Recently revisited Mark Minervini's trading approach, and I have to admit, this guy is truly a trading genius. He has won the US Trading Championship twice, with one year achieving a 155% return and another 334.8%. Such achievements are top-tier regardless of the era. Even more impressive is that his worst year in his entire trading career still yielded a 128% return, with only one quarter showing a loss, and that loss was less than 1% of the principal. Such results are not achieved by luck.

Mark Minervini is never secretive and has always shared his trading system. He says he has used the same method for decades and has perfected the craft of trading. In 2021, he entered the competition again to prove that this system can consistently generate profits regardless of market changes or asset swaps. Where does this confidence come from? It comes from his strategy called SEPA.

SEPA stands for Specific Entry Point Analysis, which essentially means precise entry point analysis. The core logic is clear: find super-strong stocks that are in an uptrend both fundamentally and technically, enter at the right time and price, and use strict risk control to maximize gains. It sounds simple, but executing it requires a system.

The first step is screening. Mark Minervini uses TradingView's screener with automated filters. His criteria are as follows: the price and 50-day moving average must be above the 150-day and 200-day moving averages, forming a bullish alignment; the 200-day moving average must be in an uptrend for at least a month, ideally four or five months; the current price should be at least 25% above the 52-week low, and more than 100% higher is even better; the distance from the 52-week high should not exceed 25%, with closer to new highs being preferable. This screening filter can eliminate over 90% of junk stocks, leaving mostly those in strong momentum.

Next is waiting. Waiting for what? Waiting for catalysts. New product launches, regulatory approvals, major contracts, technological breakthroughs—these are key drivers of stock price movement. Mark Minervini researches the fundamentals of these stocks, compares them to past similar strong stocks, and forms a rough expectation of their future trend.

The real entry signal comes from VCP, or Volatility Contraction Pattern, which involves price and volume gradually contracting in a consolidation phase. In a strong uptrend, the longer the consolidation, the larger the subsequent wave. Mark Minervini often uses two types of VCPs.

One is the triple bottom pattern. The stock pulls back during a strong rally, forming lows, then consolidates with decreasing volume and price volatility, with the lows gradually rising, eventually forming three bottoms. This pattern usually indicates a continuation of the uptrend, with breakouts typically accompanied by volume and price increases. Stop-loss is set at the lowest point of the breakout candle or at least below the second low—avoid placing it right at the last bottom.

The other is the cup with handle. It starts with a U-shaped bottom, indicating a steady recovery after a decline, with decreasing volume during this phase. Then it enters the handle phase, consolidating further with volume contracting. The key is whether the breakout from the handle is accompanied by increased volume. Mark Minervini bought PAG in 2021 as a textbook example. The stock started to pull back in mid-May, then surged again in July forming a cup, and in August, it formed a handle within a narrow channel. On September 1st, with a volume surge, he entered the trade, and the gains were substantial.

However, Mark Minervini also emphasizes that another key to making money with SEPA is the exit strategy. This is based on his years of trading experience—knowing when the market is strong enough to sell, when it’s weakening, and having warning signals before a crash. These must be standardized. Without disciplined entry and exit rules, even the best strategy is useless.