Patience, Focus and Discipline

Published on
January 21st, 2019
Duration
30 minutes

Patience, Focus and Discipline

In The Tank ·
Featuring Dave Floyd

Published on: January 21st, 2019 • Duration: 30 minutes

Dave Floyd of Aspen Trading Group likes to cut through the noise. His edge is in following a small range of inter-related instruments, becoming familiar with their individual traits and the price relationships within the group in order to make steady profits. Filmed on January 15, 2019 in Bend, Oregon. Think Tank is Real Vision’s premier written research service where you can get valuable insights from professional traders like Dave Floyd every week. Learn more at http://www.realvisiontt.com

Comments

  • JC
    Jessica C.
    1 August 2019 @ 02:26
    Very interesting and valuable conversation Dave. Learned a lot. Thank you for your time sharing your experience.
  • FG
    Flavio G.
    23 January 2019 @ 18:42
    How can you limit your exposure to any single idea to 1 - 1.5% if you only look to a very narrow set of asset classes?
    • DF
      Dave F. | Contributor
      26 January 2019 @ 18:21
      Risking 1% to 1.5% of a PORTFOLIO value.....technically you could do only 10 trades in a year and still have a very solid return on the overall portfolio. Sizing and risk management is all you need
  • PG
    Philippe G.
    24 January 2019 @ 14:12
    Excellent. More like this please!!
  • SC
    Stephan C.
    23 January 2019 @ 19:41
    Really great vid- Valuable insights on the fundamental pieces required to build a sound trading process and mapping out trade ideas. Lot to take away, thanks.
  • AC
    Andrew C.
    22 January 2019 @ 04:41
    Thanks Dave, fantastic discussion. I learn something every time you present. A couple of questions if I may. If I understood correctly, you use 1-2% position sizing. How many trades might you have on at one time (hence how much cash)? How do you manage correlation risk, not so much when correlations go to one, but for example, might you have different FX trades at one time where correlations are >= 0.5? Do you have an investment portfolio, longer term stock/bonds investment for retirement funds, for example? What portion might be in your trading account?
    • DF
      Dave F. | Contributor
      23 January 2019 @ 03:39
      Hi Andrew - thanks for the comment/question. 1% to 2% simply refers to my max dollar loss on a trade. So, if I have a portfolio of $1 million, and risk 1% on a trade, that is $10,000. Thus if you know your stop-loss you can size your trade to stay within that $10,000 risk limit. Make sense? Regarding my investment portfolios, I do keep exposure to the markets via basic ETF portfolios but I am not a buy and hold guy. Most of my portfolio gets an allocation to my trades which is where I feel I have an edge.
    • DS
      David S.
      23 January 2019 @ 18:29
      Dave F. - Thanks for clarifying. DLS
  • MM
    Michael M.
    21 January 2019 @ 14:07
    This is great, love this format.
    • DF
      Dave F. | Contributor
      23 January 2019 @ 03:42
      Thanks Michael
  • BM
    Beth M.
    21 January 2019 @ 20:36
    This was really valuable and provides "building blocks" to making a succussful trade. Thank you...more of these types of videos please.
    • DF
      Dave F. | Contributor
      23 January 2019 @ 03:41
      Thanks Beth
  • DS
    David S.
    21 January 2019 @ 22:05
    Excellent presentation. I often do not follow charting presentations because traders just show their concluding charts and the trade. Dave was great because he showed the whole process including an in-depth background understanding and all the information that leads up to the trade. I also liked his sizing of the trade which I learned from one of Peter Brandt’s presentations. Best of luck in the workshop! DLS
    • DR
      David R.
      21 January 2019 @ 22:48
      Good, thoughtful comment and feedback, fitting for a likewise video.
    • DF
      Dave F. | Contributor
      23 January 2019 @ 03:41
      Thanks David S.....working on my presentation this evening as a matter of fact
  • SS
    S S.
    21 January 2019 @ 23:03
    Thank you Dave. This was great. I do however personally disagree with having 1-2% stop losses as it doesn't provide much room for error and volatility. From what I have seen on many Trade Ideas episodes, most have 10% stop losses. But I guess it works for you.
    • DS
      David S.
      22 January 2019 @ 00:54
      Steve S. - I may be incorrect, but I took it as each position in your portfolio should be 1 to 2% of the total portfolio - not a stop loss a couple of percent below the trade. I also assume that if the trade starts to move it a positive direction they will jump in like Hugh Hendry. Maybe portfolio sizing and trade tactics will be discussed in the future. DLS
    • CP
      Constantin P.
      22 January 2019 @ 13:05
      its about capital - not a price sl level
    • SS
      S S.
      22 January 2019 @ 22:21
      @ Dave & Constantin. Ah that makes sense. My bad.
    • DF
      Dave F. | Contributor
      23 January 2019 @ 03:40
      Not a 1-2% stop-loss.....risking 'x'% of a portfolio - whatever that number happens to be for you. For me, it is 1-1.5%
  • AZ
    Angelo Z.
    22 January 2019 @ 03:33
    One of my favourite videos to date! Thanks Dave, and thanks Real Vision!
    • DF
      Dave F. | Contributor
      23 January 2019 @ 03:39
      Thanks Angelo
  • RL
    Rui L.
    22 January 2019 @ 13:57
    Tried to filter me some bullets... just sharing. Tks Dave, tks RV. - My unique trading approach and style is keeping a very narrow focus. ... impossible to keep track of a lot of different asset classes and then be really relevant with key price levels. - ... critical that I only look at four or five currency pairs and then three or four major asset classes. They're all connected. They all play off of one another. And if I just focus on those, I'll begin to get an insight on what's happening in the market as opposed to jumping around as to whatever the hot thing is on any particular day. - (on lessons from worst trade) I stepped outside my area of expertise. I had an edge trading IBM on an intraday basis ... I had no business trying to pontificate what the market was going to do with IBM's earnings. The market taught me a valuable lesson, and it's something that has stuck with me for a very long time ... - You cut your losses and move. ... stick to something where I had a clear edge if I repeated that process over and over again. ... stay really focused and disciplined on what I was really good at. - ... my style is not something where I'm trying to play for a big move up or a big move down. I'm trying to forecast out a few weeks and catch a little bit of that meat in the middle on that move. - ... if I can get a 1 and 1/2 times to what I'm risking maybe two, I'm delighted. But I think the key thing, rather than looking for the big trade, is what do I do on a day to day, hour to hour basis, week to week basis that keeps me really focused, keeps me within edge, and that's about, quite frankly, sticking with my discipline, sticking with the trade management, sizing my trades correctly so that, if I do have a series of losers in a row, it doesn't impact me in a way where I can't continue to trade. - PATIENCE, FOCUS AND DISCIPLINE - ... It probably goes without saying, but trading is not one of those things where you just kind of show up and look at your screens and see what's going on and throw a few trades out there and walk away. - ... discipline to get up and practice your craft over and over and over again is definitely the hallmark of success. - They're kind of tied. Discipline and patience are kind of tied together. - ... There's this desire to be entertained or have skin in the game at all times. We have to remember that the markets aren't there to entertain us and to dole out trades to us every day. We're there to take what the market gives us. - And I think for a lot of people, they think that, if the market's open, that there's got to be something going on. And yes, there probably is something going on. But it's like you jumping into the mix with people that are far more knowledgeable about that particular market. So you can go over there and say, there's a lot of flashing lights and a lot of bells and whistles over there right now. But there's a lot of guys and gals over there that know far more about that market, how it's been trading. You are at a severe disadvantage. So it's better just to stick, wait for the setups, and go from there. - you make 80% of your money 20% of the time. - ... I need a paycheck. I got get paid today. I didn't make any money this week. It doesn't work that way. It's one of those things where your income stream is very lumpy. So you've got to be patient. You've got to be disciplined. - ... you've got to be incredibly focused. And again, they're all kind of tied together in some way. But the focus really boils down to knowing which securities you're going to be trading, sticking with them, and more importantly, knowing which related asset classes impact those securities so that you can manage them or monitor those as well to gain an edge. - ... What is the single most important attribute of a successful trader? Patience. I think it has to be patience. You have to control your impulses. We're all human beings. We're going to slip from time to time. But if you're too impulsive, this is not the place for you. It will eat you alive over time. - ... If you're a really good trader, you might be at a 60-40 win loss ratio. Or maybe you're a 40% winner, 60% loser. But we know we're going to have five or six trades that are going to be losers in a row. It's inevitable. Statistically, it will happen. - That's the key thing. You've got to keep yourself in the game, and you can't dig yourself a hole too big that is mathematically hard to get out of and psychologically too hard to get out of. - ... filtering out the noise. And I think that's not only in terms of trading, but what's happening currently in our society. We are so bombarded with information. ... It's so easy to be never firmly rooted in what you're trying to do. - ... I stick to what I do, which is exactly how I approach each day, and I stick to the main asset classes that I focus on -- S&Ps, 10 year notes, gold, oil, and then a handful of currency pairs, and the occasional stock that will be impacted by all those asset classes-- then you have a real good edge of finding some really solid trades out there ...
  • JH
    Johannes H.
    22 January 2019 @ 09:56
    Really great video, much better than those big macro interviews like "is the housing in a bubble". This is the parts that are really important, not wishful thinking about some series of events mainstream media likes to write about
  • DW
    Daniel W.
    22 January 2019 @ 00:13
    speak the Q. out loud rather than just ring it and flash on the screen. those who are just listening and not watching have no idea what he is responding to. this kind of vid and in fact most of the vids you post are best to listen to while doing sth else.

