Mark Minervini

Full name of SEPA, the main framework Minervini centers his decision process on.

Design trades with a favorable profit-to-risk ratio (preferably 3:1, minimum 2:1) so average winners outweigh losers.

Small controlled losses and larger, less-frequently captured gains can produce outsized returns even with modest win rates.

Prioritize an optimal, repeatable return target rather than chasing the biggest possible single gain, because repeated moderate wins compound effectively.

The cost of tying capital to a long-shot large gain is the lost potential from taking multiple smaller, more probable gains.

Over many independent trials, outcomes will converge towards expected probabilities, reducing variance of average result.

Treat stock selection, market timing, risk management, journaling, and education as a single operating system.

Viewing disparate trading skills as connected parts of one system rather than separate competencies.

Illustrates how multiple smaller gains compounded can rival or exceed a single large gain

Connects win rate (around 50%) with the need to manage gain capture and loss containment to create an edge.

Repeat favorable bets often to compound the edge; more iterations of a positive expectancy improve returns.

If you have a positive expectancy, increase the number of independent opportunities to realize that edge over time.

Profitability depends on average reward relative to risk combined with win rate, not solely on being right more than wrong.

Average profit per trade computed from win rate and win/loss sizes; positive expectancy yields long-term profit.

Trying to buy absolute lows or capture peaks is unnecessary, rarely possible, and not the optimal focus for traders.

Use rules and position sizing to control risk and protect capital.

Contain losses quickly while allowing gains to develop so the upside is captured without excessive drawdown.

Regularly review and refine process, charts, and decisions to improve performance.