Recently studying some methodologies of trading masters, I discovered a very interesting phenomenon. There is a trader named Mark Minervini, whose track record is simply unbelievable—he won the U.S. Trading Championship on his first try with a 155% return, and 21 years later, he achieved a 334.8% return again. Even more astonishing is that his worst year in his entire trading career still earned 128%, and it’s said he only lost money in one quarter, losing less than 1% of his principal. Such stability is really rare.

What impressed me most is that Mark Minervini never keeps his methods secret and is especially willing to share his trading logic. He says he has been using the same strategy for many years, becoming more and more proficient, and what he does now is exactly the same as in the past—just to prove that this method can stand the test of time. This level of focus is quite admirable.

His core idea is simple but very serious: trading is about real money, and it requires a meticulous battle plan. He calls his method SEPA, which stands for Specific Entry Point Analysis. The core concept is to find super-strong stocks that are trending upward both fundamentally and technically, enter at the right time and price points, and profit through strict risk management.

How does he operate specifically? The first step is screening. Mark Minervini uses TradingView filters to automatically filter candidate stocks based on specific conditions, which makes the process very efficient. He summarizes the screening criteria in great detail, such as the price and the 50-day moving average both being above the 150-day and 200-day moving averages, forming a bullish alignment; the 200-day moving average staying upward for at least a month, preferably four or five months; the current price being at least 25% above the 52-week low, ideally more than 100%; the distance from the 52-week high not exceeding 25%, with closer to new highs being better. This basic filter can roughly eliminate over 90% of junk stocks.

After screening, it’s time for catalysts. New product launches, regulatory approvals, positive industry changes, major contracts, disruptive technologies—these can all be key drivers of stock price movement. Mark Minervini compares these to past similar strong stocks to form an expectation of the subsequent trend.

Next is the second step: waiting for the price to form a VCP, or Volatility Contraction Pattern, which is a consolidation pattern where price fluctuations and volume gradually contract. In a strong trend, the longer the consolidation, the larger the subsequent price move.

There are two classic types of VCP patterns. One is the triple bottom, where during an uptrend, the market pulls back to form a low point, then consolidates. As volume and volatility shrink, the lows get higher, eventually forming a standard triple bottom. This kind of horizontal or downward-converging pattern usually indicates a continuation of the uptrend, with a high probability of breakout. When it breaks out, volume and price usually rise together. However, false breakouts can occur, so it’s best to set stop-losses at the lowest point of the breakout candle or at least below the second low.

The other is the cup and handle pattern, which takes longer to form. It starts with a U-shaped bottom, indicating the price drops and then steadily recovers with decreasing volume. After the cup forms, a shorter consolidation zone appears as the handle, with volume decreasing further. The key is to identify the breakout of the handle, which should be accompanied by increased volume. Mark Minervini’s purchase of PAG stock in 2021 is a classic example: after rising for over a year, it pulled back in mid-May, then continued to rise in July forming a U-shaped cup, and in August, it oscillated within a narrow channel forming the handle. He entered on September 1st when it broke out with volume, and the gain was quite impressive; afterward, the price never returned to that level.

The final key is the exit strategy. Mark Minervini has summarized sell criteria based on years of experience for market strength and weakness, as well as warning signals before a sharp decline. This strict exit system is just as important, if not more so, than the precise entry strategy. Many focus only on how to buy, but how to sell ultimately determines the final profit.