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Mark Minervini: the champion trader who cuts losses first

In 1997, a self-taught stock trader entered a real-money trading contest and won it. Ask what his books are mostly about, though, and the answer isn't picking winners. It's how small he keeps his losers.

Story · 7-minute read · Updated 2026-10-21

Who they were

Mark Minervini is an American stock trader and author. By his own account, he left school young and taught himself to trade, starting in the early 1980s with a small account.

He has said his first years went badly. He lost money and read everything he could find, including the work of William O'Neil and the old stock traders before him.

He trades mostly stocks, and mostly "growth" stocks: companies whose sales and earnings are rising fast.

What happened

1980s. Minervini spent years building and testing his rules. He studied what charts of big past winners looked like before their big moves. He has written that the turning point came when he focused on cutting losses rather than on being right.

1997. He entered the US Investing Championship, a contest where traders compete with their own real money over a year. He won with a reported return of 155%. That figure comes from the contest results as published by him and others; we couldn't check the original standings.

2001. He was one of the traders interviewed in Jack Schwager's book Stock Market Wizards.

2013. He published Trade Like a Stock Market Wizard. It sets out his method, which he calls SEPA, short for "Specific Entry Point Analysis." It also describes a chart shape he named the "volatility contraction pattern," where price swings get smaller and smaller before a Breakout.

2017 and 2019. He published Think & Trade Like a Champion and Mindset Secrets for Winning.

2021. He entered the contest again and won its top stock division, with a reported return of 334.8%, according to the contest's own announcement.

He also runs paid workshops and training. That's worth knowing when you read about him: much of the public material on his record comes from his own company.

The moment everyone remembers

The contest wins are the headline. Most people stop there.

But the part worth remembering is what he says made them possible. In his books, the very first job of a trader is to limit losses. He writes that he decides his exit before buying, keeps his average loss small, and never lets one loser grow into a disaster.

His point is about shape. If losses stay small and fixed, a few good trades can do a lot of the work. If one loss is allowed to grow, it can erase months of good ones.

What it teaches

1. Plan the loss, not just the win

Minervini's rule is simple to state: before you buy, know where you'll sell if you're wrong.

That's what a Stop loss is for. Put it where the chart would show your idea has failed, such as below the last place price turned around. See how to set a stop-loss.

2. Small losses make the math work

Here's why he cares so much. A 10% loss needs about an 11% gain to get back to even. A 50% loss needs 100%.

Check it with the loss recovery calculator. A math example, not a promise. Keeping each loss to a small, fixed slice of your account, about 1%, keeps you far from the deep end. Try the position size calculator.

3. Study past charts, carefully

Much of his method came from studying charts of past big moves. That's a kind of practice anyone can do.

Use bar replay to step through old charts one candle at a time, without peeking ahead, and log each "trade" you would have taken. See how to backtest a trading strategy and TradingView bar replay.

4. A breakout needs proof

A breakout is price pushing past a level. Many fail. Our rule is that a candle body must close past the level, not just a tail poking through. See breakout vs fakeout.

What it doesn't mean

It doesn't mean contest returns are realistic goals. A one-year contest rewards big, concentrated bets. Many entrants take huge risks, and we only hear about the winners. That's survivorship bias in its clearest form.

It doesn't mean his method will work the same for anyone. Growth stocks can fall very fast. Fast-rising stocks often have sharp drops too.

And it doesn't mean paid training is needed. The core ideas he writes about, small fixed losses, exits planned first, practice on past charts, are free to learn and practise.

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