Lance Breitstein

Host Richard Moglen introduces Lance Breitstein — former Trillium top trader and SMB Capital advisor — for his first TraderLion presentation. Lance jokes about the witty "Trend That Love Story" title, delivers the obligatory prop-trading compliance disclaimers with humor, and sets the agenda: why every trader needs to live, breathe, and trade with the trend.

Despite having one of the best trainers on the street and an environment built for success, Lance was one of the slower learners in his trading class. Even as he improved and approached the top 10 at his firm, every year he would burn millions of dollars in big losses — a pattern nobody else at the firm had. He was interviewing for other jobs and losing faith in himself.

Lance reviewed his entire career and one pattern became abundantly clear: his best trades immediately went in his favor, and his absolute worst trades were all fights against the trend. This heuristic — that trades working in your favor tend to be with the trend and trades going against you tend to be against it — became the foundation of his transformation. The beauty is that trading with the trend naturally minimizes drawdowns and opens you to asymmetric upside, even on mean reversion setups.

Lance challenges the audience: have you actually taken time to define what a trend is? He builds from simple definitions — an upward-sloping price — to the more specific pattern of higher highs and higher lows. Using Micron and Nvidia charts, he demonstrates the stair-stepping structure (leg higher, shallow pullback, leg higher) that consistently precedes major earnings breakouts.

Additional trend definitions: holding above VWAP all day (Nvidia on May 18th before blowout earnings) and holding above key moving averages (First Solar weekly chart). Lance emphasizes a core principle: all technical concepts are fractal — they apply identically whether you zoom into a one-minute chart or out to a monthly chart. The same structure that defines an intraday trend defines a secular bull market.

Lance introduces the concept of a reference price as the anchor that defines trend in real time. Using the GME intraday chart from January 28, 2021 — the stock melting down 210 points — he shows how waiting for the counter-trend (a break of prior bar highs) transforms what looks like fighting the trend into trading with it. This single shift in timing — waiting for the reversal confirmation rather than guessing the bottom — eliminated his biggest drawdowns and turned his mean reversion from a source of losses into a source of gains.

Once you have defined trend clearly, mechanical rules naturally follow. Lance shares one rule he and another eight-figure trader independently discovered: never be long if a stock is steadily holding below VWAP, never be short above VWAP, and never trade range-bound or consolidating stocks. These simple, binary filters eliminate an enormous number of losing trades before they can be taken.

Lance explains a central sizing principle: when a stock is trending in the same direction on the intraday, daily, weekly, and monthly charts simultaneously, he adds roughly 25% more size. The alignment of multiple timeframes dramatically increases the odds of follow-through because every constituency — day traders, swing traders, and institutions — is positioned in the same direction. The confidence to size up on these rare, high-conviction setups is what separates exceptional P&L years from average ones.

Knowing when a trend is ending is as important as identifying when it begins. Lance teaches the signals: huge volume spikes relative to prior bars, price exhaustion where the move accelerates to an unsustainable angle, and capitulatory patterns where the last weak hands are flushed out. These climax signals create the foundation for the next move — the same massive volume dump that marks the end of a downtrend becomes the accumulation base for the reversal higher.

Lance candidly shares a trade where he broke his own rules: Tesla in late 2022. Despite Tesla holding up well versus a crumbling tech sector, the Elon Musk Twitter saga began cracking the stock. Rather than waiting for the turn, Lance got caught fighting an accelerating downtrend — the stock started sinking, he kept pressing, broke multiple rules, and took losses. The lesson: nobody is perfect, and the discipline of waiting for the counter-trend confirmation is what separates ego-driven trading from process-driven trading. The market doesn't care how smart you think you are.

Lance walks through a WorkHorse (WKHS) short trade on a market-wide panic day. With a negative news catalyst, the stock went limit down repeatedly — halting, reopening, and halting again. By structuring the trade with the trend (short on the news, holding through halts), Lance caught a massive extended move. He contrasts this with his earlier tendency to buy the left side while stocks were still crashing — a structural mistake that converting to trend-first thinking eliminated entirely.

Lance wraps the presentation with four audience challenges: define all the ways you identify a trend, make a list of rules based on trend vs. range-bound conditions, systemize reasons why trends begin and end, and dissect your own trading to find where trend thinking can optimize your strategies. Host Richard opens Q&A with questions about structuring mean reversion trades with a catalyst, finding stocks with no fresh news that are still in play, and using price spike and volume filters to identify the right names.

Lance explains his risk management framework: every trade needs a defined stop, but the stop serves a purpose beyond loss prevention — it tells you when the trade structure was wrong. If he is drawing down significantly on a position, that drawdown is a signal that the structure is flawed, not that he needs a wider stop. He sizes up only on A+ setups where multiple timeframes confirm the trend, and keeps position sizes calibrated so that no single trade — or cluster of trades — can take him out of the game.

Diving deeper into identifying the right side of a V-bottom: Lance looks for daily charts that are exceptionally extended and intraday charts showing capitulation volume. His key heuristic is 2x volume — the capitulation bar should show at least double the volume of the prior bar, ideally on both daily and intraday timeframes. But the first and most important step is trading the right names: 99% of stocks are noise most of the time. The edge exists only in stocks that are truly in play with trending, exceptional moves.