Mark Yusko

Morgan Creek Capital Management, Co- Founder, CEO, & CIO

Mark Yuskois the Founder, CEO and Chief Investment Officer of Morgan Creek Capital Management. He is also the Managing Partner of Morgan Creek Digital Assets. Morgan Creek Capital Management was founded in 2004 and currently manages close to $2 billion in discretionary and non-discretionary assets. Prior to founding Morgan Creek, Mr. Yusko was CIO and Founder of UNC Management Company (UNCMC), the Endowment investment office for the University of North Carolina at Chapel Hill. Before that, he was Senior Investment Director for the University of Notre Dame Investment Office.Mr. Yusko has been at the forefront of institutional investing throughout his career. An early investor in alternative asset classes at Notre Dame, he brought the Endowment Model of investing to UNC, which contributed to significant performance gains for the Endowment. The Endowment Model is the cornerstone philosophy of Morgan Creek, as is the mandate to Invest in Innovation. Mr. Yusko is again at the forefront of investing through Morgan Creek Digital Assets, which was formed in 2018. Morgan Creek Digital is an early stage investor in blockchain technology, digital currency and digital assets through the firm’s Venture Capital and Digital Asset Index Fund.Mr. Yusko received a BA with Honors from the University of Notre Dame and an MBA in Accounting and Finance from the University of Chicago.

Anthony Scaramucci

SkyBridge Capital, Founder & Co-Managing Partner

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Michael Saylor

MicroStrategy, Co-Founder

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James Putra

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