Why Gary Glover's Trading Philosophy Emphasizes Process Over Market Opinions

Written by Christopher Hall, AdvDipFP | Authorised Representative, AFSL 526688 updated February 2026

How Systematic VCP Pattern Recognition on the ASX Beats Opinion-Based Trading

The Trading Paradox Most Investors Never Solve

Process beats prediction. Gary Glover's observation—"having a process is more important than having a view"—represents the fundamental distinction between systematic momentum traders and opinion-driven investors. Mark Minervini, US Investing Champion, built his methodology on this exact principle: systematic pattern recognition frameworks eliminate emotional decision-making while creating repeatable entry and exit criteria.

This distinction separates consistent traders from those relying on market opinions. When markets demonstrate 17% harder trading conditions than historical norms—as current ASX data indicates with only 47% of stocks above 50-day moving averages despite the ASX200 reaching all-time highs—the discipline of process-based trading becomes essential rather than optional.

Understanding how to identify VCP patterns using systematic 3-stage methods provides the foundation for process-based momentum trading on Australian markets.

https://www.youtube.com/watch?v=FqjLq0Mg3OI

Why Market Conditions Demand Process-Based Trading

The ASX Market Disconnect: Index Highs vs Trading Reality

The ASX200 index trading near record levels creates a false perception of widespread opportunity. Index concentration reveals the truth: just 18 companies comprise over 50% of market capitalisation, with the top five names representing more than 30% of total index weight. This concentration means index performance diverges dramatically from tradeable stock universe performance.

Current market breadth data quantifies this disconnect. With 53% of tradeable ASX companies below their 50-day moving averages—the critical technical threshold momentum traders monitor—finding quality setups requires systematic sector filtering methods rather than random stock selection or market opinion.

Gary Glover's personal trading experience demonstrates volatility extremes characterizing 2025 market conditions: recording both his largest single-day gain and largest single-day loss within the same week, repeated again the following week. This volatility environment punishes opinion-based trading while rewarding systematic risk management and pattern recognition processes.

The VCP Pattern Framework: A Case Study in Process

What Systematic Pattern Recognition Reveals

VCP (Volatility Contraction Pattern) patterns—developed and popularised by Mark Minervini in Trade Like a Stock Market Wizard—demonstrate how process outperforms prediction. Rather than forecasting whether stocks will rise, Minervini's VCP methodology identifies setups where probability favours continuation moves based on specific technical criteria.

VCP pattern criteria from Minervini's framework include:

Contraction sequence: Three to six distinct consolidations within a base structure, each contraction tighter than the previous in both price range and duration. LAT (Latitude 66) recently demonstrated this pattern, with consolidations narrowing before breaking above the 16-cent resistance level.

Volume characteristics: Declining volume through contractions indicating controlled institutional accumulation rather than distribution. Minervini emphasizes that volume should dry up dramatically through each successive consolidation—a signal professional money is absorbing supply without aggressive buying that would drive prices higher prematurely.

Moving average alignment: Stocks maintaining position above rising 50-day moving averages demonstrate sustained demand. Current market conditions show this criterion eliminating 53% of potential setups—precisely why systematic filtering proves essential.

Sector strength confirmation: Minervini's SEPA (Specific Entry Point Analysis) methodology requires individual stock patterns within leading sectors. His research demonstrates isolated patterns in weak sectors underperform significantly compared to patterns emerging within institutional rotation themes.

Understanding the complete SEPA framework reveals how systematic sector analysis integrates with individual stock pattern recognition.

The Process Advantage: LAT Case Study

Gary Glover's analysis of LAT (Latitude 66) illustrates process-based pattern recognition versus opinion-driven approaches. Rather than predicting LAT's direction based on rare earth market views or company fundamentals, the systematic approach identified:

1. Observable VCP structure with three distinct contractions over an eight-week base

2. Volume declining through each successive consolidation phase

3. 50-day moving average support maintaining throughout base formation

4. 16-cent resistance level representing clear risk-reward demarcation point

Process-based traders entered positions above 16 cents with stops below pattern support—risking defined amounts to capture potential continuation moves. Opinion-based traders debating whether rare earths would rise or fall missed the pattern entirely or entered without systematic risk parameters.

The distinction: systematic traders defined risk before entering; opinion-driven investors hoped for favourable outcomes without quantified parameters.

Learn the complete VCP trade execution framework including Minervini's position sizing and exit strategies.

