2. Mark Minervini's Trend Template: the 8 conditions of a strong trend

Level 4: Stock Screening

Mark Minervini is an American trader and investor, author of "Trade Like a Stock Market Wizard", who developed a systematic method known as SEPA (Specific Entry Point Analysis) to identify shares that are starting or continuing a strong uptrend. The centerpiece of that method, and the easiest part to program, is his Trend Template: eight conditions a share must meet all at once.

First condition: the current price must be above its 150-day and 200-day moving averages. It is the most basic confirmation that the share is, underneath it all, in a long-term uptrend.

Second condition: the 150-day moving average must be above the 200-day one. It is not enough for the price to be on top; the averages themselves have to be ordered the right way round, confirming that the long trend is consistent.

Third condition: the current price must also be above its 50-day moving average, the shortest of the three. It confirms that, on top of the underlying trend, the share is also in a more immediate uptrend.

Fourth condition: the 50-day average must be above both the 150-day and the 200-day. Again, the price alone is not enough: the three averages have to be stacked in the right order, from shortest to longest.

Fifth condition: the current price must be at least 30% above its 52-week low. This filters out shares that have merely bounced a little from a recent floor, without yet confirming a real uptrend.

Sixth condition: the current price must be within 25% of its 52-week high. This makes sure the share is trading near its recent highs, not halfway through a recovery that is still incomplete.

Seventh condition: the share's relative strength against the rest of the market (Relative Strength Rating) must be above 70 out of 100. It is a measure of how that share's price has behaved over the last year compared with every other one — Minervini is specifically looking for shares that are beating the market, not merely rising.

Eighth condition: the 200-day moving average must have been rising for at least a month — you check this by comparing today's value with the value some 20 sessions ago. To these eight conditions Minervini adds a practical liquidity filter: a sufficient average daily volume. Without enough liquidity, buying or selling a reasonably sized position moves the price against you, making the trade more expensive.

These eight conditions do not replace a full analysis — Minervini insists on combining them with company fundamentals, market context and risk management — but as a mechanical filter they are a perfect example of how to turn a discretionary trading criterion into something programmable.