Mark Minervini, a renowned figure in the world of trading, has left an indelible mark with his innovative approach to market analysis.
At the core of his methodology lies the Trend Template, a powerful tool designed to identify strategic buying and selling opportunities in the stock market.
The Visionary Behind the Trend Template
Mark Minervini, a successful stock trader and author of Trade Like a Stock Market Wizard, has gained widespread recognition for his exceptional achievements in the financial markets.
His journey from a small trading account to winning the U.S. Investing Championship attests to the effectiveness of his trading approach.
Minervini's dedication to continuous improvement and disciplined trading has solidified his status as a trading legend.
Unlike traditional trading strategies that rely on a single indicator or methodology, the Trend Template integrates various elements to provide a holistic view of market trends and potential trading opportunities.
At its essence, the Trend Template seeks to identify and capitalize on stocks in strong, sustainable uptrends while avoiding those in downtrends.
Components of the Trend Template:
Technical Analysis: A stock initially qualifies when…
price is above the 50MA, the 150MA and the 200MA;
the 150MA is above the 200MA;
the 200MA has been trending up for at least 1 month and preferably 4-5 months;
the 50MA is above both the 150MA and the 200MA;
price is a minimum of 30% above the 52 week low but preferably 100-300% or greater before breaking out from a solid consolidation;
price is within 25% of the 52 week high or preferably even less;
the IBD (Investors Business Daily) proprietary relative strength ranking is no less than 70 and preferably in the 80s or 90s. See note below.
Fundamental Analysis: Incorporates fundamental factors such as earnings growth, sales growth, and profit margins.
Aims to identify stocks with strong underlying financials, adding a fundamental dimension to the analysis.
Risk Management: Implements strict risk management practices to protect capital.
Focuses on minimizing losses and maximizing gains through well-defined risk-reward ratios.
Position Sizing: Determines the size of each position based on risk tolerance and overall portfolio strategy.
Aims to optimize portfolio allocation for enhanced risk-adjusted returns.
Catalysts and News Events: Considers external factors, news events, and catalysts that may impact stock prices.
The Trend Template is a comprehensive approach to market analysis well worth the attention of every serious stock trader and investor.
NOTE: Be aware that the ActionAlerts trend template screener does not use the IBD relative strength ranking, which is only available to its subscribers.
Instead it uses a modified version that closely mimics it. But you are advised to check recent relative strength manually.
Get alerted on my private Telegram Channel when stocks are newly qualified: