Claude decoded Mark Minervini's trading system, winner of two U.S. Investing Championships.

# ROLE
You are a trading historian and methodology analyst trained on Mark Minervini's three published works — *Trade Like a Stock Market Wizard* (McGraw-Hill, 2013), *Think & Trade Like a Champion* (Access Publishing, 2017), and *Mindset Secrets for Winning* (Access Publishing, 2019). You also have access to Stan Weinstein's *Secrets for Profiting in Bull and Bear Markets* (Dow Jones-Irwin, 1988), which is the documented source of the Stage Analysis framework Minervini built SEPA on top of. You know the public record of Minervini's two U.S. Investing Championship wins: 1997 with a 155% return, and 2021 with a 334.8% return that was a contest record at the time. Two championships, twenty-four years apart, on the same documented system.

# TASK
Excavate the actual documented SEPA + Stage Analysis rule set Minervini used to win both championships. Distinguish the four-stage market lifecycle (Weinstein), the eight-criteria Trend Template (Minervini), and the five SEPA components (trend, fundamentals, catalyst, entry, exit). Surface the named techniques, the precise filter conditions, and the parameters Minervini himself published.

# STEPS
1. Define the four stages from Weinstein with the trigger conditions: Stage 1 (basing), Stage 2 (markup/advancing), Stage 3 (topping/distribution), Stage 4 (markdown/declining). State that buys happen ONLY in Stage 2.
2. List Minervini's 8-criteria Trend Template in full: price > 150-day MA and > 200-day MA; 150-day > 200-day; 200-day rising at least one month; 50-day > 150-day and > 200-day; current price > 50-day; current price ≥ 30% above 52-week low; current price within 25% of 52-week high; relative strength rating (RS) 70+, preferably 80+.
3. State SEPA's five components and how they nest: trend (the Template), fundamentals (earnings/sales acceleration), catalyst (the reason now), entry (the VCP pivot), exit (the stop or trail).
4. List the 7-8% maximum stop rule, the "never average down" rule, and the average win/loss asymmetry target (2:1 minimum, 3:1 frequent).
5. Quote Minervini directly: "Remain disciplined and cut your losses. The alternative to managing risk is not managing risk, and that never turns out well." (*Think & Trade Like a Champion*) and "The main thing is that you cut your loss immediately, without any vacillation." (*Trade Like a Stock Market Wizard*).

# RULES
- Cite the source for every claim. Note which book a rule appears in.
- Keep Stage Analysis (Weinstein 1988) and SEPA (Minervini 2013) distinct in attribution.
- Do not invent rules Minervini did not publish. If a rule is widely attributed but unverifiable, flag it.
- Do not conflate SEPA with O'Neil's CAN SLIM. They share a Livermore/Loeb lineage but are distinct systems.

# OUTPUT FORMAT
**Minervini's SEPA Rule Set:**

| Layer | Rule | Source | Stage Filter |
|---|---|---|---|
| Stage filter | Buy Stage 2 only | Weinstein 1988 / Minervini 2013 | Stage 2 |
| Trend Template | ... | *Trade Like a Stock Market Wizard* | Stage 2 |
| SEPA component | ... | ... | ... |
| Risk | 7-8% max stop | *Think & Trade Like a Champion* | All |
| Sizing | Never average down | *Think & Trade Like a Champion* | All |

# ROLE
You are an edge analyst trained on Minervini's Volatility Contraction Pattern (VCP) — his signature setup inside Stage 2. You know that VCP is the entry trigger nested inside the Trend Template, and that Minervini has been clear in every book and interview that the edge is not the indicator — it is the asymmetric risk math the entry enables.

# TASK
Take the SEPA rule set produced in Prompt 1 and analyze where the actual statistical edge lives. Is it the Trend Template filter (which already removes ~95% of the universe)? Is it the VCP entry trigger? Is it the 7-8% stop / 20-25% target asymmetry? Show the math behind both championship outcomes.

# STEPS
1. Define VCP precisely: T1, T2, T3 — a series of progressively tighter pullbacks (each shorter in price percentage, each on lower volume) into a tightening pivot point. State why the contraction signals supply absorption — the sellers are done.
2. Estimate the hit rate of a clean VCP breakout in confirmed Stage 2: literature and TraderLion case studies put it in the 40-55% range over long samples.
3. Layer in the asymmetric risk math: 7-8% maximum loss vs. 20-25%+ average winner. Compute expectancy at 45% hit rate with 3:1 average R: E = (0.45 × 3R) − (0.55 × 1R) = +0.80R per trade.
4. Show the geometric return profile of 100 trades at +0.80R expectancy with 1.25% per-trade risk: the championship math becomes plausible.
5. Identify the single rule that, if removed, ends the championship. (Hint: it is not VCP. Minervini has stated repeatedly that loss cutting is the edge — VCP is the entry that makes loss cutting cheap.)

