Stock market wizard Mark Minervini’s trading strategy won him the U.S. investing championship.

Mark Minervini’s Trading Strategy

Mark Minervini is known for trading fast-moving growth stocks while implementing a concrete entry and exit strategy. Minervini believes that timing your trades is critical and recommends you combine technical analysis, fundamental analysis, and risk management.

Mark Minervini is famous for trading the volatility contraction pattern (VCP). The VCP pattern was popularized by the famous traders Jesse Livermore, William J. O’Neil, and Richard D. Wyckoff. He is also known as one of the stock market wizards mentioned in Jack Schwager’s book Market Wizards: Interview With Top Traders.

Mark Minervini’s trading strategy allowed him to win multiple U.S. investing championships. In 1997, Minervini put up $250,000 of his own money and generated a 255% annual return winning the U.S. Investing Championship. He entered again in 2021, this time in the $1,000,000 category, and won with an audited 334.8% annual return.

What is the Volatility Contraction Pattern (VCP)?

The overall premise behind the VCP is that stocks in long-term trends will eventually consolidate as investors take profit and more stock is accumulated by buyers. This pattern applies across any time frame, even for day traders, so it is worth learning regardless of your trading style.

However, Minervini warns against mixing up different styles of trading. Instead, he recommends that you pick one type and become a specialist in it. For example, some traders prefer day trading, while others prefer swing trading.