop is mandatory; no moving stops away from invalidation.
- Daily loss limit: 2R max, then stop trading for the day.
Targets, scaling, and exits
Exits are defined by the map. Dave pays himself into opposing levels and leaves runners only when the tape is clean.
- First target at the next objective level (or 1R, whichever is nearer).
- Scale 50% at T1, move stop to breakeven minus costs.
- The trail remaining size behind the fresh structure that forms after the retest.
- If price stalls one full session below your next level, flatten.
Instrument focus & session selection
He narrows his universe so that pattern recognition compounds. You’ll do the same to reduce randomness and execution fatigue.
- Pick 2–4 instruments that trade clean around levels (e.g., S&P futures, major FX pairs).
- Trade the same session each day (e.g., cash open → first 120 minutes).
- Avoid low-liquidity hours; require a minimum average true range (ATR) per instrument for the session.
- If scheduled top-tier news coincides with your setup, wait 5–15 minutes post-release for spreads/volatility to normalize.
Multi-timeframe alignment
Dave anchors to higher timeframes to define structure, then executes on lower ones for precision. This section shows the exact handoff.
- HTF (daily/4H): Set the map—levels and directional context.
- Execution TF (15m/5m): Hunt the break–retest–go at the boundary.
- Trigger TF (1–3m): Refine the entry with tape/structural micro-shifts; no micro bias flips.
- If HTF and execution TF disagree, stand down until they sync.
Playbook filters (only the best A-setups)
Quality control is insurance. Dave uses simple, binary filters to keep only premium trades.
- Confluence rule: Need 2+ reasons at the level (e.g., weekly high + 50-lookback high).
- Structure rule: The impulse leg into the level must be impulsive; chop disqualifies.
- Risk rule: Minimum 1.8R to the next opposing level after fees.
- Time rule: If no trigger within 30–60 minutes of marking “ready,” cancel the idea.
Trade management in motion
Once you’re in, it’s all about executing the plan without improvisation. Dave’s approach keeps emotions boxed in.
- After entry, set stop/targets immediately; no “I’ll manage it live.”
- If adverse excursion hits 0.6R, either reduce by 1/3 or accept a full stop—predefine which.
- Add only on fresh retests that keep initial invalidation intact; do not widen risk.
- If the first add-on fails, remove the add-ons and manage the core to the original plan.
Journaling & review loop
His improvement engine is the review. You’ll capture what mattered and turn it into rules you can actually use.
- Log setup type, level, confluence, risk, execution TF, add-ons, outcome, emotion tag.
- Screenshot the break–retest–go sequence and annotate why it met filters.
- Weekly: tally R by setup, keep the top two, sideline the rest next week.
- Convert any repeated mistake into a new binary rule (e.g., “No trades within 10 minutes of cash open unless confluence = 3+”).
Personal fit: timeframe and psychology
Dave emphasizes matching the strategy to who you are. Your rules should work for your attention span, patience, and lifestyle.
- If you monitor constantly, use execution TF 5–15m; if not, push to 30–60m with fewer trades.
- Cap simultaneous positions to match cognitive load (e.g., 1–2 if intraday, 3–4 if swing).
- Pre-commit a daily schedule (prep, execution window, review) and don’t trade outside it.
- Use checklists pre-trade and scorecards post-trade to keep behavior consistent.
Example day plan (plug-and-play)
Here’s a simple flow you can adopt so the whole playbook becomes muscle memory.
- Pre-market (30–45 min): Update four lookback levels, mark bias, list A-setups only.
- Execution window (90–120 min): Take only break–retest–go at pre-marked levels; enforce risk rules.
- Midday: No new trades unless a higher-timeframe level is tested.
- Close (20–30 min): Journal, tag emotions, export screenshots, update stats by setup.
Risk Small With Defined Invalidation: Survive Sequences And Stay Consistent
Dave Floyd is relentless about controlling the downside before chasing the upside. He frames every trade around a tight invalidation point—where the idea is proven wrong—and sizes the position so a single loss barely dents the account. This simple pairing of small risk and clear invalidation turns losing streaks into manageable noise rather than existential threats. By accepting that sequences happen and budgeting for them, he keeps execution calm and repeatable when others panic.
