Mark Minervini Trend Template & VCP Guide
Mark Minervini Trend Template & VCP Guide
Complete institutional blueprint of Mark Minervini Specific Entry Point Analysis (SEPA) trading engine. Detailing the Trend Template 8 non-negotiable criteria, Volatility Contraction Pattern (VCP) base physics, progressive exposure protocols, and asymmetric risk-reward execution.
- Trend Template Strictness: 8 Mandatory Criteria — 8 Required Trend Rules
- Stage 2 Momentum Rule: 1.50x Pivot Volume — Minimum 30% Above 52w Low
- Hard Risk Containment: 8.00% Max Stop Loss — Absolute Stop Loss Cap
Minervini Trend Template & VCP Screener Engine
Enter current equity price, key moving averages (50, 150, 200 SMA), 52-week price extremes, and contraction count to audit Stage 2 qualification and VCP setup readiness.
- Trend Template Compliance Score:
- VCP Base Tightness Index:
- Breakout Success Probability:
Prime Stage 2 Trend Template Leadership Candidates
- NVIDIA Corporation — [Ticker: NVDA | Company Name: NVIDIA Corporation]
- AppLovin Corporation — [Ticker: APP | Company Name: AppLovin Corporation]
- Palantir Technologies Inc. — [Ticker: PLTR | Company Name: Palantir Technologies Inc.]
- CAVA Group, Inc. — [Ticker: CAVA | Company Name: CAVA Group, Inc.]
- Axon Enterprise, Inc. — [Ticker: AXON | Company Name: Axon Enterprise, Inc.]
The Specific Entry Point Analysis (SEPA) Methodology
Mark Minervini, two-time U.S. Investing Champion with a verified five-year 220% average annual compound return, pioneered the Specific Entry Point Analysis (SEPA) system to systematically identify explosive market leaders before their primary markup phase.
SEPA integrates fundamental screening—such as triple-digit earnings growth, expanding gross margins, and institutional accumulation—with precision technical timing to execute entries with minimal downside exposure.
The core philosophy dictates that capital should only be committed to stocks displaying undisputed relative strength in established institutional uptrends. Counter-trend bottom fishing is strictly forbidden.
By focusing exclusively on the sweet spot of a stock lifecycle—the Stage 2 advancing phase—traders maximize capital velocity and eliminate the opportunity cost of holding stagnant consolidation bases.
The 8 Non-Negotiable Criteria of the Trend Template
Minervini Trend Template serves as an unyielding pre-qualification filter. Unless an equity satisfies all eight mathematical criteria, it is disqualified from purchase consideration regardless of fundamental story.
Criterion 1 through 3 dictate trend alignment: current price must trade above both the 150-day and 200-day simple moving averages (SMA), with the 150-day SMA holding firmly above the 200-day SMA.
Criterion 4 requires that the 200-day SMA has been trending upward for at least one month (ideally 4–5 months). Criterion 5 requires the 50-day SMA to be above both the 150-day and 200-day SMAs.
Criteria 6 through 8 enforce momentum positioning: current price must trade at least 30% (ideally 100%+) above its 52-week low, and within 25% (preferably within 10–15%) of its 52-week high, accompanied by a Relative Strength (RS) rating above 70.
Physics of the Volatility Contraction Pattern (VCP)
Once a stock satisfies the Trend Template, Minervini searches for base consolidation patterns exhibiting Volatility Contraction Pattern (VCP) characteristics. A VCP reflects the systematic absorption of overhead supply by institutional buyers.
During a typical VCP base, successive price pullbacks become progressively shallower—for example, contracting from a 25% correction (T1), to 12% (T2), to 5% (T3), down to 2% (T4) adjacent to the pivot line.
Crucially, trading volume must dry up dramatically during each contraction. Drying volume indicates that floating supply has been completely absorbed and loose retail hands have been shaken out.
The optimal entry point occurs as the stock breaks through the pivot level on expanding volume—often 100% to 300% above its 50-day moving average volume—signaling institutional accumulation.
Progressive Exposure and Asymmetric Risk Management
Minervini risk management principles are uncompromising: keep losses small, never let a winning trade turn into a loss, and size positions according to demonstrated trading performance rather than conviction.
Under Progressive Exposure, a trader starts with modest initial position sizes (e.g., 5% to 10% portfolio allocation). Exposure is scaled upward only as open positions generate realized profits and market conditions confirm positive feedback.
The maximum allowable stop-loss on any trade is capped at 7% to 8%, with an average stop loss target between 4% and 5%. If a stock triggers the stop, the position is liquidated without hesitation or emotional attachment.
By maintaining an asymmetric 3:1 or 4:1 reward-to-risk ratio (averaging 15% to 20% gains on winners against 4% to 5% losses on losers), a trader achieves extraordinary compounding even with a modest 40% to 50% win rate.
Executing the Daily Scan: Workflow and Pitfalls to Avoid
A professional Minervini trader executes a disciplined daily routine: running Trend Template scans after market close, annotating emerging VCP bases, and placing pre-market stop-limit buy orders at exact pivot prices.
Common pitfalls include chasing extended stocks trading more than 5% above the pivot, buying during loose, erratic consolidations that lack volatility contraction, and failing to honor stop losses.
Another fatal mistake is buying stocks with declining relative strength lines, mistaking lagging cyclical laggards for authentic market leaders.
Mastering Minervini methodology requires emotional detachment, mechanical rule execution, and the patience to hold cash during unfavorable market corrections until ideal setups reappear.
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Upgrade to Gemral Edge Pro ($39/mo)Frequently asked questions
What are the 8 criteria of Mark Minervini Trend Template?
1. Price > 150 & 200 SMA. 2. 150 SMA > 200 SMA. 3. 200 SMA trending up >= 1 month. 4. 50 SMA > 150 & 200 SMA. 5. Price > 50 SMA. 6. Price >= 30% above 52-week low. 7. Price within 25% of 52-week high. 8. RS rating >= 70.
What is a Volatility Contraction Pattern (VCP)?
A VCP is a constructive consolidation where price pullbacks become progressively narrower (e.g. 20% -> 10% -> 3%) accompanied by drying volume, indicating overhead supply has been absorbed prior to an explosive breakout.
How does Minervini manage trading risk and stop losses?
Minervini never risks more than 7-8% on any single trade, targeting average losses around 4-5%. He insists on a minimum 3:1 reward-to-risk ratio and uses Progressive Exposure to scale size only when winning.
Where is the exact buy point (pivot) in a VCP setup?
The pivot buy point is typically the high of the final narrow contraction (the cheat or handle) as price breaks out on surge volume at least 50% above the 50-day average volume.
Risk Disclaimer
Trading and investing in digital assets, financial instruments, and predictive events involve substantial risk of loss and are not suitable for every investor. The predictive intelligence, probability distributions, historical precedents, and scenario modeling presented on this page are compiled for informational and research purposes only and do not constitute financial, investment, legal, or tax advice. Past performance and statistical precedents do not guarantee future outcomes. Always conduct independent due diligence before committing capital.