What are the 8 criteria of the Minervini trend template?

The price is above the 150-day and 200-day moving averages; the 150-day is above the 200-day; the 200-day has been rising for at least a month; the 50-day is above both longer averages; the price is above the 50-day; the price is at least 30% above its 52-week low; it is within 25% of its 52-week high; and its relative strength rank is 70 or higher. Clear Tape uses simple moving averages and measures the last criterion against SPY.

What is a Stage 2 stock?

In stage analysis a stock moves through four phases: a base (Stage 1), an advance (Stage 2), a top (Stage 3) and a decline (Stage 4). A Stage 2 stock is in the advancing phase: above a rising long-term average and making higher highs and higher lows. The trend template is one way to define Stage 2 with numbers instead of judgement.

Does the trend template use SMA or EMA?

The published criteria are usually applied with simple moving averages, and this preset uses SMAs for the 50, 150 and 200 days. Some traders use exponential averages, which turn a little sooner. The choice rarely decides whether a strong uptrend passes, but it can change the exact day a stock qualifies or drops out.

How is relative strength measured here?

The original eighth criterion is a relative strength rank of 70 or higher against all stocks, which needs a ranked universe. Clear Tape instead requires the stock's price change over the last 126 sessions (about 6 months) and the last 252 sessions (about 12 months) to beat SPY's over the same periods. It is a simpler test of the same question: is the stock outperforming the market?

Minervini Trend Template Rules (8 Criteria)

A screen for Stage 2 stocks based on the Minervini trend template: eight checks on moving averages, the 52-week range and relative strength, all on daily closes.

The Minervini trend template is a checklist for finding stocks in a strong, established uptrend. Mark Minervini, a US stock trader, published it as a set of trend template criteria: the price above its long moving averages, those averages stacked in order and rising, the stock well off its 52-week low and close to its high, and stronger than the market. A stock that meets all of them is in what technical analysts call Stage 2, the advancing phase of a stock's cycle.

The reasoning is that the largest moves in individual stocks tend to happen inside uptrends that are already under way, and that market leaders show strength before most investors notice them. The template does not try to predict a turn. It waits until the trend is plain on the chart and keeps a stock on the list only while it stays that way. Stage analysis is older than the template: Stan Weinstein described the four stages (basing, advancing, topping and declining) in the 1980s, and Minervini built his criteria on that framework.

Clear Tape's Leader Trend Filter turns the template into a trend template screener with a signal: it fires on the first close where all eight checks pass after at least one failed the session before. That makes it a list of new candidates rather than a precise entry. Many traders use it to decide which stocks to watch, then time the purchase with a base breakout or a pullback to the 21 EMA.

Schematic, not real prices. The signal fires on the first close that passes all eight checks. The trailing stop steps up behind the price, and here the trade ends when a check fails: the close drops below the 50-day SMA.

The exact rules

These are the rules the Leader Trend Filter preset runs in Clear Tape, checked on daily bars after each close. This page and the software read the same rulebook, so they always agree.

Entry

Signal on the first close where all eight checks pass after at least one failed the session before (the stock newly qualifies):
The close is above the 150-day SMA and the 200-day SMA.
The 150-day SMA is above the 200-day SMA.
The 200-day SMA is higher than 21 sessions (about a month) ago.
The 50-day SMA is above both the 150-day and the 200-day SMA.
The close is above the 50-day SMA.
The close is at least 30% above the lowest low of the last 252 sessions.
The close is no more than 25% below the highest high of the last 252 sessions.
The stock's price change over the last 126 sessions (6 months) and over the last 252 sessions (12 months) both beat SPY's.

Stop

The ATR trailing stop: the highest high of the last 22 sessions − 3 × ATR(22), taken on the signal day; while the trade is open it only moves up.

Exit

Any of the eight checks fails at a close (sell at that close), or the trailing stop is hit, whichever comes first.

Target

None of its own. The target shown is 2R (twice the entry-to-stop distance above the entry), for reference only; the trade is not closed there.

Parameters

Parameter	Value
Moving averages	SMA 50, 150, 200
200-day rising	vs 21 sessions ago
Above the 52-week low	at least 30%
Below the 52-week high	at most 25%
Relative strength	beats SPY over 126 and 252 sessions
Trailing stop	22-day high − 3 × ATR(22)
Minimum history	260 sessions

Data it needs

Daily bars (open, high, low, close), split-adjusted: at least 260 sessions, about 12 months.
SPY daily closes for the same dates (the S&P 500 ETF, used as the market yardstick).

Where it differs from the published method

The published eighth check is a relative-strength rank of 70 or more against all stocks. That needs a ranked universe, so this preset asks instead that the stock beat SPY over 6 and 12 months.
The book asks for 30% above the 52-week low; some summaries use 25%. This preset uses 30%.

