VCP Volitility Contraction Pattern Minervini

Steelhead281

I find nothing in a search for this here. I would like to have a scan to find stocks in a VCP Volitility Contraction Pattern as taught by Mark Minervini. I am surprised that I con't find anything here on the topic. Has anyone produced this...I would love to "stand on your shoulders" rather than reinvent. Maybe I am not searching correctly....

lmkwin

VCP is a squeeze. The Standard Deviation and/or the ATR would be the indicators. The Standard Deviation is used in the calculation of the Bollinger Bands. The ATR is used in the calculation of the Keltner Channels. You can find Squeeze scan codes and discussions, using the search.

On ThinkorSwim, there are a few custom indicators that were created that use the squeeze framework. That ThinkScript code is listed below.

# Momentum Squeeze
# Mobius
# Added Squeeze Label with directional color
# Label is green when momentum is ascending, red when descending

input length = 20; #hint length: Length for average calculation
input price = close;
input SDmult = 2.0;
input ATRmult = 1.5;

def K = (Highest(High, length) + Lowest(low, length)) / 2 + ExpAverage(close, length);
def Momo = Inertia(price - K / 2, length);
def SD = StDev(close, length);
def Avg = Average(close, length);
def ATR = Average(TrueRange(high, close, low), length);
def SDup = Avg + (SdMult * Sd);
def ATRup = Avg + (AtrMult * ATR);

def Squeeze = if SDup < ATRup then 0 else Double.NaN;

assignpriceColor(if squeeze ==0 then color.gray else
if momo > momo[1] then color.blue else color.red
);



This link gives a good tutorial on VCP
https://dotnettutorials.net/lesson/volatility-contraction-pattern-strategy/

So you'd want to combine the Squeeze with some momentum indication

Link below covers Squeeze code.

https://scan.stockcharts.com/discussion/comment/6158#Comment_6158

Momentum can be shown by pretty much any indicator that follow price movements, including price. I'm not too familiar with Minervini so I don't know what he uses for momentum.

If you get stuck, post what you have and what you're trying to accomplish for assistance.