Consumer Staples = InfoTech Valuations: When Rare Conditions Trigger

Identifying Market Extremes Through Data, Not Opinion

Gary Glover highlighted a remarkable market condition: consumer staples trading at identical valuation multiples to information technology stocks—an occurrence documented only three times in the past decade (2020 COVID low, 2022 bear market bottom, early 2025 tariff concerns).

This statistical rarity carries significance not because it predicts immediate reversals, but because it identifies conditions where systematic rebalancing opportunities historically emerge. Opinion-driven approaches might debate whether growth stocks deserve their valuations or defensive stocks trade too expensively. Process-based approaches simply monitor for pattern development as historical extremes mean-revert.

When defensive sectors reach valuation extremes, institutional capital historically rotates back toward growth and cyclical sectors. This rotation manifests in observable patterns: VCP setups forming in previously weak sectors, insider buying increasing (illustrated by Seek's seven directors purchasing $16M shares collectively), volume characteristics shifting from distribution to accumulation.

The process: identify extreme conditions through data, monitor for confirming patterns, execute when systematic criteria trigger—rather than predicting timing or magnitude of reversals based on opinion.

Understanding how to identify leading sectors for VCP pattern trading provides the framework for capitalizing on sector rotation.

Why "Donut Lab Disruption" Matters to Process-Based Traders

Avoiding Fixed Views in Dynamic Markets

Gary Glover's reference to Donut Lab—a company claiming breakthrough battery technology rendering lithium batteries potentially obsolete—illustrates why fixed market views create risk. Opinion-based approaches might hold lithium stocks through such disruption risk based on EV adoption conviction. Process-based approaches recognise when technical patterns deteriorate regardless of fundamental views.

Core Lithium (CXO) demonstrates this principle. Despite bullish lithium market opinions potentially justified by EV adoption trends, the chart showed:

• Head-and-shoulders pattern forming across January-February

• Volume remaining elevated through price declines (distribution signal)

• 50-day moving average broken with increasing downside momentum

Process-based traders exited when technical patterns failed, preserving capital regardless of lithium market views. Opinion-based holders suffered drawdowns hoping fundamental thesis would rescue positions despite deteriorating technical evidence.

This principle extends beyond individual stocks. When entire sectors face disruption risk—whether from technology, regulation, or market structure changes—systematic approaches adapt to new pattern behaviour while opinion-driven approaches fight changing realities.

When accelerating trend lines break, systematic traders recognize the pattern signaling potential 50-70% corrections and adjust positioning accordingly.

The Insider Buying Signal: Process Meets Fundamental Confirmation

Systematic Monitoring of Director Transactions

Insider buying represents one data point process-based traders monitor systematically. Gary Glover's observation of Seek's seven directors purchasing shares collectively worth $16M between $16.05-$16.45 provides context beyond company-specific bullishness.

Historical analysis of significant insider buying episodes shows correlation with subsequent positive returns when combined with technical pattern confirmation. The 2021 lithium sector run exemplifies this: Liontown Resources insiders purchased materially before commencing an investor roadshow, with the stock subsequently forming a VCP pattern triggering a multi-month advance that seeded twelve consecutive VCP breakouts across ASX lithium stocks.

The process: monitor insider transactions through ASX announcements, identify patterns where multiple directors purchase (stronger signal than single director buying), confirm technical setup alignment (price above moving averages, consolidation forming), execute when pattern triggers—rather than buying solely because insiders bought.

Insider buying represents one input to systematic decision frameworks, not a standalone trading signal. Process-based approaches synthesise multiple confirming factors; opinion-based approaches might buy immediately following insider purchases without confirming technical evidence.

Understanding the IPO lifecycle trade framework developed by Eve Boboch and Kathy Donnelly reveals how systematic approaches identify the 20% of IPOs that gain 100%+ while avoiding the 90% trading below day-one lows.

Risk Management: The Essential Process Component

Gary's "Half Relaxed" Philosophy

Gary Glover's description of being "half relaxed" when half his positions reach breakeven quantifies how process-based risk management operates. Rather than holding full positions hoping for favourable outcomes, systematic approaches scale into positions, move stops to breakeven after initial gains, and manage remaining positions with trailing stops.

This mechanical process removes emotional decision-making during volatile periods. When experiencing "biggest up day ever" followed by "biggest down day ever" within the same week—as Gary experienced twice consecutively—opinion-based approaches become impossible to maintain psychologically. Process-based approaches simply execute predetermined rules regardless of emotional state.

