Table of Contents
Dave Floyd—founder of Aspen Trading and a veteran futures/FX trader—sits down for a no-BS catch-up about how his process evolved and why it works in real markets. In this interview, Dave explains moving beyond subjective Elliott Wave drawings to a rules-first, objective method anchored to support/resistance bands that institutions actually react to. If you’ve ever wondered why some levels matter and others don’t, Dave’s take cuts through the noise and shows you how pros keep it simple and repeatable.
Here’s what you’ll get from Dave Floyd’s playbook: how to build price bands calculated from volume, trade frequency, and time; why “support is support until proven otherwise”; when to wait for the break-and-retest instead of chasing; and how to transpose daily levels onto intraday charts for clean entries. You’ll also learn Dave’s big edge—focusing on a small set of instruments (S&P futures, 10-year notes, a couple FX pairs) to master their rhythm—so you can ditch shiny-object hopping and trade with conviction.
Dave Floyd Playbook & Strategy: How He Actually Trades
What He Trades and When
Dave keeps a tight universe so he can truly know the rhythm. Expect high-liquidity futures and a couple of FX majors, traded during the most active sessions. Fewer markets, deeper familiarity—that’s the edge.
- Pick 2–4 instruments you’ll master (e.g., ES, NQ, ZN, EURUSD) and ignore the rest for 90 days.
- Trade only during your product’s top two volatility windows (e.g., cash open + first two hours; major data releases).
- If your market’s 5-day realized range falls below your minimum (define it), cut size by half or skip the day.
Daily Prep: Build Objective Levels
The backbone is clean, defensible support/resistance that institutions actually respect. Dave maps levels from higher timeframes, then “zooms in” for execution.
- Start on the daily: mark prior day high/low, weekly high/low, and any swing pivots with ≥3 touches.
- Require confluence: a level is “tradable” only if at least two signals align (e.g., prior day high + weekly pivot).
- Pre-label three bands: A (primary), B (secondary), C (stretch). Trade A first, B if A breaks, C only in trend days.
- If the first touch of an A-band produced a 1R move earlier today, don’t reuse it without fresh structure.
Setups: Break–Retest and Rejection
Dave favors simple patterns that repeat. You’re hunting either a clean break–retest or a decisive rejection at a pre-defined band.
- Break–Retest Long: Price closes above your A-band on the 5–15m, pulls back, and holds above it for one full bar; enter on the next bar’s break with a stop just below the band.
- Rejection Short: Price wicks through an A-band and closes back below it on the 5–15m; enter on the next lower high with a stop above the wick.
- No level, no trade: if price is mid-air (between bands), wait.
- Two tries max per band per direction; third attempt is a pass.
Entry Triggers and Order Tactics
Execution is rulesy, not “feel.” Your job is to turn a good area into a well-timed entry with minimal slippage.
- Use stop orders to enter with momentum on confirmation; avoid chasing after a two-bar burst.
- On a break–retest, require the retest bar’s range to be ≤ 70% of the prior impulse bar.
- If the spread widens beyond your product’s normal by 50% during the setup bar, skip the trade.
- Cancel unfilled orders after 15 minutes or if a fresh opposite signal prints.
Risk: Stops, Targets, and R
Dave defines risk at the level and measures everything in R. You earn by enforcing asymmetry, not by being “right.”
- Position size so that a full stop = 0.5R–1.0R of account risk per trade (pick one and stick to it).
- Initial stop: beyond the level by 0.8 × ATR(14, entry timeframe) or beyond the rejection wick—whichever is farther.
- First target at +1.0R; move stop to breakeven only after either +1.0R is printed or a higher-timeframe structure confirms (choose one rule and never mix).
- Hard daily loss limit: –2R (stop trading for the session). Hard daily max gain lock: after +3R, reduce new risk to 0.25R.
Position Sizing by Volatility
Volatility is the metronome. Size adapts to the day’s likely excursion, so small noise doesn’t stop you.
- Compute dollar risk per contract/lot using stop distance; scale contracts to match your fixed R risk.