Lance advises traders to write down every trade category they trade — breakouts, mean reversion, breaking news catalysts — and for each category rank the key variables. What does the volume need to look like? How should the chart be setting up? How tight can the stop be? The point is to convert intuition into explicit criteria, making every setup evaluate-able against a written standard rather than a gut feeling. The written standard is what lets you size correctly when a high-probability setup appears.

Lance explains why he uses two-minute bars: it is not magic, but a practical timeframe. Technicals are fractal, so the same concepts apply to any bar size. His entry uses the prior two-minute bar high (for longs) or low (for shorts) as the trigger, and his trailing stop uses the same prior bar levels. When a stock breaks a prior bar high and holds, the trend is confirming — and when it breaks a prior bar low, the trend may be ending. The method is mechanical, repeatable, and removes discretion at the moment of execution.

Lance acknowledges he simplifies for training: the two-minute bar low is the trailing stop rule he teaches. But his actual trading has more nuance. The key exception: when a position capitulates in his favor — when it gets euphoric and pulls far away from the trend at an unsustainable angle — he takes some or all off early rather than waiting for the trailing stop to trigger. The trailing stop is the baseline system; recognizing euphoric capitulation is the art that improves the system's returns.

Lance uses a sentiment scale to stay calibrated during trades. Zero is neutral — flat, dead price action. Positive 10 is steady, sustainable bullish accumulation. Positive 20 is euphoric — so bullish you do not want to be long anymore because the move is exhausting itself. Negative 10 is steady bearish selling. Negative 20 is pure panic capitulation — everyone puking, the exact condition for a mean-reversion long. The scale forces continuous awareness of where the stock sits in the emotional cycle, preventing you from buying euphoria or shorting panic.

Lance describes his preparation before the trading day: identifying key levels on in-play names, setting alerts at those levels rather than staring at the screen, and mentally rehearsing the specific criteria that would trigger action. He emphasizes that knowing your criteria dead cold before the open prevents the most common category of mistake — reacting to price movement in real time without a pre-existing framework. The mental state when a setup triggers is readiness, not discovery.

Addressing the question of where to place a stop after a capitulation low: Lance acknowledges that sometimes the low is briefly breached before the real move begins. His approach is to accept missing some trades rather than getting whipsawed by setting stops too tight. When the capitulation is genuine — high volume, fast price movement — the turn usually holds, and the times it does not are the cost of doing business. The alternative of trying to catch every tick of the turn leads to overtrading and larger losses.

Lance lays out a framework for fixing over-trading. First, diagnose the root cause: is it boredom? FOMO? Not trusting your own edge? Following someone else in a chat room? Once the cause is identified, build a literal system to prevent it — Lance describes a friend who uses three physical golden bullets per day as a hard limit. Other examples: stepping away from the screen during lunch, zero-share tiering a ticker after two losses, and recognizing that many experienced traders have reached a level where the training wheels from others are now slowing them down.

Lance describes the daily report card he filled out every single day without exception during his Trillium years — a habit he credits as one of the simplest and highest-impact things any trader can implement immediately. The template grades rule-following, risk amounts, and process adherence. The act of writing down whether you followed your rules every day creates accountability that internal monologue cannot — if you have to write down that you broke a rule, you are far less likely to break it again tomorrow.

Lance maintains a database of standout tickers going back years — 2021 top ops, 2020 top ops, 2019 top ops, all in Evernote. Even for trades he did not take, he documents the setup to build pattern recognition for the next occurrence. He argues that the database is more valuable than post-trade journaling alone because it captures opportunity recognition, not just execution. Reviewing what you saw but did not act on is often more instructive than reviewing what you actually traded.

Lance walks through his process for high-impact event days. For a breaking news catalyst, he has two approaches: trade the initial headline reaction aggressively if the setup aligns, or wait for the news to digest and then trade the post-consolidation trend that emerges. He prefers the latter for most events because the initial reaction is often noise — algorithms and emotional traders creating a spike that reverses. The discipline on catalyst days is the same as any other day: trade what the chart shows, not what the headline says should happen.

Lance does not try to predict the next market theme — he keeps his head on a swivel and follows the volatility. When CPI was driving every move, he traded CPI-sensitive names. When AI emerged, he moved capital toward the stocks responding to AI catalysts. The skill is recognizing what the market is currently rewarding and adapting quickly, not being right about the future. He is skeptical of traders who claim they can predict themes — most of the biggest market-moving events were not predicted by anyone.

Lance explains that a trading halt is an imbalance between supply and demand — the clearing price based on order flow should be lower (or higher) than where the stock is halted. His rule: never be on the wrong side of a halt. He closes with the Chinese farmer parable from Buddhist philosophy — the farmer's horse runs away (bad luck?), returns with wild horses (good luck?), the son breaks his leg taming one (bad luck?), the army comes conscripting but passes over the injured son (good luck?). The point: no single event is inherently good or bad, and the same is true in trading. A losing trade can teach what prevents ten future losses. Keep perspective.