Lance Breitstein’s Simple Setup That Made Millions

Craig Celeste
Craig Celeste

Lance Breitstein started his career in 2011 at Trillium Trading working with some of the best day traders on the street. While reflecting during post-analysis, Lance realized that even though he had some incredible gains, he would also have big losses. In an effort to avoid the big losses, Lance discovered that his best trades immediately went in his favor while his biggest losses occurred when his trades were fighting against the trend.

This blog uncovers how Lance defined his personal trading style with specific examples of how he defines trading with the trend.

Live, Breathe, And Trade With The Trend

During his own personal trading journey, Lance discovered his best trades occurred when momentum was on his side while his worst trades happened when he was trading against the general price trend.

Lance attributes Jessee Livermore’s quote, “The trend is your friend,” when he developed his personal trading style.

Trading with the trend:

  • Increases Win Rates
  • Increases The Reward
  • Minimizes The Drawdowns

Following the trend opens the positive asymmetric skew while also providing feedback that the trade is working in your favor.

Defining The Trend

Take the time to define what the trend means to you and what the implications are to your trading.

  • Trending Stocks: Move in a generally upward or downward direction encountering new prices.
  • Rangebound or Consolidating: Stay within a band of past prices.

Keep things simple and look at the slope, or angle, of the price action. When the direction of the price is sloping upwards it is generally in an uptrend, and the opposite is true for the downtrend. In contrast, rangebound stocks bounce back and forth between previous support and resistance areas.

Waiting for the true break out of a range and trend to develop will allow traders to avoid small paper-cut losses when trading in a rangebound price structure.

Trend Examples

An uptrend can generally be defined as anything moving higher with an upward slope, but it can be much more nuanced than that. Analyze the price action as it progresses over time.

As you begin to identify the higher time frame trend, the shorter time frames can naturally demonstrate counter-trend movements. Apply all these methods to your unique trading style that fits within your personal time frame.

Every chart pattern or trend is fractal by nature. Regardless of your trading style, these examples can be applied to any timeframe.

Higher Highs and Higher Lows

image 68

Symbol: NVDA
Date:
2023
Timeframe: Daily

Holding Above VWAP

image 69

Symbol: TSLA
Date:
2020
Timeframe: Daily

Holding Above Moving Averages

image 67

Symbol: APP
Date:
2023
Timeframe: Weekly

Holding Prior Bar Highs or Lows

image 66

Symbol: ELF
Date:
3/4/24
Timeframe: 3 Minute

Holding A Trendline

image 64

Symbol: AVGO
Date:
6/28/24
Timeframe: 1 Minute

Counter-Trend (Capitulation)

image 63

Symbol: COIN
Date:
3/19/24
Timeframe: 5 Minute

Multiple Time Frames

Lance states, “The more people you get on your side the better.”

The strongest market trends occur when multiple time frames align.

Breakouts are more powerful when multiple trading styles converge. A surge of buying occurs when position, swing, and day traders all enter at the same price level.

Considering the higher time frame when analyzing the lower time frame will ensure your trade is aligned with the overall trend.

Defined Trends Systemize Your Rules

Once you have a clear definition of the trend, create a rule set you must follow.

  • “I will never be long if the stock is steadily holding below VWAP, and I will never be short the stock steadily holding above VWAP, unless it capitulates.”
  • “I will size 25% bigger when the intraday and daily trends are aligning.”
  • “I will not take trades in rangebound or consolidating stocks.”

When avoiding consolidation patterns, begin to ask yourself: When do trends start?

  • Breaking News or a Fundamental Catalyst
  • Breaking Out of Consolidation Ranges Into New Highs
  • After The Exhaustion or Capitulation of Other Trends

Once you are in the trade and are looking for an exit, ask yourself: When do trends end?

  • Huge Volume and Price Exhaustion or Capitulation
  • After Multiple Large Moves
  • Breaking News or Fundamental Catalyst Counter to the Trend

Continue Studying The Trend

Throughout any trading journey, Lance emphasizes the importance of post-analysis to better optimize how trend trading strategies can improve results. He suggests documenting charts and write-ups to dissect how your biggest winners and losers occurred.

Lance Breitstein’s experience offers valuable lessons in trend trading. He highlights trade preparation, risk management, position sizing, and dives into specific entry strategies. Lance’s performance exemplifies how anyone can level up their performance with the power of trading with the trend

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