THE TRADERS’ MAGAZINE SINCE 1982

www.traders.com APRIL 2021

Detecting High-
Volume Breakouts
Identify patterns in seconds 8

Swinging NCR
A breakdown of a recent
momentum swing trade 20

A Simple Forex
Trend-Following
Strategy
A strategy need not be
complicated 26

interview
David Cox 30

when not to short

Review this basic principle
of trend trading 40

product review
n2
 020 Superperformance
Workshop With
Mark Minervini
APRIL 2021
 Stocks & Commodities V. 39:04 (42–47): 2020 Master Trader Program: Superperformance Workshop With Mark Minervini by Leslie N. Masonson
PRODUCT REVIEW

2020 Master Trader Program:

Superperformance Workshop
With Mark Minervini
MINERVINI PRIVATE ACCESS, LLC this magazine as well as information ally, was sponsored by MarketSmith,
Product: Master Trader Program about him found on his website at an Investor’s Business Daily (IBD)
Superperformance Workshop minervini.com.) product, and by Minervini Private
Email: Workshop@minervini.com According to Minervini, his trading Access, a subscription-based daily
Contact: Bob Weissman, 917 268- approach includes pinpointing strong live trading service for those inter-
1800 stocks in uptrends, buying the cream- ested in receiving up-to-the-minute
Website: Minervini.com of-the-crop highest relative strength stock and market analysis daily from
Price: $5,000 stocks near 52-week highs, and im- Mark Minervini and his team in real
mediately cutting losses. He avoids time. The former offers an online
by Leslie N. Masonson weak stocks and bottom-fishing. equity-focused platform that provides

O
analysis capabilities using the prin-
ver the past 37 years, Mark Background on workshop ciples of William O’Neil, founder and
Minervini learned the keys to Minervini has hosted his Master chairman of IBD. (See my review of
profitable trading by studying Trader Program for the past 10 years MarketSmith in the October 2020
over 10,000 best-performing and it’s now in its 11th year, with issue of this magazine.)
stock charts and developing hard- the 2021 workshop scheduled for In past years, the event was held
and-fast trading rules, all of which November 13–14 & 20–22, 2021. over a concentrated three-day period
helped to catapult him from novice Due to the coronavirus pandemic, the in Myrtle Beach, SC. This time, in
to supertrader. He states that his suc- 2020 workshop was the first one to be November 2020, it was a virtual
cess in trading comes from following held in an online virtual format. (The event over Zoom with attendees from
specific trading rules using simple 65 countries. Bob Weissman from
bar charts. His methodology includes Minervini Private Access was the
stage analysis combined with a tech- This 30-hour program event coordinator. He ensured it went
nical/fundamental approach. provided Minervini’s off smoothly, on schedule, with no
Minervini won the US Investing 37-year time-tested glitches that I noticed.
Championship in 1997 with a gain approach to successful Prior to the webinar’s start, Weiss-
of 155%. Furthermore, he achieved trading and investing in man emailed attendees a 446-page
a remarkable average return of the stock market. workbook as a PDF file containing
220% per year from 1995 through all of the pertinent presentation
2000—that’s a 34,000% total return. material in two volumes (Figures 1
He was one of the traders featured 2021 workshop is also scheduled to and 2 show the key subject areas).
in Jack Schwager’s Stock Market be virtual.) The program workshop This encompassed over 200 pages of
Wizards: Interviews With America’s costs $5,000 and is designed for both charts, diagrams, tables, and bullet-
Top Stock Traders. new and experienced traders looking pointed key points, rules, and more.
Minervini himself is the author for a consistent approach to making All those attending had to agree to
of three books about his trading money buying individual stocks. keep the material confidential for
principles, and his latest book is The workshop offers Minervini’s their own use.
on peak performance. (For more methodology, principles, insights, The 2020 event was held over two
about Minervini’s background and and guidance. weekends—November 14–15 and
trading approach, see my interview The 2020 workshop, held in Novem- 21–22, 2020, and on one weekday,
with him in the June 2020 issue of ber 2020 and which I attended virtu- November 23, 2020. That day was

Copyright © Technical Analysis Inc. www.Traders.com

 Stocks & Commodities V. 39:04 (42–47): 2020 Master Trader Program: Superperformance Workshop With Mark Minervini by Leslie N. Masonson

devoted to watching for the methodology.