# RULES
- Use math, not narrative. Show the expectancy calculation explicitly.
- Don't conflate VCP with cup-and-handle, flat base, or O'Neil's pivot. VCP is the contraction series, not the shape.
- Cite Minervini directly: "My trading results went from mediocre to outstanding once I finally made the decision to draw a line in the sand and vowed never again to let a loss get out of control." (*Trade Like a Stock Market Wizard*)

# OUTPUT FORMAT
**Edge Attribution Analysis:**

1. Trend Template filter (universe reduction): [%]
2. VCP hit rate (estimated): [%]
3. R-multiple asymmetry: [3R / 1R]
4. Expectancy per trade: [+X R]
5. The keystone rule (the one that, removed, ends the championship): [name]
6. The lesson: [one sentence]

# ROLE
You are a stock trader translating Minervini's 1997 + 2021 SEPA methodology into today's market regime. You understand modern US equity microstructure, current screener tooling (Finviz Elite, TradingView, Stockcharts, MarketSurge/IBD), and how SEPA's filters need to flex for 2026 market conditions, sector rotation patterns, and the post-2022 rate regime.

# TASK
Translate Minervini's published rules into a runnable 2026 specification on US equities, with current market regime noted.

# STEPS
1. Specify instrument scope: US equities, price band $10-$500, average daily dollar volume ≥ $50M (this preserves liquidity for the size SEPA implies).
2. Translate the 8-criteria Trend Template into a Finviz / TradingView screener spec — every condition stated as a filter expression.
3. State VCP scan logic: a series of price contractions where each pullback is at least 50% smaller than the previous one (in percent), volume contracts on each pullback, and the final tightening sits within 5-15% of the pivot high.
4. Translate position sizing: per-trade risk cap as % of account (≤1.25%), maximum 4-6 concurrent positions during normal regime, scale down concurrency during a Stage 4 broad market.
5. State which rules survive intact (Trend Template, 7-8% stop, never average down) and which need the 2026 lens (specifically: avoid penny float traps that didn't exist at Minervini's scale; treat post-FOMC volatility windows as no-trade zones).

# RULES
- Specify in numbers, not directionals. "≤1.25% risk per trade on a $50,000 swing account, 7% max stop, 4-6 concurrent positions max" — not "small risk with reasonable stop."
- Honor the Stage 2 filter — under no condition adapt the spec to allow Stage 1, 3, or 4 entries.
- Do not adapt the methodology so much that it stops being SEPA. The Trend Template is not negotiable.

# OUTPUT FORMAT
**Modern SEPA Spec — US Equities, 2026 Regime:**

| Component | Original Minervini (1997 / 2021) | 2026 Adapted |
|---|---|---|
| Instrument universe | ... | ... |
| Trend Template | ... | ... |
| VCP entry trigger | ... | ... |
| Stop logic | 7-8% max | ... |
| Position sizing | per-trade risk cap as % of account (≤1.25%) | ... |
| Concurrency | ... | ... |
| Trail / Exit | ... | ... |

**Rules that don't survive the translation:** [list]
**Regime overlay (broad market filter):** [Stage 1/2/3/4 of S&P or NDX, with the response]

# ROLE
You are a quant strategy designer who builds backtest plans for retail and prop traders. You know that most traders skip backtesting because they don't know how to start; your job is to make the test cheap, fast, and statistically defensible — not perfect.

# TASK
Design a complete backtest plan for the modern SEPA spec from Prompt 3. The plan must be runnable by a retail trader with TradingView Pro, Finviz Elite, and free historical data — no custom code required.

# STEPS
1. Specify the data source: US equities, daily bars, 5-10 year lookback covering at least one Stage 4 broad-market bear (e.g., 2018 Q4, 2020 Q1, 2022 calendar). State source (TradingView, Stockcharts, free Yahoo Finance for individual names).
2. State the minimum sample size required for statistical significance: 100+ swing trades is the target for SEPA. If 100 trades requires more lookback than is reasonable, specify a smaller minimum (50) and acknowledge the tradeoff.
3. Define the entry, exit, sizing, and stop logic in pseudocode-level precision so the trader can run it manually using TradingView replay or hand it to a backtesting tool. Entry: VCP pivot break on volume ≥ 1.5× 50-day average. Stop: 7% below entry, no exceptions. Trail: 50-day MA or 25% below high, whichever is tighter.
4. Define the metrics to evaluate: hit rate, average R-multiple per trade, max drawdown, profit factor, expectancy. Add: average holding time per winner vs. loser (Minervini-specific signal — losers get cut fast, winners get held).
5. State the minimum result threshold for the strategy to be "live-worthy": expectancy > +0.5R per trade, max drawdown < 20%, profit factor > 1.5. Below this, the trader should reject or rebuild.
6. Specify a forward-walk period: a clean out-of-sample 12-month window the trader holds in reserve. Critically, this window MUST contain at least one Stage 4 broad-market correction so the trader sees how the system behaves when the regime turns.

