Top Traders Unplugged

OI19: The Trader Who Never Spoke...Until Now ft. David Druz

57 snips
Oct 29, 2025
Guest
Dave Druz
In this intriguing conversation, Dave Druz, a veteran commodity trader and Ed Seykota's first apprentice, breaks his decades-long silence. He shares his unique approach to trading, emphasizing the importance of portfolio construction over following trends. Druz discusses trading against commercial hedgers, explains the psychology behind coping with volatility, and the practice of precise position sizing. He also reflects on his choice to run a small, investor-focused firm and the reasons behind its recent closure, offering valuable insights for traders and investors alike.
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INSIGHT

Three Pillars: Timing, Money, Portfolio

  • Trading systems require three distinct components: timing, money management, and portfolio selection.
  • Timing and money management are separate problems and must both be optimized within the whole system.
ADVICE

Size Positions By Volatility

  • Size positions relative to market volatility so stops balance randomness vs meaningful moves.
  • Give markets enough room but avoid excessive exposure by using volatility‑based sizing.
INSIGHT

Accept Volatility As The Price Of Edge

  • Capturing hedger premia produces a volatile equity stream; drawdowns are expected, not failures.
  • Systematic rules and psychological preparedness let you 'stand up' repeatedly until large payoffs occur.
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