Minervini trade his best Minervini was an early
candidates using his user of Daily Graphs,
disciplined rules. On IBD, and MarketSmith.
the weekend days, the Moreover, Minervini
program ran from 9 am contributed three “trend
to about 1 pm, and was templates” to the plat-
then rebroadcast later the form (Figure 3). Users
same day from 6 pm to 10 of MarketSmith can
pm for the convenience add to Minervini’s tem-
of the worldwide audi- plates or develop their
ence in different zones. own criteria. Minervini
Attendees could also designed his criteria to
choose to rewatch the FIGURE 1: WORKSHOP TOPICS, PART ONE. The key subjects taught in the help identify his “power
later broadcast for rein- first half of the workshop kick off with Minervini’s SEPA methodology, followed play” trade setups and
forcement. These ses- by a review of fundamentals, pivot points, time compression, and the well-known
“early turners” as well
cup-with-handle pattern, which was first described by William O’Neil.
sions were not available as to identify stocks
to attendees for viewing in confirmed uptrends
after November 22, nor that meet his “stage 2”
were they available as a criteria.
recording. On the workshop’s
Questions and an- weekend days, Min-
swers were addressed in ervini was joined by
separate sessions on No- special guest instructor
vember 17 and 19, with David Ryan, three-time
replays on November US Investing Champion-
18 and 20, respectively. ship winner and devotee
This approach permit- of William O’Neil. Ryan
ted the live weekend worked under O’Neil’s
morning material to be tutelage for many years,
presented without inter- FIGURE 2: WORKSHOP TOPICS, PART TWO. The second part of the workshop learning about O’Neil’s
builds on the first by identifying bases, power plays, squats, selling rules and climaxes,
ruption with a predefined the daily routine, and an emphasis on risk management and position sizing.
C-A-N-S-L-I-M meth-
completion time. Ad- od. Ryan has 45 years of
ditional questions were market experience, so his
taken during the No- insights were welcomed.
vember 23rd live trading Also joining a few of the
session from 8:30 am to sessions with his insights
4:00 pm. was Mark Ritchie II, a
Minervini uses the prior graduate of this
MarketSmith platform to program and now part
prepare watchlists of pur- of Minervini’s team.
chase candidates from According to Ritchie,
specific scans he created, he became a successful
using MarketSmith’s trader by following the
comprehensive database principles taught in the
and analytical capabili- program, and Ritchie
ties. Minervini highly was profiled in one
recommends the Mar- of Minervini’s books,
FIGURE 3: TREND TEMPLATES. Three trend templates developed by Minervini and
ketSmith platform along found in the MarketSmith program can be used to help isolate the best-performing
Momentum Masters: A
with his books to have stocks meeting stringent criteria. Screens can also be customized with fundamental Roundtable Interview
a complete package and technical criteria and saved as custom templates in the program. With Super Traders With

Copyright © Technical Analysis Inc. www.Traders.com

 Stocks & Commodities V. 39:04 (42–47): 2020 Master Trader Program: Superperformance Workshop With Mark Minervini by Leslie N. Masonson

