Lance argues traders should focus on rate of change and price slope, not theory. A slope of -10 signals a waterfall drop, while -0.5 is steady. Spotting when a boring asset suddenly moves big is where the money is.
So any trader worth their salt should be saying, okay, Lance, all that theory is great, but how does this actually play out in the charts? I would say rate of change is one of the most important factors I'm looking for. And let's say we've got one pattern. Our slope is maybe -0.5 slope. We can then start to say if it's -0.5 slope, it's kind of a steadier move. There's not real panic. And rate of change, obviously, if something goes from $100 to $1 in a flash, that's really appealing, right? So now this gets a little bit more aggressive. That gets even more aggressive. If we take this to an extreme, we can get really asymptotic, where something really waterfalls over. So that if we then go in terms of slope, maybe we have a -1, a -3, and then maybe this goes like a -10. Imagine you get something that is exceptionally, exceptionally boring. So if we get the most boring thing in theory, what we really would love is let's say we break down and then something that's normally boring makes an exceptionally large move.
