Summary of each chapter in "Think & Trade Like A Champion" by Mark Minervini🧠📚📈

Here’s a summary of each chapter of one of my favorite trading books. I’ve studied and have been following Minervini’s trading strategy for 7 years now. I’ve grown my portfolio by learning how he reads charts, gaps, strategy and most importantly trading psychology. Hope you enjoy.

Introduction: First Steps to Thinking and Trading Like a Champion

• Mark Minervini shares his journey from struggling as a trader to becoming a Market Wizard.

• Trading success is about mindset, discipline, and preparation—not luck.

• Treat trading like a business: build a system, hold yourself accountable, and always seek improvement.

• You can’t control the market, but you can control your reaction to it.

Section 1: Always Go In With a Plan

• A trading plan is your roadmap to success. Without it, you’re gambling.

• Your plan should include:

• Clear Entry Points: Identify the exact conditions to buy.

• Exit Strategy: Define profit targets and stop-loss levels before entering.

• Stock Selection Criteria: Use technical patterns and strong fundamentals to choose trades.

• Risk Rules: Know how much you’re willing to lose on every trade.

• Plans help you stay disciplined and avoid emotional, impulsive decisions.

• Failing to plan = planning to fail.

Section 2: Approach Every Trade Risk-First

• Risk management is the foundation of successful trading.

• Before you think about potential rewards, ask yourself: “How much could I lose?”

• Steps to manage risk effectively:

• Set Stop-Loss Levels: Protect your capital with predefined exit points.

• Position Sizing: Don’t risk more than 1-2% of your capital on a single trade.

• Respect the Downside: Avoid the temptation of oversized positions.

• The first goal of trading is to preserve your capital.

Section 3: Never Risk More Than You Expect to Gain

• Focus on trades with favorable risk/reward ratios. Minervini’s rule: At least 3:1.

• Example: If your potential loss is $1, your target gain should be $3 or more.

• Use technical analysis (support/resistance levels) to define realistic targets and stops.

• Avoid the trap of taking “high-risk” trades just because they seem exciting.

• Consistently making trades with good risk/reward ratios is how you grow wealth.

Section 4: Know the Truth About Your Trading

• Be honest about your performance. No excuses, no blaming the market.

• Track every trade and ask:

• Did you follow your plan?

• What went wrong or right?

• Were your emotions driving your decisions?

• Use a trading journal to log your thought process, entry/exit points, and results.

• Reviewing past trades helps identify patterns of success and mistakes to fix.

• Accountability leads to growth.

Section 5: Compound Money, Not Mistakes

• Compounding is the key to building wealth. Protect every dollar of your capital.

• Big losses are devastating: A 50% loss requires a 100% gain to recover.

• Focus on small, consistent gains by reducing drawdowns and avoiding reckless trades.

• Minervini explains: Avoid chasing trades or making impulsive moves, as these compound mistakes and stall your growth.

• The less you lose, the more you can grow.

Section 6: How and When to Buy Stocks—Part 1

• Use Specific Entry Point Analysis (SEPA) to find the best times to buy.

• Look for stocks with strong fundamentals:

• Earnings growth of 20% or more.

• Increasing sales and profit margins.

• Combine this with technical patterns like:

• Cup-with-handle or flat bases.

• Stocks breaking out of consolidation patterns with increasing volume.

• Buy at the right moment: near breakout points when risk is lowest, and reward potential is highest.

Section 7: How and When to Buy Stocks—Part 2

• Advanced buying strategies focus on timing and precision:

• Anticipate Breakouts: Look for tightening price action and increasing volume.

• Pivot Points: Identify price levels where momentum shifts in your favor.

• Avoid common traps:

• Buying too early before a setup is confirmed.

• Chasing stocks that are extended beyond ideal entry points.

• Patience is key: Wait for setups that match your criteria.

Section 8: Position Sizing for Optimal Results

• Position sizing is how you control risk while maximizing rewards.

• Never risk more than a predetermined percentage of your account (1-2% max).

• Scale into winning trades to increase exposure as the trade works in your favor.

• Avoid overleveraging, which can magnify losses and wipe out your account.

• Proper sizing ensures that no single trade can ruin your portfolio.

Section 9: When to Sell and Nail Down Profits

• Selling is as important as buying. Have a plan for exits:

• Sell for Profit: Exit when your target is hit. Don’t get greedy.

• Cut Losses Quickly: Exit immediately if the stock hits your stop-loss.

• Use trailing stops to lock in gains while allowing room for growth.

• Don’t hold onto losers out of “hope” they’ll recover—it rarely works.

• A strong selling strategy protects profits and minimizes losses.

Section 10: Eight Keys to Unlocking Superperformance

• Superperformance stocks share common traits:

• Explosive earnings and revenue growth (50%+ is common).

• High relative strength compared to the overall market.

• Leadership within a strong-performing industry.

• Identify these stocks early and ride the trend for big gains.

• Always manage risk—superperformance stocks can be volatile.

Section 11: The Champion Trader Mindset

• Trading success requires mental toughness:

• Overcome fear and greed to make rational decisions.

• Stay disciplined even during losing streaks.

• Minervini stresses lifelong learning: Review mistakes, refine your strategy, and never stop improving.

• Focus on consistency and discipline over perfection.