In practice, Dave Floyd starts with risk per trade first, then backs into position size, never the other way around. He won’t move a stop further from invalidation to “give it room,” because that breaks the math and breeds hesitation on the next setup. When trades cascade, he holds his risk constant, respects his daily loss cap, and lets the stats do their job across a series, not a single outcome. The result is consistency: the edge shows up over dozens of trades because capital—and confidence—are still intact.
Let Price Lead: Objective Levels Over Opinions And Predictions
Dave Floyd builds his plan from price, not forecasts. He marks objective levels from fixed lookbacks and lets the market prove direction by breaking and holding above or below those lines. When price respects a level on the retest, he acts; when it doesn’t, he passes—no stories, no “I think.” This keeps Dave Floyd’s execution consistent across sessions and instruments, because the trigger is the same: level, break, retest, go.
He refuses to anticipate what a market “should” do and instead waits to see what it does. If momentum into a level is messy or the retest is sloppy, he stands down and preserves ammo. When the tape is clean, he defines the invalidation at the level and lets the trade work without interference. Over time, this habit compounds: fewer forced trades, clearer reads, and a strategy anchored to evidence rather than ego.
Volatility Sets The Bet: Adjust Size As Range Changes
Dave Floyd sizes positions by the market’s current range, not by gut feel. When the ATR or session range expands, he reduces the size so the same invalidation still risks a fixed fraction of equity. When volatility contracts, he allows slightly larger size because the stop distance is tighter. This keeps each trade’s risk constant in dollars while matching the market’s “speed limit.”
Practically, Dave Floyd measures the recent range on his execution timeframe and converts stop distance into shares or contracts before entry. If range doubles, size halves—no debate, just math. He avoids stacking multiple correlated trades when volatility spikes, treating them as one risk unit. The effect is smoother equity curves and fewer surprise drawdowns when markets suddenly accelerate.
Diversify By Instrument, Playbook, And Duration To Smooth Returns
Dave Floyd spreads risk across a small basket of clean instruments and a couple of repeatable playbooks. He avoids loading up on highly correlated names, so one headline or regime shift can’t torpedo the day. By mixing intraday trades with occasional swing holds, he lets different market rhythms contribute to P&L instead of relying on a single tempo.
In practice, Dave Floyd pairs a core “break–retest–go” setup with a secondary continuation or fade filter, but never runs five ideas at once. If the S&P futures and Nasdaq are moving as one, he treats them as a single exposure, not two. He staggers hold times—scalps at the open, a measured afternoon continuation, and a swing only at major levels—so edge isn’t concentrated in one window. The result is steadier returns: when one lane goes cold, another can keep the equity curve climbing.
Write The Rules, Follow The Process, Ignore Everything Else
Dave Floyd treats his playbook like a pilot’s checklist: clear, binary, and followed every single time. He writes rules for entries, invalidation, targets, and session windows so decisions are made before stress shows up. If a setup doesn’t meet the written criteria, he passes without debate. The structure keeps Dave Floyd from chasing, overtrading, or “making it up live” when the tape gets noisy.
Execution is just compliance: prepare levels, wait for the break–retest, place the order, manage risk exactly as scripted. He logs every trade against the rule it followed or broke, then patches leaks by adding or tightening rules the next day. News, opinions, and social feeds stay muted during execution windows so focus remains on the plan. Over time, this boring discipline becomes the edge—because the rules compound while distractions fade.
Dave Floyd’s core lesson is to let the market do the talking and codify your reactions in advance. He moved away from subjective forecasting toward objective, pre-marked levels and a simple break–retest–go trigger. Every trade is framed with a written plan: where the idea is valid, where it’s invalid, and what the next objective level implies for targets. Risk is kept small and constant, so losing sequences are survivable and the playbook remains executable under pressure.
He emphasizes trading only at meaningful boundaries, switching bias only after a true break and a clean retest, and standing down when price action gets sloppy. Position size flexes with the current range, so the dollar risk stays fixed while volatility breathes. He narrows his universe to a few clean instruments and staggers hold times—intraday at session edges, occasional swings at big levels—so no single regime controls the equity curve. Most importantly, Dave Floyd journals in near real time, turning observations into binary rules and tightening the playbook each week. The edge isn’t a prediction; it’s a disciplined process, repeated at levels that matter.