- Cap total portfolio heat at 1.5R across all open positions.
- If VIX (or your product’s vol proxy) gaps up > 15% day-over-day, cut size by 30% for the first hour.
Trade Management: Let Winners Breathe
Once in, you manage the risk, not the outcome. Give the trade the room your plan assumed.
- No scaling in until the trade prints +0.75R; then add only if price returns to the original level and holds.
- Time stop: if after 30–45 minutes the trade hasn’t moved at least +0.5R, exit at market.
- Trail only on structure: shift stop to below the last confirmed higher low (long) or above the last lower high (short) on your execution timeframe.
News, Data, and Gaps
Catalysts move order flow. Respect them—or stand aside.
- Flatten 2 minutes before Tier-1 releases for your product (index opens, FOMC, NFP, CPI, central bank rates) unless you have a predefined catalyst play.
- The first minute after a major print is for observation only; no entries.
- For opening gaps, trade only in the direction of the first 5-minute close that holds above/below your A-band.
The Two-Chart Workflow
Keep screens minimal. One chart to define the “where,” one to trigger the “when.”
- Higher timeframe (H1/H4/D): draw and label A/B/C bands before the session; no indicators.
- Execution timeframe (5m/15m): price + ATR + session markers; nothing else.
- If you add anything new to a chart, remove something old—always net zero complexity.
Journal and Score the Process
Consistency beats brilliance. Score what you did, not what the market did.
- After each trade, log: setup type, band used, stop distance, R result, adherence (yes/no) on entry, stop, and management.
- Tag every trade A/B/C based on band quality; review weekly to see which tags actually pay.
- If two consecutive sessions score < 70% rule adherence, schedule a no-trade review day.
Weekly Review and Level Refresh
Markets evolve; your map must, too. Refresh levels and refine rules from real outcomes.
- On weekends, roll forward weekly A/B/C bands and delete stale ones that haven’t produced a reaction in 10 sessions.
- Identify the one setup with the highest expectancy from your journal and make it your priority for the coming week.
- Update your checklist; if a rule wasn’t used in 10 trades, either enforce it or remove it.
Mindset and Discipline Cues
Dave’s edge is objectivity. When emotions spike, fall back to the checklist and the clock.
- Pre-trade checklist must be read aloud; if it feels silly, good—you’ll actually do it.
- If you alter stop/target mid-trade for any reason other than a pre-defined rule, close the position immediately and log it.
- One-minute reset: stand up, step back, and re-ask, “Am I at a band? What’s the setup? Where’s the invalidation?” If you can’t answer in 10 seconds, don’t trade.
Build Your Personal Dave-Style Playbook
Make this your own with numbers you can execute. The goal is repeatability under pressure.
- Codify your exact A/B/C band definitions, your two allowed setups, your single entry trigger, and your stop/target schema—print it to one page.
- Back-fill 20 recent trades that match the rules; compute win rate and average R to set realistic weekly goals.
- Commit to a 30-trade sample before you change anything; evaluate, then adjust one variable at a time.
Build Objective Levels First, Then Trade Clean Break–Retest Setups
Dave Floyd keeps the game simple: map objective levels on higher timeframes, then let price prove it respects them. He defines tradable areas before the session, so there’s zero guesswork when volatility hits. If price isn’t at a pre-marked level, he does nothing—no chasing, no “maybe” trades. That discipline makes every decision binary: we’re either reacting to a confirmed level or we’re flat.
When a level breaks, Dave waits for the retest—no hero entries. Confirmation means a full candle holds the level and momentum resumes, not just a wick poke. Stops live beyond the level that invalidates the idea; targets are set by measured R, not hope. The result is a repeatable sequence: level → break → retest → continuation, with Dave Floyd letting structure—not predictions—do the heavy lifting.
