Minervini VCP Volatility Contraction Screener

Updated: October 9, 2026 · Author: Jennie Chu · Reviewed by: Gemral Research Desk · Editorial Policy

Mark Minervini VCP Volatility Contraction Screener

Algorithmic technical momentum screener identifying Stage 2 Trend Template compliance, multi-wave volatility dampening, volume dry-up (VDU) thresholds, and cheat pivot breakout triggers.

VCP Pivot Parameter & Risk/Reward Screener

Calculate precise Cheat Pivot entry prices, structural stop-loss buffers, and asymmetric risk/reward targets.

• Calculated Cheat Pivot Point:
• Structural Stop-Loss Level:
• Percentage Risk per Share:
• Minimum Measured Move Target:
• Risk/Reward Multiple:

1. The Algorithmic Edge of Quantitative VCP Screening

In modern algorithmic financial markets, discretionary manual chart scanning across thousands of listed equities is an inefficient, error-prone endeavor. Professional momentum traders and proprietary trading desks leverage automated quantitative screeners to filter the global equity universe down to a hyper-curated watchlist of prime Volatility Contraction Pattern (VCP) candidates.

Mark Minervini's VCP is inherently mathematical. It is defined by strict quantitative parameters: progressive dampening of price oscillations, diminishing percentage retracements across successive contraction waves, and the drying up of trading volume to a fraction of its 50-day moving average.

This screener automates the entire SEPA qualification funnel: first eliminating equities failing the 8-stage Trend Template, then measuring the mathematical symmetry of base contractions, and finally isolating stocks coiling within 2% to 4% of their optimal Cheat Pivot buy points.

By translating Minervini's qualitative trading wizardry into deterministic code, traders eliminate emotional bias, bypass false breakouts, and execute with disciplined mathematical precision.

2. The Multi-Stage Screening Architecture

The screener operates through a rigorous multi-stage pipeline designed to minimize false positives and maximize signal fidelity.

Gate 1 executes the Stage 2 Trend Template filter across the broad equity database. Over 90% of all public stocks are immediately disqualified because their moving averages are declining, inverted, or trading beneath long-term institutional benchmarks.

Gate 2 scans the qualifying candidates for base consolidation characteristics: the security must have formed a recognizable consolidation base lasting between 3 and 45 weeks, with an initial correction depth not exceeding 35% (or 45% in severe bear markets).

Gate 3 runs our proprietary Volatility Dampening Algorithm: measuring the peak-to-trough percentage depth of each internal contraction wave. A valid VCP setup requires that each successive pullback retraces roughly half the depth of the preceding wave (e.g., T1 = -24%, T2 = -12%, T3 = -5%, T4 = -2.5%).

3. Precision Volume Dry-Up (VDU) Detection

The linchpin of our screener logic is the algorithmic identification of Volume Dry-Up (VDU). Many retail traders mistakenly buy tight price consolidations that still contain heavy, covert institutional distribution.

Our algorithm continuously tracks the ratio of current daily volume relative to the 50-day simple moving average volume. To trigger an 'A+ VDU Coiling' alert, the stock must print at least 1 to 3 consecutive trading sessions where daily volume falls below 45% of the 50-day average, accompanied by the daily high-low spread contracting to within 1.5x of the Average True Range (ATR).

This combination of ultra-low volume and micro-spread bars proves mathematically that sellers are completely exhausted. The stock has run out of supply.

When institutional buyers step in to build a position in a supply-starved stock, there are no resting sell limit orders on the orderbook to absorb their demand, forcing the price to gap or surge violently through the pivot.

4. Sizing the Asymmetric Cheat Pivot Risk Envelope

The ultimate output of the Minervini VCP Screener is the automated calculation of the 'Cheat Pivot Risk Envelope'. Retail traders frequently fail because they do not know exactly where to enter or where to place their stop-loss.

Our screener identifies the Cheat Pivot as the exact high of the final tightest contraction bar plus a 0.2% price buffer. The structural stop-loss is automatically calculated and placed immediately beneath the absolute low of that same final contraction wave.

Because the final contraction in an elite VCP is exceptionally tight (often between 2% and 4%), the required stop-loss is remarkably small. On a $100 stock with a 3.5% final contraction, the entry pivot might sit at $100.20 with a stop-loss at $96.50—risking just $3.70 per share.

Modeling an initial measured-move target of 3.5x risk projects an upside target of $113.15, establishing an institutional risk/reward multiple of 3.5:1. If the stock achieves a standard 20% to 30% Stage 2 markup run, the realized payoff multiple expands beyond 6:1 to 8:1.

5. Institutional Workflow & Screener Execution Rules

To integrate the Minervini VCP Screener into a professional trading routine, institutional operators adhere to a structured daily execution checklist.

Step 1: Nightly Post-Market Scan. Run the screener immediately after market close to identify stocks printing fresh VDU signals in the tightest contraction tier. Review the resulting watchlist of 5 to 15 candidates and inspect underlying fundamental catalysts (quarterly EPS growth, sales acceleration, return on equity).

Step 2: Pre-Market Order Preparation. Set automated buy-stop limit orders at the calculated Cheat Pivot prices for the top 2 to 3 highest-rated setups. Pre-calculate position sizing according to portfolio risk rules (limiting risk on any single trade to 0.5% to 1.25% of total portfolio equity).

Step 3: Intraday Volume Confirmation. Upon market open, monitor the Volume Pace Indicator on triggering breakouts. A valid pivot breakout should project first-hour volume tracking at 150% to 300% above normal pace, confirming that institutional mega-funds are aggressively chasing the breakout.