Minervini stock criteria

N

nwoptions

Hi guys,

Have you heard of Mark Minervini's stock trend following system? Buy the stock when:

  1. The current stock price is above both the 150-day (30-week) and the 200-day (40-week) moving average price lines.

  2. The 150-day moving average is above the 200-day moving average.

  3. The 200-day moving average line is trending up for at least 1 month (preferably 4–5 months minimum in most cases).

  4. The 50-day (10-week) moving average is above both the 150-day and 200-day moving averages.

  5. The current stock price is trading above the 50-day moving average.

  6. The current stock price is at least 25% above its 52-week low (30% as per his book 'Trade Like a Stock Market Wizard').

  7. The current stock price is within at least 25% of its 52-week high (the closer to a new high the better).

  8. The Relative Strength ranking (RS ranking), as reported in Investor’s Business Daily, is no less than 70.
What do you guys think of this?
 
He's a modified Canslim guy,likes to see vol contraction and solid EPS growth with other fundamental metrics.Lightening fast on stops...

I have backtester it before,nothing special,but his guys typically place very high in Norm Zadehs trading challenge....

So it is a framework to work within and appears it's more art than science...
 
There is a trader who took Minervini's ideas and modified them to suit his needs and made a ton of money trading them. He has a Twitch channel and also posts some of his streams to YouTube. His track record is real, although I'm not sure how well he would perform in a bear market.

https://chartsandstories.com/start-here/

(I have no affiliation with him, and he doesn't run a paid service anyway, other than some ad revenue from his videos and streams).
 
AbbotAle said:
The number one tip I got from reading his 2 books was concentrate on stocks less than 5 years old (from their original IPO).

Probailities state that's where the bigger gains come from.
More...

What software lets you scan for ipo date?
 
I like Minervini...comes across as a regular guy that struggled and put in the effort to become a successful trader. Books are easy to read and great for any beginner IMO.

I read his first two books and watched his free webinars while taking notes. I still use several of his principles but the one that really stuck with me was his rule to never let a big win turn into a loss...cut it free at break even. I know that sounds stupid obvious but I have had good performing positions that I just grew accustomed to being green every day evaporate and then go red...something in my brain was convinced that since it had been so good to me for so long it will come back and they never did...The fact that all of the profits melted away is proof enough that something is wrong and it is time to exit.

I also joined MarketSmith after reading his books (and about CANSLIM)...and while it is a good service, I canceled because it didn't really offer enough over finviz and TWS screener to justify the price tag.

@nwoptions You have the entrance theory but don't forget about the exit...buying is easy compared to selling IMO.
 
nwoptions said:
Hi guys,

Have you heard of Mark Minervini's stock trend following system? Buy the stock when:

  1. The current stock price is above both the 150-day (30-week) and the 200-day (40-week) moving average price lines.

  2. The 150-day moving average is above the 200-day moving average.

  3. The 200-day moving average line is trending up for at least 1 month (preferably 4–5 months minimum in most cases).

  4. The 50-day (10-week) moving average is above both the 150-day and 200-day moving averages.

  5. The current stock price is trading above the 50-day moving average.

  6. The current stock price is at least 25% above its 52-week low (30% as per his book 'Trade Like a Stock Market Wizard').

  7. The current stock price is within at least 25% of its 52-week high (the closer to a new high the better).

  8. The Relative Strength ranking (RS ranking), as reported in Investor’s Business Daily, is no less than 70.
What do you guys think of this?
More...

I really enjoyed reading his books. They bring sense of clarity and inspiration. But as with many others - that feeling passes as you try to apply and figure out how much is missing and that you are likely looking at years of subscription for MarketSmith + chat rooms attempting to test it yourself and fill those gaps.

What you posted are not sufficient rules to complete a trading strategy.
They are just saying - find strong looking charts and trade them as you please. Which is a sure way to lose money unless you do further research to fill the gaps yourself.

Entry, exit, positing sizing, liquidity rules are all missing. And at the end of the day, he uses quite a bit of discretion when trading.
 
zghorner said:
I like Minervini...comes across as a regular guy that struggled and put in the effort to become a successful trader. Books are easy to read and great for any beginner IMO.

I read his first two books and watched his free webinars while taking notes. I still use several of his principles but the one that really stuck with me was his rule to never let a big win turn into a loss...cut it free at break even. I know that sounds stupid obvious but I have had good performing positions that I just grew accustomed to being green every day evaporate and then go red...something in my brain was convinced that since it had been so good to me for so long it will come back and they never did...The fact that all of the profits melted away is proof enough that something is wrong and it is time to exit.

I also joined MarketSmith after reading his books (and about CANSLIM)...and while it is a good service, I canceled because it didn't really offer enough over finviz and TWS screener to justify the price tag.

@nwoptions You have the entrance theory but don't forget about the exit...buying is easy compared to selling IMO.
More...

Thanks for the reply. I was thinking about combining his entry criteria with the following Investor Business Daily sell rules:

Take profit at 20-25%
Set a stop loss at 8% below the entry price.

Do these rules sound good to you?
 
AbbotAle said:
Good question, the only one I found was -

https://finviz.com/screener.ashx?v=111&f=ipodate_more5

it's not perfect but better than nothing.

Then, if you want to get the new IPOs from today (to add to a watch list) there are many IPO listing sites (including the Exchanges themselves). I use this one -

https://www.marketwatch.com/tools/ipo-calendar
More...

I changed the finwiz scan to less than 5 and added new highs as a signal. The only thing I had found before was www.stockfetcher.com where I set up a scan for last 8 years which is the IBD canslim reccomendation. There is no relative strength to an index on stockfetcher. www.chartmill.com has relative strength to an index. I have contacted them to see if they have an ipo year filter. www.MarketSmith.com does not have it. www.stockcharts.com uses rate of change to simulate relative strength to an index.
 
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