Minervini, Ryan, Zanger leaders, institutional

& Ritchie. favorites, cyclicals, and
On November 23 of turnaround situations.
the workshop, which Thirteen charts were
was a weekday, Irusha highlighted showing the
Peiris, CMT and pre- price action of stocks
mium group manager in different categories.
at MarketSmith, joined Then Minervini pin-
the discussion and high- pointed the important
lighted some of Mar- criteria that the best
ketSmith’s features. and worst candidates
had shown, with a focus
Weekend morning on valuation, and with
sessions charting examples.
Throughout the four Considerable time was
morning weekend ses- FIGURE 4: LULULEMON, 2010–2014. You can see a buy point in early December spent on the concept of
sions, I found that Min- 2010 as the stock breaks out to new highs out of a multimonth base on increased the stock price matura-
ervini and Ryan com- volume into a stage 2 accelerating uptrend. Then LULU stalled in March 2012 (stage tion cycle, described as
mented on the presenta- 3), going sideways for months before collapsed in January 2014 (stage 4 ). having stages 1 through
tion’s slides with insight- 4. Minervini learned
ful remarks. All charts displayed were this concept from its developer, Stan
in the simple open-high-low-close The workshop Weinstein, whom he met in 1990.
format from previous time periods offers Minervini’s How to ascertain a change in stage
and demonstrated the characteristics was clearly spelled out by providing
that illustrated the points they were
methodology, explicit transition criteria based on the
discussing. Minervini mentioned that principles, insights, stock being above a group of moving
he prefers bar charts to candlestick and guidance. averages and increasing higher highs
charts because of their simplicity. in price. The importance of trading
Minervini instructed about 75% of the any challenges in comprehending the with the trend was hammered home
time with Ryan providing his input material and following the discussion. throughout all weekend sessions.
for the remainder. Their interchange Since no questions were allowed dur- Minervini then provided a trend
was enlightening and they worked ing the morning sessions, the speak- template with eight key criteria to
well together. ers were able to move at a good pace identify the “stage 2 uptrend,” which
As each subject was introduced, without being sidetracked. he considers crucial to buying a stock
it was explained with appropriate The first weekend session on No- at the right price. These criteria
charts showing the concept being vember 14 began with the introduc- include a stock surpassing a group
described. The quality of the slides tion of the SEPA system (Specific of four common moving averages
in the presentation was excellent from Entry Point Analysis), which was de- that are above each other, being a
the standpoint of readability, ease of veloped by Minervini and is the basis percentage above its 52-week low,
understanding, and logical sequenc- of his trading philosophy. Its goal is and being within a certain percentage
ing. The use of colored bar charts obtaining big gains, minimizing risk, of its 52-week high and high relative
and MarketSmith charts using daily and maximizing compounding. The strength ranking. The chart in Figure
price bars, moving averages, volume method teaches that the way to ac- 4 of Lululemon demonstrates a stock
bars, buy and sell points, stops, and complish those goals is by being very coming out of a base, hitting a new
other components were very helpful selective in the stocks to purchase, high and then accelerating higher,
in quickly identifying all the key employing exacting trade execution, then entering stage 3, and finally, col-
elements to consider. and managing positions once they lapsing in stage 4. This template is one
Clearly, the presentation was care- are in place. Next up was an in-depth of the three included in MarketSmith
fully prepared beforehand to make discussion of the key characteristics that were developed by Minervini.
sure the key points were all covered in of the types of companies that could Figure 3 shows how to locate the
a coherent fashion. I didn’t experience be considered for purchase: market template in MarketSmith.

Copyright © Technical Analysis Inc. www.Traders.com

 Stocks & Commodities V. 39:04 (42–47): 2020 Master Trader Program: Superperformance Workshop With Mark Minervini by Leslie N. Masonson

The next subject area focused on signals and breakout criteria were General rules for selling or reduc-
fundamentals, including earnings depicted in multiple charts. ing a swing trade were provided
estimate revisions, the critical im- Bearish signal criteria were then with separate rules on selling into
portance of earnings acceleration to explored with examples to show strength or weakness. Moreover,
future stock performance, breakout traders how to become aware of this was followed by a discussion of
earnings, earnings report evaluation these negative market signals. The 17 sell alert criteria to be cognizant
criteria, and earnings surprises. The commonalities of the bearish action of. Then Minervini’s daily routine
importance of increasing profit mar- on all the charts were made crystal was discussed, focusing on evening
gins was illustrated on charts show- clear. preparation screening and handling
ing price performance compared to The November 21st morning ses- the upcoming pre-market. The end-
profit margin growth. In summary, sion covered multiple topics including of-the-day segment was titled “Put-
Minervini clearly explained the im- how to identify a primary base after ting it All Together,” which brought
portance of having the earnings per an IPO (initial public offering), the home the key points of the day.
share, revenue, and profit margins power play (which is an explosive The last weekend day’s session on
growing at double digit rates. The move on big volume due to news November 22, 2020, covered the criti-
last few subjects covered at day’s of some kind), squats (a breakout cal topic of risk vs. reward in depth
end were stocks emerging early from attempt), and reversal recoveries. and turned out to be the icing on the
bear markets, stocks hitting new high Minervini mentioned that he has cake of all the formal presentations.
ground, and what stock action to look 20,000 pages of model books of the I felt as though this in-depth session
at during a correction to identify early best-performing stocks and IPOs, conducted by Minervini alone was
winners once the correction is over. worth the price of admission. Many
The second weekend session kicked traders fail to understand or manage
off with a discussion of Minervini’s The last weekend their risk controls, leading to poor
signature volatility contraction pat- day’s session covered results.
tern or VCP, as he coined it. This the critical topic of Here, Minervini covered the sub-
refers to a stock’s price tightness on risk vs. reward in ject of buy and sell rules, the climax
the right side of the chart just before depth and turned out run, the daily routine, controlling
an explosive move higher. This pat- to be the icing on the your trade, monthly trade tracking,
tern occurs over 95% of the time, so win/loss ratios, stop management,
cake of all the formal
traders need to pay attention to look tracking your trading results, building
for it. The VCP occurred in virtually
presentations. position size and guidelines, using
all the greatest stock performers; that a trading report card, trading and
is why Minervini uses it as a bedrock and has ingrained the key patterns contingency planning, 14 key trad-
principle. Supply and demand were in his head (since they are similar) ing rules, and finally, eight keys to
reviewed with numerous charting so that he instantly recognizes them superformance.
examples, pinpointing the VCP and on current charts.
the exact buy points. Ritchie participated in this session Trading day
Next up was identifying pivot as a speaker. He provided his own As mentioned, the only weekday of
points (buy points) and how to time insights on how he trades the market the workshop was dedicated to live
the entry, followed by how to buy following Minervini’s principles. trading examples. For this session,
at higher and higher pivot points A list of seven specific sell rules which was on Monday, November
within a base. Minervini’s signature were provided so that traders can 23, 2020, from 8:30 am to 4 pm,
“cheat and low cheat” and key buy identify stocks topping. This is criti- Minervini projected an eSignal
points were shown on multiple charts. cal to not overstay your welcome as screen with multiple watchlists, buy
Natural versus unnatural price reac- the market can change direction with alerts, key market averages, and
tions and bounces were explained violent moves down when the good some ETFs. The first trade made
and illustrated. The importance of times end. This encompasses count- was in a TDAmeritrade account that
holding a stock through a normal ing the number of bases in the stage 2 displayed with a $1 million balance.
shakeout was explored so that large run-up, climax price action, reversals, He used an additional screen (which
gains are not missed. The four key churning, and volume considerations, wasn’t displayed) for execution via a
points about bullish confirmation among others. TradeStation account.

