Minervini Breakout Entry Rules
Entry Methodology
Mark Minervini's VCP breakout entry follows a strict sequence:
- Stage 2 confirmation via Trend Template (7-10 point filter)
- VCP pattern with contracting pullbacks and volume dry-up
- Pivot breakout on above-average volume
- Tight stop below last contraction low
Trade Price Derivation
signal_entry = pivot * (1 + pivot_buffer_pct / 100) # Buy-stop trigger
worst_entry = pivot * (1 + max_chase_pct / 100) # Buy-limit ceiling
stop_loss = last_contraction_low * (1 - stop_buffer_pct / 100)- Gate and sizing use worst_entry (worst-case fill price)
- R-multiples displayed for both signal and worst entries
- Take-profit always uses worst_entry base
Risk Rules
- Maximum risk per trade: 8% from worst-case entry to stop
- Default account risk: 0.5% per trade
- Portfolio heat ceiling: 6% total open risk
- Never chase > 2% above pivot
Rating-Based Sizing
| Rating Band | Score | Multiplier |
|---|---|---|
| Textbook | 90+ | 1.75x |
| Strong | 80-89 | 1.0x |
| Good | 70-79 | 0.75x |
| Developing | 60-69 | 0.0x (watch only) |
Entry Quality Checks (for breakout-monitor)
When confirming a breakout on 5-minute bars:
- close > pivot — Bar closes above the pivot level
- close_loc >= 0.60 — Close in upper 60% of bar range
- RVOL >= 1.5 — Time-of-day relative volume above threshold
- chase <= 2% — Price not more than 2% above pivot
Order Types
Pre-place Mode (stop-limit bracket)
- Place at market open, auto-triggers when price reaches pivot
- buy_stop = signal_entry, buy_limit = worst_entry
- Bracket includes stop-loss and take-profit
Post-confirm Mode (limit bracket)
- Wait for 5-min candle confirmation via breakout-monitor
- Limit buy at worst_entry after conditions verified
- Bracket includes stop-loss and take-profit
Stop-Loss Placement
- Primary: Last contraction low minus buffer (default 1%)
- Alpaca requires stop >= $0.01 below entry price
- Risk from worst_entry to stop must be <= 8%
Sources
- Minervini, M. "Trade Like a Stock Market Wizard" (2013)
- Minervini, M. "Think & Trade Like a Champion" (2017)
- TrendSpider VCP Detector public scanner implementation
- ChartMill Minervini strategy documentation