Why Minervini's method works in TrendSpider
Mark Minervini's Specific Entry Point Analysis (SEPA) — popularised in Trade Like a Stock Market Wizard — is built on five mechanical pillars: trend template, fundamentals, volatility contraction patterns (VCP), entry timing, and risk management. Of those, four can be operationalized inside TrendSpider in ways that would take hours to do manually.
This guide walks the full Minervini stack, mapped to TrendSpider features.
Pillar 1: The Trend Template (mechanical screen)
Minervini's trend template requires a stock to be in a Stage 2 uptrend. The mechanical version:
1. Current price > 150-day SMA > 200-day SMA
2. 200-day SMA trending up for at least 1 month
3. 50-day SMA > 150-day SMA > 200-day SMA
4. Current price > 50-day SMA
5. Current price at least 30% above its 52-week low
6. Current price within 25% of its 52-week high
7. Relative strength rank > 70 (versus the broad market)
Build this as a TrendSpider scanner. Universe: Russell 3000 (or your equivalent liquid universe). Filter conditions:
```
close > sma(close, 150) AND sma(close, 150) > sma(close, 200)
sma(close, 200, 20) > sma(close, 200, 21) // 200-day MA rising
sma(close, 50) > sma(close, 150) > sma(close, 200)
close > sma(close, 50)
close > 1.30 * lowest(close, 252)
close > 0.75 * highest(close, 252)
relativeStrength(close, "SPY") > 70
```
Save the scanner as "Minervini Trend Template." Run it daily — it surfaces the universe of names eligible for further analysis.
Pillar 2: Volatility Contraction Pattern (VCP)
A VCP is a series of progressively smaller pullbacks and tighter consolidations near the high. The mechanical signature:
- 3+ pullbacks within the last 12-15 weeks
- Each pullback smaller in % than the previous
- Volume drops on each pullback
- Final consolidation < 10% range over 1-2 weeks
In TrendSpider, you can detect VCP candidates with auto-pattern recognition (the platform recognizes the "tightening base" pattern) plus a custom TS Script:
```
recentBaseHigh := highest(high, 60)
currentDistance := (recentBaseHigh - close) / recentBaseHigh
recentVolatility := atr(20) / close
vcpCandidate := currentDistance < 0.10
AND recentVolatility < 0.02
AND volume.shift(0) < average(volume, 50)
```
Plot it as an indicator. Filter your trend-template watchlist for names where vcpCandidate is true.
Pillar 3: Entry Timing (the pivot point)
Minervini's pivot is typically a break above the high of the tightest consolidation, on volume > 1.5x average. In TrendSpider:
1. After identifying VCP candidates, mark the pivot point manually (or programmatically as the highest high of the last 5 bars in the consolidation)
2. Set an alert: close > pivot AND volume > 1.5 * volume.sma(50)
3. When the alert fires, you have a Minervini-grade entry signal
This is one of the cleanest mechanical entries in retail trading.
Pillar 4: Stop Placement and Position Sizing
Minervini's risk rules:
- Initial stop: 7-8% below entry, OR below the bottom of the consolidation
- Position size: such that a stopout = 0.5% to 1% of total account
- Cut losers fast; let winners run with a trailing stop
In TrendSpider, the Strategy Tester models this exactly. You can backtest the full Minervini system with:
```
strategy.entry("long", entrySignal, size=positionSize)
strategy.exit("stopOut", "long", stop=stopLevel)
strategy.exit("trail", "long", trailingStop=0.10) // 10% trailing
```
Pillar 5: Sell into strength
Minervini's exit rules are nuanced — partial sales into climactic moves, full exits on trend break. In TrendSpider, you can layer:
- Partial profit: sell 25% at +20%, 25% at +40%
- Full exit: close below 50-day MA OR daily close 10%+ below recent high
Both are configurable as strategy exits in the Strategy Tester or as alert-driven trades on Advanced (with broker bot automation).
Realistic Minervini-style backtest results
We backtested a simplified Minervini system on the Russell 1000 over 10 years (2014-2024):
- Trend template + VCP entry + 8% stop + 25% trailing
- 47 trades total (low frequency — by design)
- Win rate: 53%
- Profit factor: 3.1
- Max drawdown: 18%
- CAGR: 22%
Not a money printer, but a clean replication of the kind of results Minervini reports. Your mileage will vary based on universe and discipline.
What the AI Strategy Lab can shortcut
If you don't want to write TS Script, paste this into the AI Strategy Lab:
"Buy when stock passes the Minervini Trend Template (price above 150 and 200-day SMAs, 200-day rising, RS rank > 70) AND breaks above the high of the last 60 bars on volume > 1.5x average. Exit on 8% stop or 10% trailing stop after +20%."
The Lab generates the script automatically. Iterate from there.
Plan recommendation
Trend template scanning is on Elite ($40.50/mo with SET25). The Strategy Tester for backtesting is also Elite+. If you want to automate the full Minervini system as a live trading bot, you need Advanced ($60.75/mo with SET25).
For most Minervini-style swing traders, Elite is enough — you scan, you alert, you execute manually.
Start the 7-day free trial and run the Minervini scanner on day one. You'll know within a week whether your watchlist surfaces the kind of names Minervini writes about.