Copyright © Technical Analysis Inc. www.Traders.com

 Stocks & Commodities V. 39:04 (42–47): 2020 Master Trader Program: Superperformance Workshop With Mark Minervini by Leslie N. Masonson

After commenting on each section the lookout for the “blue dot” feature of the volume. They were addressed
of the screen and its data origins, on a chart during a bear market to in separate sessions between the two
he waited for the market open to pinpoint a potential bottom, and weekends. Weissman selected and
assess the opening activity and to looking for stocks with new highs read the questions and Minervini
identify any buying opportunities, on the relative strength line. and/or Ryan responded. The ques-
which would be stocks on his lists Minervini spent time reviewing tions were restricted to the subjects
that are coming out of bases and are his parameters for a number of his previously discussed in each morning
big movers. As the day progressed, stock screens. He showed one screen session, since many other questions
Minervini made a number of pur- with his specific criteria for earnings would likely be answered by the end
chases that worked out well and one per share, sales and profit margin of the last day.
or two that he closed out with small acceleration, relative strength rating, Many of the questions from attend-
losses. Overall, he had a positive day. minimum current price, percent off ees posited hypothetical situations
He was clearly robotic in his trade price high, and average volume of a that wouldn’t be under consideration
management and execution, that is, certain time period. as a possible trade in Minervini’s
he followed his entry and exit rules Ryan spent time spelling out how method since they did not meet the
exactly. No emotion was evident, he goes about selecting a stock, the criteria that were set. Ryan bluntly
even with a 25% gain on GRAY from criteria he uses, and what he has underscored this principle when he
an early morning entry on that day. learned about trading discipline. said: “Never buy a stock in a stage 4
True to his described methodology, He urged attendees to not give up downtrend.”
he seemed to wait for the right time
and then acted. He stated that if no Assessment of workshop
trades meet his criteria he does not I found that the In total, this 30-hour program pro-
trade, and he mentioned that happens Master Trader Program vided Minervini’s 37-year time-tested
some days. He does not force trades Superperformance approach to successful trading and
for the sake of trading. Workshop provided investing in the stock market. Even
David Ryan, Mark Ritchie II, the methodology though roughly half of his trades lose
and Irusha Peiris all participated to necessary to be money, the other half are winners,
some extent in the day’s event with which more than makes up for the
Minervini leading the commentary.
profitable. losses. He shows how he tilts the odds
He answered additional attendee to at least 2:1 upside with appropriate
questions during slow periods in the on stock trading just because they risk management techniques. His key
market and stressed the importance had a few losing trades. Instead, he to success is securing relatively large
of following the rules and not forc- suggested keeping those stocks on profits on the winners while keeping
ing a trade. He also commented that a watchlist to see if they become the losers small.
trading is all about skill and timing buyable candidates if they meet the The entire Minervini methodol-
and that a trader should become a rules. He mentioned that every trader ogy is provided in this program with
specialist in learning how to use should keep a logbook of trades and nothing held back. Anyone new to
MarketSmith in combination with concentrate on what they did wrong trading, as well as experienced trad-
the principles taught during the two so that corrective action can be taken. ers who are not performing to the
weekend sessions. He stressed that Otherwise, the same mistakes will be level they wish, could benefit from
it’s not necessary to use indicators made over and over again. According this workshop. He emphasizes that
such as stochastics or MACD or to Minervini and Ryan, emotions there is no “holy grail” to impart.
even candlesticks. He stated that us- must be taken out of the equation or Minervini recommends that those
ing bar charts and keeping it simple the process won’t work. traders following his approach should
does the job. not try to change his rules or weave in
Peiris gave a short tutorial on Question & answer contradicting strategies from outside
weekly charts, and Ryan described sessions sources, as this will not only dilute
the CANSLIM approach with some Each of the weekend morning ses- the method but may even result in
chart examples, then pinpointed a sions produced hundreds of ques- unfavorable results.
few features of MarketSmith that he tions from attendees, with many Although the $5,000 price of this
found most useful, such as being on that could not be answered because program is substantial, most traders

