Active since the 1980s · Stocks · US Investing Champion

Mark Minervini's SEPA Method and Trend Template

Only trade leaders in Stage 2, buy the tight pivot of a volatility contraction, and keep losses small.

Who they were

Mark Minervini is a US stock trader who won the US Investing Championship in 1997 with a return of over 150% and has written several books, starting with "Trade Like a Stock Market Wizard" (2013).

His approach, which he calls SEPA (Specific Entry Point Analysis), builds on the work of O'Neil and Weinstein, adding a precise trend template and the volatility contraction pattern.

Principles and rules

1. The trend template

Only consider stocks in a Stage 2 uptrend: price above the 150 and 200-day averages, the 150 above the 200, the 200 rising for at least a month, the 50-day above both, and price near its 52-week high.

2. Volatility contraction

The best entries come after a series of smaller and smaller pullbacks with drying volume (the VCP).

3. Specific entry point

Buy at the pivot, the breakout from the tightest point, not before and not far after.

4. Small losses

Keep the average loss much smaller than the average gain; cut losers fast and give winners room.

5. Risk management first

He stresses that protecting capital comes before chasing profits.

Key lessons

Trend first, pattern second, entry third.
Tight setups give small risks.
Your average loss is something you control completely.

Strategies from this method

Volatility Contraction Pattern (VCP)In a leading uptrend, each pullback gets smaller and volume dries up. Buy the breakout from the tightest point, the pivot.Cup and handle patternA rounded base (the cup) followed by a small, quiet pullback (the handle). Buy the breakout above the handle with a strict stop.Stage Analysis (Stan Weinstein)Every market cycles through four stages. Buy when it breaks out of the base into Stage 2 above a rising 30-week average, and sell when it rolls over.

How to practise it

The VCP strategy page has the full rules. In Candlemind, look for contracting pullbacks on 4H and use a pending order above the pivot with a stop under the last contraction.

Frequently asked questions

What is SEPA?

Specific Entry Point Analysis, Minervini's method combining a trend filter, fundamentals, the volatility contraction pattern and strict risk management.

What is the Minervini trend template?

A checklist of moving-average and 52-week-range conditions that confirms a stock is in a Stage 2 uptrend.

Summaries and paraphrases of public books and interviews, for education. Not investment advice.