Momentum Masters
Momentum Masters
A Roundtable Interview with Super Traders
Mark Minervini, Dan Zanger, David Ryan, and Mark Ritchie II
Access Publishing Group, LLC
[email protected]
Copyright © 2015 by Mark Minervini. All rights reserved. This book, or parts thereof, may not be produced in any form without permission from the publisher; exceptions are made for excerpts used in printed reviews and other media-related materials as long as proper attribution is made. The publisher and the authors make no representations or warranties with respect to the accuracy or completeness of the contents of this work and specifically disclaim all warranties, including without limitation warranties of fitness for a particular purpose. No warranty may be created or extended by sales or promotional materials. The advice and strategies contained herein may not be suitable for readers’ situations. Readers should consult with a professional where appropriate. Neither the publisher nor the author shall be liable for any loss of profit or any other commercial damages, including but not limited to special, incidental, consequential, or other damages. ISBN 978-0-9963079-0-1 (pbk) ISBN 978-0-9963079-1-8 (ebk) Printed in the United States of America First Edition 10 9 8 7 6 5 4 3 2 1
Contents The Why and How of This Book Meet the Momentum Masters SECTION ONE Introduction SECTION TWO Stock Selection SECTION THREE Position Sizing SECTION FOUR Technical Analysis SECTION FIVE Fundamentals SECTION SIX General Market SECTION Seven Entry Criteria SECTION EIGHT Risk Management SECTION NINE Trade Management
SECTION TEN Psychology SECTION ELEVEN Final Thoughts
The Why and How of This Book Throughout his career, Mark Minervini has been approached by countless traders, from novices to veterans, with questions about how to achieve success in the stock market. Many of these knowledge seekers learned about Mark when he won the U.S. Investing Championship in 1997, or later when they read about him in Jack Schwager’s bestselling book Stock Market Wizards: Interviews with merica’s Top Stock Traders.
Since then, Mark’s trading fame has exploded with the 2013 publication of his first
book,
Trade
Like
a
Stock
Market
Wizard:
How
to
Achieve
Superperformance in Stocks (McGraw-Hill). A distillation of wisdom gained
from Mark’s 30 years of trading high-momentum stocks, Trade Like a Stock arket Wizard became an immediate bestseller among investment titles and
sparked a huge following, including more than 100,000 Twitter followers. Three-time U.S. Investing Champion David Ryan declared Trade Like a Stock arket Wizard to be “the most comprehensive work I have ever read on
investing in growth stocks.” Despite its depth and breadth, Trade Like a Stock Market Wizard stoked stoked rather than satiated traders’ hunger for knowledge. In the two years following the book’s publication, readers flooded the office of Minervini Minervini Private Access with nearly a thousand questions. Some queries delved further into topics covered in the book, while others sought to explore new territory. It dawned on us that Mark’s readers—including many of you reading this now—had entrusted us with a real treasure trove. Drawing on their own hard-earned trading experiences, readers collectively had furnished us with an incredibly detailed and wide-ranging inventory of the real-world challenges and knowledge gaps confronting traders. We then asked a question of our own: How should we respond to this windfall? I suggested to Mark that he answer many of these questions in a book.
Mark replied, “I have an even better idea. Why don’t we ask some of the best stock traders I know to answer these questions with me?” Mark reached out to his friends David Ryan, Dan Zanger, and Mark Ritchie II, three of the most successful stock traders in America. They enthusiastically agreed to participate, and project Momentum Masters was under way. Momentum Masters takes a unique approach. We chose 130 of the most
relevant questions submitted to our office and organized them by category into related sections. I want to emphasize that these questions were submitted by real traders confronting real issues in the stock market. There are no questions based on our opinions or ideas of what traders might be interested in knowing. The format of Momentum Masters also parts company from most trader interview books in a fundamental way. Instead of dividing dividing the interviews into separate chapters for each market master, Mark, David, Dan, and Mark II answer each question in a roundtable format, allowing the reader to compare and contrast. Now if I may, may, let me give give you a heads-up heads-up before before you dive dive in. First, Momentum Masters offers no colorful biographical details, literary flourishes, or other diversions with which many market books, including some excellent ones, try to “spice up” or lighten the material. This book is all meat; questions and answers all pertain to trading. Second, as you read through the questions and answers, take note of the differences as well as the common characteristics among the four masters. As I said, the format was chosen deliberately to facilitate comparisons. comparisons. David Ryan, a 40-year trading veteran, and Mark Minervini, with more than 30 years’ trading experience, favor fast-growing small- and mid-cap stocks. Dan Zanger, a 25ear trader, prefers the larger-cap stocks and even mega-cap names. Mark Ritchie II, the youngest of the group, won the Triple-Digit Challenge at the first of the annual Mark Minervini Master Trader Program workshops in 2010. The challenge was to become the first attendee to return 100% using what was learned on his or her trading account. Ritchie II did it—achieving triple-digit performance—in performance—in less than six months. During the subsequent five years,
Minervini has closely watched Ritchie deliver consistently superior trading performance. He told me, “Ritchie is a Momentum Master in the making and should be included in this book.” To succeed as a stock trader, you need to learn what to buy, when to buy, and when to sell. More importantly, you will need to match your own trading style to our psychology and strengths and learn how to improve your weaknesses. As ou compare and contrast the answers to each question, keep a sharp eye for the fundamental practices and core principles that these traders share. These nuances are the similarities between highly successful Momentum Masters. Through the diverse insights, acumen, and trading experiences of the four masters, readers will attain an education in trading like none other—and all grounded in the areas that interest them most. So there you have it. A plethora o knowledge now awaits you. Good reading and best of success on your own ourney to greater returns with less risk. Bob Weissman Editor
Meet the Momentum Masters MARK MINERVINI Mark is the author of the bestselling book Trade Like a Stock Market Wizard: ow to Achieve Superperformance in Stocks in Any Market . Starting with only a
few thousand dollars, Mark turned his personal trading account into millions, averaging 220% per year for five consecutive years with only one losing quarter, achieving an incredible 36,000% total return. To put that in perspective, a $100,000 account would explode to over $30 million in just five years. To demonstrate the capabilities of his SEPA ® methodology, in 1997, Mark put up $250,000 of his own money and entered the U.S. Investing Championship. Trading against highly leveraged futures and options traders, Mark traded a long-only stock portfolio to win the real-money investment derby with a 155% annual return, a performance that was nearly double the nearest competing money manager. Mark is featured in Jack Schwager’s Stock Market Wizards: Interviews with merica’s Top Stock Traders. Schwager wrote: “Minervini’s performance has
been nothing short of astounding. astounding. Most traders and money managers would be delighted to have Minervini’s worst year—a 128 percent gain—as their best.” Mark educates traders about his trading methodology through Minervini Private Access, a streaming communication platform that allows users the unique experience of trading side by side with him in real time. He also conducts a live Master Trader Program workshop, where he teaches his system in a twoday weekend event. You can learn more about Mark at www.minervini.com www.minervini.com..
DAVID RYAN David is a protégé of the legendary William O’Neil and a former money manager at William O’Neil & Co. After graduating college in 1982, David went to work for O’Neil’s company, and within four years, he was appointed the