Copyright © Technical Analysis Inc. www.Traders.com

 Stocks & Commodities V. 39:04 (42–47): 2020 Master Trader Program: Superperformance Workshop With Mark Minervini by Leslie N. Masonson

will lose much more than that over Stocks & Commodities, Volume
a trading lifetime or even on just The entire Minervini 38: October.
one trade, and that can be weighed methodology is provided Minervini, Mark [2017]. Think &
against the value provided, which in in this program with Trade Like A Champion: The
my view is substantial. Interestingly, a Secrets, Rules & Blunt Truths Of
number of attendees have repeated the
nothing held back. A Stock Market Wizard, Access
workshop six or seven times over the Publishing Group LLC.
years, even though they are already they keep their emotions out of the [2013]. Trade Like A Stock
very good traders, according to Min- equation. Market Wizard: How To Achieve
ervini. It suggests they find value in Super Performance In Stocks In
the workshop and use it to reinforce S&C Contributing Writer Leslie Any Market, McGraw-Hill.
their skills. Minervini reminds us of N. Masonson is president of Cash [2015]. Momentum Masters:
the importance of skill reinforcement Management Resources, a financial A Roundtable Interview With
and that learning the nuances can consulting firm that focuses on ETF Super Traders With Minervini,
have good payoffs. strategies. He is an active ETF trader, Ryan, Zanger & Ritchie II, Access
I have attended many expensive and the author of Buy—Don’t Hold: Publishing Group LLC.
trading programs over the last 30 Investing With ETFs Using Relative [2019]. Mindset Secrets For
years, and I found that most do not Strength To Increase Returns With Winning: How To Bring Personal
provide the value or content expected. Less Risk; and All About Market Power To Everything You Do, Ac-
And certainly, they typically did not Timing, as well as Day Trading On cess Publishing Group LLC.
provide a complete program with all The Edge. His website is https:// Moore, Sean [2011]. “MarketSmith,”
the nuts and bolts needed to master buydonthold.com, where he writes a Quick-Scan, Technical Analysis of
the markets. I found the Master monthly blog. He can be reached at Stocks & Commodities, Volume
Trader Program Superperformance lesmasonson@yahoo.com. 29: September.
Workshop to be an exception, as it O’Neil, Willian J. [2009]. How To
provided the entire methodology Further reading Make Money In Stocks: A Winning
necessary to potentially be profit- Masonson, Leslie N. [2020]. “The System In Good And Bad Times,
able. It does this by laying out all Keys To Success With Mark 4th ed., McGraw-Hill.
the essential steps, rules, buy and Minervini,” interview, Technical Penn, David [2001].: “William J.
sell criteria, selection screening vari- Analysis of Stocks & Commodi- O’Neil,” interview, Technical
ables, and rationale that any novice ties, Volume 38: June. Analysis of Stocks & Commodi-
or experienced trader can implement [2020]. “MarketSmith,” prod- ties, Volume 19: October.
and work to replicate—as long as uct review, Technical Analysis of

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