Mark Minervini

Volatility indicates market risk; confirming low or acceptable volatility helps avoid being overexposed

Limits losses and preserves capital for repeatable opportunities

To manage drawdowns and protect capital while pursuing outsized returns.

To identify precise entry points and confirm leadership characteristics.

Keeps losses contained so winners can outweigh losers under a favorable R:R

Achieves a 3:1 reward-to-risk ratio when paired with a 5% stop, creating positive expectancy

Leaders are more likely to offer sustainable moves and clearer chart behavior

To find potential leadership and inefficiently priced opportunities for SEPA.

Compounding the edge by taking many independent positive-expectancy bets increases returns

Learning from outcomes improves future decision-making and discipline

To refine the process and learn from past trades.

More trials make expected profits more likely to materialize via the law of large numbers

Precise entries allow better risk control and repeatable execution

To determine true profitability rather than relying on raw reward-to-risk or win rate alone

Capturing peaks/lows is nearly impossible and unnecessary for long-term profitability

To reduce entry risk and know when a setup is invalidated.