How to Build an Investment Thesis

Published on
September 19th, 2019
14 minutes

How to Build an Investment Thesis

Technical Trader ·
Featuring Dave Floyd

Published on: September 19th, 2019 • Duration: 14 minutes

Dave Floyd of Aspen Trading Group is known for his expertise in technical analysis, but in this episode, Floyd explains why technicals alone aren't enough to build an airtight investment thesis. He highlights the other factors he uses in combination with technical analysis, and breaks down what these indicators are saying for bonds, currencies, and equities. Filmed on September 18, 2019 in Bend, Oregon.



  • DF
    Dave F. | Contributor
    25 September 2019 @ 12:47
    USO at time of MY entry - $12.90 - at time of video recording, $12.45'ish....last $11.74 Hard to refute data points as noted in the video - 'bottoming out' is not an objective metric and really hard to time. Current rally in 10-year notes allows for one to add or establish shorts - my thesis has not changed.
  • DW
    David W.
    21 September 2019 @ 01:43
    Really helpful, thanks Dave.
    • DF
      Dave F. | Contributor
      22 September 2019 @ 03:19
      My pleasure David
  • GG
    Gary G.
    21 September 2019 @ 22:56
    Disagree with oil but agree with rest of the thesis. Long 10y but short oil?? I highly doubt that. And XLE is bottoming out!!!
    • DF
      Dave F. | Contributor
      22 September 2019 @ 03:19
      Hi Gary - you might disagree....and maybe you will be right. But what is your rationale?But historically intra-day price spikes in oil of +10% result in lower prices going forward. I am not long notes, I noted I was shorting....for my 2nd trade to the short side....first one was from 132'00
  • av
    aramis v.
    21 September 2019 @ 15:18
    Is it my internet or Real Vision has to do something with its content delivery network?
  • JH
    Jesse H.
    20 September 2019 @ 13:30
    Always interesting to listen to Dave, but this doesn’t seem to be what I would think of as a coherent investment process. Need a dynamic yet rules-based investing platform.
    • DF
      Dave F. | Contributor
      20 September 2019 @ 13:43
      Hi Jese - not sure I agree with you. Having a list of macro/fundamental and quantitative data points to underscore a theme PLUS a technical backdrop to aid in the execution of the trade seems pretty clear and robust to me. Those are the RULES....for my approach. Remember, trading is more art than science. A rigid set of linear rules will only take you so far.
  • JH
    Justin H.
    20 September 2019 @ 11:51
    Dave, where are you placing stops on the 10y T?
  • JC
    Joel C.
    20 September 2019 @ 02:08
    great summary, nice and concise. no messing around. thanks Dave
    • DF
      Dave F. | Contributor
      20 September 2019 @ 02:28
      Thanks, Joel - typically the more one says, the less they might know about the situation.
  • PT
    Pradeep T.
    19 September 2019 @ 23:59
    Dave, thanks for sharing your inputs. Given a lot of negative fundamental news around (fed managed repo rates/deficit/the dollar milkshake theory/ the case for gold etc,), your insights offer a refreshing way to look at the markets. How do you use fundamentals along with technicals? Also, curious, what platform do you trade with? Do you draw Elliott waves all by yourself or do you let your platform do the number crunching? ESignal folks claim that their Gann/Elliott package performs simulations before it suggests waves and potential targets. Curious what's your take on it. thanks.
    • DF
      Dave F. | Contributor
      20 September 2019 @ 02:27
      Hi Pradeep - I do my EW manually via MotiveWave software - makes it really easy to label and updates wave counts as the market unfolds. MotiveWave software: Auto wave labeling? Never seen one that works across multiple time frames.
  • TR
    Travis R.
    19 September 2019 @ 21:58
    Thank you for walking us through your trading framework. It is always good to learn new ways of viewing the market.
    • DF
      Dave F. | Contributor
      19 September 2019 @ 22:22
      Glad it was helpful Travis.....
  • TH
    Tim H.
    19 September 2019 @ 18:46
    For someone who is new to the market or has been away from the market for a period of time, what would be the best way to start getting into the context and generating high quality ideas? Should they start with news headlines? Macro economic data? Price action scanners?
    • DF
      Dave F. | Contributor
      19 September 2019 @ 21:09
      Hi Tim....appreciate the question. I think I would address your question the same way I did in the is more of an immersive approach.....technicals, (not doing scans for pattern), focusing on a handful of securities to trade, fundamentals and quantitative analysis. Ideally you follow along with someone who emulates a style you like and learn that way as well....let them show you the roadmap and how the day to day analysis looks. No....not a trading educator, let's be honest that is where the used car salesman flog their wares.