Mark Minervini is a successful stock trader and author of the book "Trade Like a Stock Market Wizard." He follows a specific set of criteria for selecting stocks, referred to as the SEPA® methodology, which stands for Specific Entry Point Analysis®. Below are some of the key criteria and principles that Minervini emphasizes: Fundamental Criteria: 1. Earnings: Look for companies with strong recent earnings growth (e.g., at least 25% quarterly EPS growth). Annual earnings should also be trending upward. 2. Sales: Prefer companies with substantial and increasing sales growth. 3. Margins and Return on Equity: Look for companies with high-profit margins and a strong return on equity (ROE). 4. Debt: Companies with low debt levels are preferable. 5. Industry Group: Focus on stocks in leading industry groups or sectors. Technical Criteria: 1. Price Trend: Look for stocks in a strong uptrend. The stock should be near its 52-week high and trading above its moving averages. 2. Volume: Prefer stocks with increasing volume, especially when the price is moving up. This indicates strong demand. 3. Relative Strength: The stock should exhibit strong relative strength compared to the overall market and its peers. 4. Base Patterns: Look for stocks that are forming constructive base patterns, such as cup-with-handle, double bottom, or flat base. 5. Buy Point: Identify a specific buy point, which is typically when the stock breaks out of a base pattern on heavy volume. Other Important Principles: 1. Risk Management: Always have a pre-defined exit strategy to cut losses short. Minervini often uses a maximum loss of 3-4% below the buy point. 2. Portfolio Management: Diversify, but not excessively. Focus on the best-performing stocks and sectors. 3. Market Direction: Consider the overall trend of the market. Minervini often aligns his trades with the general market direction. 4. Psychology: Maintain a positive and disciplined mindset. Avoid emotional trading decisions. 5. Learning: Constantly educate yourself, analyze your trades, and strive for improvement.
He does all that work to drill down and find a stock that meets his tough criteria but will only tolerate that stock dipping 3% before he abandons it and stops out? Sounds kinda strange.
TAYD - Had a big run up the past year or so - 5 wave impulse. It appears to have only completed 2 waves of a corrective ABC 3 wave pattern. Actually wave B might still be underway. I'd wait for confirmation new uptrend has begun before entering, especially in light of overall current downtrend of the major indices. Blue/red dotted lines are resistance and support respectively.
Thank you for commenting here I will share some trades with his style if you have some trade ideas I will appreciate your shraing
Yes this is the awesome part because it will give you a huge R:R, if you backtest several strategies (by coding them) you will see that R:R is the most important part of the game if you wanna grow your account fast
He is one of the traders in the books of Market Wizards by Jack Schwager. Jack does his research very thoroughly to find the best performers for his books...
To be honest I'm new to his system of trading but why I wanna stay with it: 1. 95% of the trading education on the net is pure scam. (you will learn that after 3 years in the game). 2. 2% are the pro scammers who open their platform in front of you and motivate you to start day trading (after 4 to 5 years of this you understand that they are scammers too) how do you see they either own the brokerage company they trade with or they have a huge % share of the trades of their followers from the broker, and they trade the demo OR they trade real account but in an environment that is not available to retail traders (like having their own risk managers and trading coaches) they know the traders that follow their guides will lose money but they still do that why because they have indirect incentives. 3. 1% the academia where they talk about hedge fund strategies (it will take you 1 to 2 years ) to understand that making (in a best-case scenario) 50% on a small capital you have will not take you anywhere at least while you have the ability to enjoy something called life. 4. after all the above you understand the following: - Day trading is not for someone to do it alone because its psychology can't be controlled alone without a risk manager (in the long term don't look to 5 months of trading as proof of the opposite). -You need someone who did it and has some kind of proof he succeeded in the long term alone in a retail environment, not in a hedge fund or prop firm with his methodology and has a good reputation in the long term and above that his return is not 20% to 50% a year.