The short version
Mark Minervini is an American trader who has spent four decades buying the market's strongest stocks at the moment they start to move. His method has a name, SEPA, and three tools that most people know him by: the Trend Template, an eight-point filter for a healthy uptrend; the VCP, a base in which each pullback is smaller than the last; and the Power Play, a rare, explosive move he treats as its own setup.
Under all three sits a rule he repeats more than any other: keep every loss small. The tools find the trades. The loss rule is what makes them pay.
Who he is
Minervini started trading in the early 1980s with little money and no formal training, and by his own account lost much of it before the method came together. In 1997 he entered the U.S. Investing Championship, a contest traded with real money, and won it with a 155% return. Jack Schwager featured him in Stock Market Wizards (2001), alongside some of the best-known traders of the period. He won the Championship again in 2021.
He has written three books: Trade Like a Stock Market Wizard (2013), the one most traders start with, Think & Trade Like a Champion (2016) and Mindset Secrets for Winning (2019). He also teaches through workshops and a members' service.
SEPA: the process in five parts
SEPA stands for Specific Entry Point Analysis. The name stresses the entry, but the process has five parts, and a stock needs all of them:
- Trend. The stock is in Stage 2, a confirmed uptrend. Minervini takes the four stages from Stan Weinstein and adds stricter conditions of his own.
- Fundamentals. Earnings and sales are growing, ideally faster each quarter. He wants a business that is improving, not one that is merely cheap.
- Catalyst. Something new that explains why the stock should be re-rated: a product, a change in the industry, a surprise in the numbers.
- Entry point. A precise, low-risk place to enter, usually as the stock leaves a tight base on rising volume.
- Exit point. A stop decided in advance, and a plan for taking profits on the way up.
The Trend Template
The Trend Template is the first gate. Before Minervini studies a chart closely, the stock must pass all eight points:
- Price above both the 150-day and the 200-day moving average.
- The 150-day average above the 200-day.
- The 200-day average trending up, ideally for at least a month.
- The 50-day average above both the 150-day and the 200-day.
- Price above the 50-day average.
- Price at least 30% above its 52-week low.
- Price within 25% of its 52-week high.
- A relative strength ranking of 70 or better, the higher the better.
Read together, the eight points describe one thing: a stock whose short-, medium- and long-term trends all point up, that has already risen well off its low, and that is still close to its high. It is a filter, not a signal. Passing it means a stock is worth studying.
After the latest close, 267 NSE stocks pass all eight.
See tonight's Trend Template list →
The VCP: a base that tightens
The Volatility Contraction Pattern is Minervini's description of what a good base looks like just before it breaks out. The stock pulls back, recovers, pulls back again by less, and again by less still: perhaps 25%, then 12%, then 6%. Each contraction is shallower than the one before, and trading volume falls away during them.
What the pattern shows is supply running out. The sellers who wanted out at higher prices have been absorbed, each dip finds buyers sooner, and the range narrows until there is little left to sell. The entry is the breakout from the last, tightest contraction, with a stop just below it. Because the range is so narrow, the stop is close and the risk on the trade is small.
The Power Play
The Power Play is Minervini's exception. A stock rises 100% or more in under eight weeks on heavy volume, usually on news, then rests for three to six weeks without falling more than 20 to 25%. Because it moves so fast, it can qualify before its long-term averages have caught up, so he does not require it to pass the Trend Template.
The shape is the same one William O'Neil called the high tight flag. It is rare: on most days only a handful of NSE stocks qualify, and many are small companies. Treat the list as a set of charts to open, never as a set of trades.
Losses: the part most people skip
Minervini's most repeated advice is about losing. He sets his stop before he enters, rarely risks more than about 10% on a position, and in practice cuts most losers well before that. His reasoning is arithmetic: a 50% loss needs a 100% gain to recover, while a string of 5% losses can be paid back by one good trade.
He adds two habits. As a stock rises, he raises the stop so that a good gain is not allowed to turn into a loss. And he sells some of a position into strength rather than waiting for the top. Neither is exciting. Both are why his method survives bad markets.
Using his method on the NSE
The rules carry over because they describe how buying and selling show up on a chart, and that works the same way on the NSE. Three things need extra care here.
Liquidity. Thousands of NSE stocks trade thinly. In those, a tightening range can simply mean nobody is trading, and a breakout can be one large order. A VCP is worth far more in a stock that trades several crore rupees a day.
Price bands. Many Indian stocks have daily price limits. A stock that hits its band cannot trade further that day, so a Power Play can arrive as a run of limit days, which makes the entry and the stop harder to place.
The market. Minervini, like Weinstein, does far less when the market is weak, because most stocks follow it. Check our market read before acting on any list.
Try it on Stage2StocksRun the Trend Template tonightEvery NSE stock passing all eight points after the latest close, with each rule's pass count shown so you can see which one does the work.
Questions people ask
Who is Mark Minervini?
An American stock trader and author, known for his SEPA method and for winning the U.S. Investing Championship in 1997, with a 155% return, and again in 2021. Jack Schwager profiled him in Stock Market Wizards (2001), and he has written three books on his approach, starting with Trade Like a Stock Market Wizard (2013).
What is SEPA?
Specific Entry Point Analysis, Minervini's name for his whole process. He looks for stocks in a Stage 2 uptrend with strong earnings and a catalyst, waits for a low-risk entry point such as the end of a volatility contraction, and decides where he will exit before he enters.
What books has Mark Minervini written?
Trade Like a Stock Market Wizard (2013), Think & Trade Like a Champion (2016) and Mindset Secrets for Winning (2019). He also took part in Momentum Masters (2015), a roundtable book with David Ryan, Dan Zanger and Mark Ritchie II.
What is Minervini's stop-loss rule?
Cut losses small and fast. He sets the stop before entering, rarely risks more than about 10% on a position, and keeps his average loss far smaller than his average gain, so that one good winner pays for several losers.
Does Minervini's strategy work in India?
His rules are about price, volume and earnings, and NSE stocks move through the same patterns, so the method carries over. Liquidity needs care: many small NSE stocks trade thinly, and a tightening range in a stock that barely trades tells you little. Run the Trend Template first and keep to names with steady daily turnover.