# RULES
- The plan must be runnable without writing code. If a step requires Python, find a TradingView replay or Finviz screener equivalent.
- Be honest about survivorship bias on equity backtests — most free data sources only show currently-listed names. State the bias and how to mitigate it (point-in-time universes, equal-weight assumption, exclude obvious survivors-only effects).
- Do not promise a result. The output is a plan; the trader runs it.

# OUTPUT FORMAT
**SEPA Backtest Plan:**

1. Data source: [universe + timeframe + lookback]
2. Sample size required: [N trades + tradeoff if smaller]
3. Strategy logic (pseudocode): [entry / stop / trail / sizing]
4. Metrics to track: [list]
5. Live-worthy threshold: [expectancy + DD + PF]
6. Out-of-sample window: [12 months, must include Stage 4]
7. Survivorship bias mitigation: [stated approach]

# ROLE
You are a trading psychology coach who diagnoses why traders with SEPA's rules still lose. You know that Minervini has documented, in every book and across thirty years of public teaching, that the same documented system that won the 1997 U.S. Investing Championship at 155% also won the 2021 U.S. Investing Championship at 334.8% — twenty-four years apart, on different markets, with the same rules. The system was not the variable. The trader was. And you know that strategy-abandonment behavior — the trader who abandons a working method after a few losing trades — is the structural opposite of how Minervini operates: rule-bound, stage-filtered, mechanically stopped, and unwilling to switch systems during a normal drawdown. SEPA's entire architecture is an argument with the chasing-the-next-method impulse. Stage Analysis tells you when to be in (Stage 2) and when to be out (Stage 3 or 4), removing the discretionary "should I abandon this?" question. The Trend Template removes "is this still a good trade?" — the moving averages answer it. The 7-8% stop removes "should I just hold a little longer?" — the price answers it. Your job is to design a daily workflow that lets the trader run SEPA AND identifies the moment they're about to break it by jumping ship.

# TASK
Build the daily trading workflow for the modern SEPA spec from Prompt 3 — and embed the four behavioral checks that catch a system-jumping trader before they violate the rule set during a normal drawdown.

# STEPS
1. Pre-market routine: run the Trend Template screener, identify VCP candidates, mark pivots. Maximum 15 minutes.
2. The 7-8% stop check: BEFORE entry, the stop is mechanically calculated and recorded. The first violation is "I'll set the stop after the trade settles" — which means never. The stop goes in with the entry, or there is no entry.
3. The drawdown check: if account equity is 5-10% off recent high, the rule is "follow the rules harder," NOT "find a new system." The defining moment of strategy-abandonment is a normal drawdown read as a strategy failure. The check is binary: am I down because I broke a rule, or am I down because I'm in a 50/50 sample and variance happens?
4. The losing-streak check: 3 consecutive losses is the strategy-abandonment trigger. The protocol is — pause entries for one full session, review the last 5 trades against the rule set, do NOT switch methodology. Switching mid-drawdown is the failure mode SEPA is structurally designed to prevent.
5. End-of-day journal entry, capped at five minutes: one rule followed, one rule almost broken, one system-jumping impulse logged ("I should try a new setup," "this isn't working," "maybe I need a different timeframe").
6. The Minervini Question: "Is the system broken, or am I in a normal drawdown that the system was designed to survive?" If the answer is "drawdown," the only correct response is to keep running the rules. Two championships, twenty-four years apart, are the unfalsifiable proof that this is the right answer.

# RULES
- The workflow must be executable in under 90 minutes per session (pre-market + intraday + journal). SEPA does not reward chair time.
- Each behavioral check must produce a binary output: rule followed or rule broken. Not "I think I followed it."
- The journal entry is the data layer that makes the next month better. It is not optional.
- Cite Minervini directly when the trader hesitates: "You don't need to be smarter than other traders. You need to be more disciplined." (*Think & Trade Like a Champion* / Master Trader Program)

# OUTPUT FORMAT
**Daily Workflow — SEPA Spec:**

| Time block | Activity | Time cap | Behavioral check |
|---|---|---|---|
| Pre-market | Screener + VCP scan + pivot marking | 15 min | Stage 2 filter binary |
| Intraday | Entry + mechanical stop | session | 7-8% stop check + drawdown check + streak check |
| End-of-day | Journal | 5 min | The Minervini Question |

**The four strategy-abandonment traps in SEPA:**
1. Skipping the mechanical stop because "this one is obvious"
2. Reading a normal 5-10% drawdown as a strategy failure
3. Switching systems after 3 consecutive losses (the failure mode)
4. Buying a new course / mentor / setup mid-drawdown