VCP model - A model to narrow the volatility

You see the picture below to imagine how this model looks like:

VCP is a bullish model that helps traders make predictions about an uptrend, provides entry points with small losses and large profits. In other words, it has a good RR ratio.

The model to narrow VCP volatility was introduced by Mark Minervini through the book "Think & Trade like a champion", this model was widely applied in the stock market. VCP helps to detect safe buying-in points for investors with an attractive rate of return.

To spot this pattern, traders need to pay attention to at least the nearest strong resistance, and the price movement then gradually narrows as shown below:


The trading idea behind this pattern is that, after such cumulative price waves, there will be a boom. Traders can trade breakouts when the price breaks out of the pattern and high volume is best.


There is no time or specific contraction for a VCP pattern to form. Although many contractions can fall from 2 to 7 times.

It is best if it appears at strong resistance because breaking the pattern also means breaking resistance is more likely to be successful. Traders will open a long position when the price breaks out of the resistance of the VCP pattern.