Think & Trade Like a Champion Summary

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Think & Trade Like a Champion offers a masterclass in disciplined stock trading, emphasizing risk management and strategic planning.

Mark Minervini distills key principles for cultivating a champion mindset, focusing on consistent profitability through calculated decisions and emotional control.

This book is a guide to transforming your approach to the market.

Before you invest, create a detailed plan. Know why you're buying, what you expect to happen, and how you'll react to different scenarios. This will help you manage risk and make smart choices.

Always set a stop-loss to limit potential losses. Watch for warning signs like low volume or falling prices. If things aren't going as planned, don't hesitate to adjust your strategy or exit the trade.

Before buying any stock, figure out the exact price where you'll sell if things go wrong. Focus on protecting your money first, and always know your exit point before you even start.

Don't let your feelings control your trades. Stick to your plan, cut losses quickly, and avoid hoping a losing stock will bounce back. Remember, it's okay to be wrong, but not to stay wrong.

Instead of using one stop-loss, try spreading them out. Sell some shares if the price drops a little, and more if it drops further. This way, you can stay in the game longer and still protect your money.

When a stock makes you good money, move your stop-loss up. This way, you won't lose what you've already earned. Also, remember to add more shares when a stock is doing well, but keep your risk the same.

Start tracking your trades today. Write down every buy and sell, not just the ones you want to remember. Calculate your average wins, losses, and how often you win. This is your personal truth.

Keep a trading journal. Write down what you learn, good or bad. Don't just trust your memory. Review your spreadsheet before each trade. Ask yourself, "How will this look on my spreadsheet?"

Never average down on a losing stock. It's like throwing good money after bad. Instead, cut your losses quickly. Remember, only losers average losers. Protect your capital.

Wait for the market to come to you. Don't force trades. Develop "sit-out power" and be patient. Stick to your plan and avoid making hasty decisions.

Always trade with the trend; it's like surfing, so catch the wave. Only buy stocks in long-term uptrends. This means the stock price should be above its moving averages, showing it's in Stage 2.

Use charts to check if a stock is acting normal. Look for volatility contraction patterns (VCPs), where price swings get smaller with less trading. Buy when the stock breaks above the pivot point on higher volume.

Avoid stocks that drop too much; big falls often mean big problems. Focus on stocks that hold up well, correcting between 10% and 35%. If a stock falls way more than the market, it's best to ignore it.

Buy stocks making new highs; they have no overhead supply. Look for stocks emerging from bases as the market recovers. Consider the 3-C pattern, where a stock pauses before continuing its uptrend.

Never bet everything on one stock; it's too risky. Instead, risk only a small part of your money on each trade, around 1.25% to 2.5% of your total. This way, one bad trade won't hurt too much.

Focus on a few great stocks, not many okay ones. If some stocks aren't doing well, sell part of them and buy more of the promising ones. Don't spread your money too thin.

Know when a stock is in a late stage; count the bases and watch the P/E ratio. If the P/E doubles, be careful. Sell when the stock runs up fast, with most days going up, or if you see heavy selling.

Protect your profits. Use a trailing stop or a back stop to lock in gains. If a stock breaks down sharply, sell, even if the news seems good. Don't be greedy; it's okay to sell too soon or too late.

Time the market by finding stocks ready to move fast. Don't diversify too much; focus on a few top stocks. Trade often to make the most of your edge, but always manage risk.

Sell into strength to protect profits. Trade small until you're winning, then trade bigger. Always trade with the trend, and protect your breakeven point to avoid losses.

Master your emotions by detaching from outcomes. Mentally rehearse both wins and losses to prepare. Optimize your body and mind with exercise, deep breathing, and a positive focus.

Identify and change negative habits. Celebrate small wins and learn from losses. Commit to your strategy, seek feedback, and remember that mastery takes time and effort.

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