The Simple Setup That Made Lance Breitstein Millions $$$

More Than Just Friends: A Trend Love Story

Nov 15, 2023

Hi all!

These are my notes of a video produced by The TraderLion Podcast on YouTube: YouTube Link.

I am not affiliate with them or receive any compensation. The sole purpose of this article is to learn from the best. I hope you enjoy.

What We’re Going to Cover!

Why you need to live and breathe and trade with the trend.
How to define trends.
How to build trading rules around them.
What causes trends to begin or end.
Practical applications of how to use this knowledge and implement it into YOUR trading.

A Principle Verified Through Experience —> “The Trend Is Your Friend” - Jesse Livermore

Many cliches in trading are nonsense, but no cliche held up strong than “The Trend Is Your Friend.”
Lance Breitstein, “On my best trades, my best trades immediately went in my favor and my absolute worst trades and biggest losses, those were all trades where I was fighting the trend. They essentially never ever went in my favor.”
Lance’s study of trends transformed his trading and helped him become #1 8-figure trader at Trillium. This is why this is nothing short of a love story.

Why Live With the Trend?

Best trades go in favor because recognizing the opportunity just ahead of the rest of the rest of the market.
Trading with the trend increases win rates.
Trading with the trend increases the reward.
Trading with the trend minimizes the drawdowns and heat you need to take on a position.
Most trades can be structured properly to be with the trend.

Starting from Scratch

What even is a trend? How do we define it? How many of you have taking the time to define what a trend means to you and what the implications are to your trading?
Keeping it simple:
- Trending stocks are moving in a generally upward or downward direction encountering new prices.
- This is in contrast to RANGEBOUND or CONSOLIDATING stocks which are staying within a band of past prices.

Defining Trends Further

Anything generally moving higher or having an upward slope I’d consider to be trending higher but we can then define more nuanced subsets within that.
Each of these are applicable to all timeframes:
- Making higher highs and higher lows OR lower lows and lower highs.
- Holding above (below) VWAP.
- Holding above (below) a moving average.
- Holding above (below) prior bar highs (lows).
- Holding above (below) trendline.
- Holding above (below) a reference price
  - Reference price = unaffected price prior to breaking news or key catalysts being released.

Trending on Multiple Timeframes

The more timeframes aligned, the better.

Going with the Counter-Trend IS STILL WITH THE TREND

If higher timeframe is trending higher (lower), then trading with a lower timeframe counter trend lower (higher) IS STILL WITH THE TREND.
It is essential to wait for the countertrend during mean reversion trading.

Challenge 1:

Make a list of all the ways you define a trend. Document it with charts and ticker write-ups. (The more detail, the better it is going to be).

Defining the Trend Allows Rules & Systems

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

Challenge 2:

Make a list of rules to follow based on whether a stock is trending or rangebound. Document it with charts and ticker write-ups.

When Do Trends Tend to Start?

Breaking News or a Fundamental Catalyst
Breaking Out of Consolidation or Ranges
Following the Exhaustion or Capitulation of Other Trends.

When Do Trends Tend to End?

Huge volume and price exhaustion.
After multiple large legs.
Breaking News or Fundamental Catalyst Counter to Trend.
When No Consolidation Occurs.

Challenge 3:

Systemize reasons why you feel trends begin and end. Document it with charts and ticker write-ups.

Dissecting Some of Lance’s Big Losses / Gainers:

Waiting for the counter-trend to be in place.
Stubbornly thinking he was smarter than the market by playing analyst and not listening to the price action.

What Living With the Trend Looks Like

7-figure huge gainer (2/23/21)
Going WITH THE TREND When there is fresh news.
Going WITH THE COUNTER-TREND after the turn.

Challenge 4:

Dissect your trading to find where in your strategies you could better optimize by always being with the trend or finding ways to not fight the trend. Document it with charts and ticker write-ups.

Questions & Answers

See video for additional content.

Thanks for reading My Trading Journal!

To receive new posts and support my work, consider becoming a free subscriber!

My Trading Journal