Size Positions By ATR And Volatility; Cap Daily Loss In R
Dave Floyd sizes every trade from the stop outward, using ATR to convert chart distance into dollar risk. If the stop is 1.2× ATR(14) on the execution timeframe, position size shrinks so that a full stop equals a fixed R—never more. He doesn’t “round up” size for convenience; he rounds down to keep the same R across products and days. Volatility spikes? Size scales down automatically because the ATR expands, keeping Dave’s risk steady when markets speed up.
He also caps the session with a hard daily loss limit in R, so one rough morning can’t snowball into a tilt. Portfolio heat is controlled, too—Dave Floyd won’t stack correlated positions that push total open risk beyond a predefined R ceiling. After a strong start, he ratchets risk lower to protect the day’s gains and avoid the give-back. The math is boring by design, which is exactly why it works when emotions try to take the wheel.
Focus On A Few Markets; Master Their Rhythm And Sessions
Dave Floyd doesn’t chase every ticker; he narrows the field so pattern recognition compounds fast. By focusing on a small set of liquid contracts and FX majors, he learns their pace, typical pullback depth, and when the order flow reliably turns. That familiarity trims decision time and lowers error rates because the same behaviors repeat day after day. Instead of scanning endlessly, Dave shows up knowing exactly which instruments deserve attention and which sessions actually pay.
He aligns his trading around those instruments’ peak liquidity windows—the cash open, key data drops, and the first two hours when ranges expand. Outside those windows, Dave Floyd either reduces size or stands down to avoid grinding chop. With fewer markets and defined sessions, prep becomes sharper: levels are cleaner, scenarios are fewer, and execution is faster. The payoff is consistency—less noise, more high-quality reps, and a process that holds up when volatility shifts.
Let Winners Breathe; Trail Using Structure, Time Stops For Stagnation
Dave Floyd lets the trade do its job before he interferes. Once price moves away from the entry and confirms structure—higher lows for longs, lower highs for shorts—he trails beneath/above that last confirmed pivot, not the noise inside the bar. He avoids micromanaging every tick because tight trailing too early kills expectancy. If momentum is intact and structure holds, he gives the winner room to expand.
When progress stalls, he uses a time stop to cut dead weight. If a position can’t produce roughly half an R within a set window, Dave Floyd exits and frees capital for the next clean setup. He moves to breakeven only after a defined milestone (like +1R or a higher-timeframe confirmation) to avoid premature scratches. The net effect is simple: protect the downside with rules, and let upside develop without anxiety-driven tinkering.
Trade Mechanics Over Predictions; Define Invalidation And Stick To Rules
Dave Floyd doesn’t forecast; he executes. His edge lives in mechanics—predefined levels, a single trigger, fixed stops, and measured targets. Before the session starts, he writes down what would kill a trade idea, so there’s no debate once the price prints it. That invalidation sits in the market, not in his mood, which keeps him from “just giving it a little more room.”
When the setup appears, Dave follows the checklist and either takes it or passes—no halfway measures. If the stop is hit, he logs it and moves on without narrative therapy, because the rules already answered “why.” When rules conflict, the stricter rule wins, and when rules are missing, he doesn’t trade until they’re written. By prioritizing mechanics over predictions, Dave Floyd turns a messy tape into a series of simple, binary decisions that compound consistency over time.
Dave Floyd’s core message is refreshingly pragmatic: stop guessing and anchor your trading to objective levels that institutions actually care about. He moved away from subjective Elliott Wave work toward calculated support/resistance bands built from hard data, then reads the market’s tone around those levels to decide whether to fade or follow. He builds the map on the daily chart, transposes the bands to intraday for execution, and treats them as reaction zones—not crystal balls—so the job becomes identifying acceptance or rejection and acting with clean risk.
Execution-wise, Dave waits for the market to confirm: break the level, hold it, then enter on the modest pullback with a tight, location-based stop if acceptance fails. He frames everything in expectancy—keep losses small, stick with winners, and let structure do the heavy lifting—while focusing on a small universe of instruments like a pro desk trader to multiply high-quality reps. And when markets change character, he recommends screen time to learn the new rhythm rather than forcing old patterns—put in the time, overlay the approach, and let the feedback loop refine your edge.