Terms used

SMA (simple moving average): The plain average of the last n closing prices, today included. "The 50-day SMA" averages the last 50 closes.
52-week high and low: The highest high and the lowest low of the last 252 sessions, about a year of trading days.
ATR (average true range): A stock's typical daily move. Each day's true range is the largest of high − low and the distances from the previous close to the high and to the low (so gaps count); ATR(n) averages it Wilder's way (each new day counts 1/n). A stop set in ATRs sits farther away on a jumpy stock.
ATR trailing stop: The highest high of the last 22 sessions minus 3 × ATR(22). While a trade is open it only moves up, never down.
R (risk per share): Entry minus stop. A 2R target sits twice that distance above the entry.

Who it suits

Those with about two hours at the weekend and 15–30 minutes each trading day, who will hold mostly cash in corrections and accept that fewer than half of trades win.

The filter suits traders who want a short, objective list of strong stocks to study rather than a stream of buy orders. Running it takes a few minutes after the close; the real work is in what you do with the list: reading each candidate's chart and earnings and deciding on an entry. If you would rather act on every signal mechanically, the breakout strategies are a closer fit.

Holding periods can run for months while a stock stays in Stage 2, so the method rewards patience and punishes over-trading. Because the stop sits three ATRs below a recent high, it is usually wider than a breakout stop; with a fixed risk per trade, that means fewer shares in each position. A smaller account can run it as long as every position is sized from the stop.

Strengths

Focuses on the few leaders that produce a large share of the gains.
Combines earnings growth, institutional demand, group strength and RS.
Losses capped about 7–8% below the entry; winners trailed with the 50-day.
The market's state sets when to buy and when to hold cash.

Weaknesses

A low hit rate: often fewer than half of all trades win.
Highly market-dependent: many growth stocks fell 50% or more in 2022.
Earnings gaps can jump the stop, so a loss can exceed the plan.
More homework: quarterly results and filings, about two hours a week.

Where it struggles: Late in bull markets many stocks pass just before they top. It is a filter for leaders, not an entry timing signal.

Common mistakes

Treating the signal as a buy order. Passing the template says the trend is strong, not that today is a low-risk entry; a stock can qualify while it is stretched far above its 50-day average. Wait for a defined setup and a stop you can size.
Buying new names late in a long bull market. Near market tops, many stocks pass just before they peak. Check the broad market and market breadth before acting on new candidates.
Loosening the checks to get more names, for example dropping the 52-week-high rule or the relative strength test. Each check removes a kind of weak stock; a list that is long because the rules are loose defeats the purpose.
Ignoring earnings dates. A strong trend does not protect against an earnings gap, which can open below the trailing stop and turn a planned 1R loss into a larger one.
Lowering the trailing stop after a pullback. The stop only moves up; resetting it lower to stay in a trade removes the exit the system relies on. See how ATR stops work.

Worked example

Illustrative numbers only. A stock closes at $80 and, for the first time, passes all eight checks: it is above its rising 50-, 150- and 200-day averages, more than 30% above its 52-week low, within 25% of its 52-week high, and its 6- and 12-month gains beat SPY's. Its highest high of the last 22 sessions is $82 and its ATR(22) is $2.50, so the trailing stop starts at $82 − 3 × $2.50 = $74.50. Risk per share is $80 − $74.50 = $5.50.

With a $25,000 account and 1% risk per trade ($250), that is $250 ÷ $5.50 ≈ 45 shares, about $3,600 of stock; the position size calculator does the arithmetic. Weeks later the 22-day high is $95 and ATR(22) is $2.80, so the stop has risen to $95 − $8.40 = $86.60. The stock then closes at $88, below its 50-day SMA: one check fails and the position is sold at that close for $8 a share, $360 in all, about 1.5R before costs. Had it fallen straight back instead, the loss at the first stop would have been about $250, or 1R.

Learn and practise

Academy lessons

Calculators and guides

Glossary terms

Using it in Clear Tape

Free Turn on the Leader Trend Filter preset in Trading systems. The rules are written out in full, and you can build your own systems from them (Free: up to 5 systems and a 50-stock watchlist).
Tools After every close, Leader Trend Filter screens your watchlist and lists its signals, with the entry, the stop and the target drawn on the chart.
Free Check against my system: every rule of Leader Trend Filter on any stock's daily bars, the levels it sets and the caveats (earnings close by, thin trading, gaps wider than the stop), with a short AI-written explanation of those facts. One check a day on Free as a trial, 10 on Tools, 30 on Pro.
Tools Backtest Leader Trend Filter with the holdout test: judged on 2000–2014, then run unchanged from 2015 to now against holding the same stocks, with your own costs and risk per trade (Tools 20 backtests a day, Pro 50). Results are hypothetical: each report discloses costs and survivorship bias, and past results do not predict future ones.
Free Log the trades in the free trade journal, tagged with the system: R multiples, expectancy and an AI score of how closely each trade followed the plan.
Pro The AI trading-system coach proposes rules from the way you actually trade (Pro, 5 conversations a month).

For educational purposes only. Not investment advice. Backtest results are hypothetical and do not predict future results.

Leader Trend Filter: the Minervini trend template

At a glance