Systematic risk management components include:

Position sizing: Determining risk per trade as fixed percentage of capital (typically 1-2% for momentum approaches) before entering positions. This ensures no single loss meaningfully impairs overall capital. Minervini details his specific position sizing formulas in Trade Like a Stock Market Wizard, emphasizing smaller initial positions that build as patterns confirm.

Stop placement: Defining exit points before entry based on pattern structure rather than pain tolerance. VCP patterns offer clear stop levels below consolidation lows—typically 7-8% below entry for properly formed bases.

Partial profit-taking: Selling portions of winning positions at predetermined multiples of risk (commonly 2-3x initial risk) while running remainder with trailing stops. Minervini's approach involves selling 20-30% at +20-25% gains, another portion at +40-50%, preserving core position for potential extended moves.

Breakeven stops: Moving remaining position stops to entry prices after initial profit targets hit, creating "free" positions unable to generate losses.

This systematic approach allows traders to "sit" through volatile periods—as Gary noted, "it's the sitting which is the hard part"—because predetermined rules govern all decisions.

The 10-Day, 20-Day, 50-Day Moving Average System

Why Systematic Traders Monitor Specific Timeframes

Moving averages represent objective data points removing subjective interpretation. Momentum traders consistently monitor 10-day, 20-day, and 50-day moving averages because institutional trading activity clusters around these timeframes, creating self-fulfilling technical support/resistance.

The systematic framework:

50-day moving average: Defines primary trend. Stocks above rising 50-day MAs demonstrate sustained demand; stocks below demonstrate supply dominance. Current ASX data showing only 47% of stocks above this threshold quantifies overall market weakness despite index strength.

20-day moving average: Identifies short-term momentum shifts. VCP patterns typically hold 20-day MA support through consolidations. Gary highlighted this in Rhythm Biosciences (RHY) analysis, noting the B-wave fallback technique where stocks breaking resistance often retest 20-day MAs before continuing higher.

10-day moving average: Signals near-term momentum changes. Aggressive momentum traders like Kristjan Kullamägi use 10-day MA violations as exit triggers for fast-moving stocks. EIQ (EchoIQ) demonstrated this, holding 10-day MA support through recent consolidation.

The process: monitor stocks relative to these objective levels, execute predetermined actions when levels break (entries above, exits below), avoid subjective interpretation about what "should" happen.

Understanding the complete VCP trading guide for ASX markets provides comprehensive moving average integration strategies.

Current Market Examples: Process Application

DTR (Dateline Resources): VCP Under 50 Cents

Gary identified DTR forming a textbook VCP pattern despite trading below his personal 50-cent minimum threshold. The pattern demonstrated all systematic criteria from Minervini's framework: prior significant advance (100-200%), consolidation staying above halfway retracement point, tightening price action through successive contractions, declining volume.

Process-based analysis acknowledges the pattern quality while noting sub-50-cent stocks introduce execution challenges (wider bid-ask spreads, lower institutional participation). Systematic traders adapt position sizing downward for lower-priced stocks or skip setups conflicting with personal rules—rather than trading every pattern regardless of fit.

NXL (Nuix): Market Cap Considerations in Process

Nuix represents legitimate AI exposure among ASX-listed companies—a thematic attracting investor interest. However, systematic analysis identified concerning elements: elevated market capitalisation relative to fundamentals, significant overhead resistance from prior highs, multiple years of underwater investors potentially creating selling pressure during rallies.

Process-based approaches note these factors without predicting outcomes. The systematic framework: monitor for VCP formation, require multiple contractions demonstrating supply absorption, wait for volume confirmation on breakout attempt—rather than buying based on AI thematic popularity.

When "Best" Doesn't Mean "Right For You"

Adapting Universal Processes to Personal Parameters

David Ryan's cup-and-handle methodology represents one of the most studied technical patterns. Gary highlighted Ryan's preference for extremely tight handles where price consolidates near prior highs with minimal volume. Ryan, a US Investing Champion and William O'Neil protégé, documented this approach demonstrating consistent profitability over decades.

However, "best" pattern doesn't equal universally appropriate. Traders requiring wider stops due to risk tolerance, those trading smaller accounts unable to absorb tighter ranges, or those monitoring fewer stocks daily may perform better with looser patterns offering more entry opportunities.

Learn how cup-and-handle patterns appear in 40-50% of ASX momentum leaders and how Gary Glover's systematic framework integrates William O'Neil's ABC correction methodology.

The process: study proven methodologies, test against personal parameters (capital, risk tolerance, time availability, psychological comfort), adapt what works systematically—rather than copying others' approaches without personalisation.

Episodic Pivots: When News Creates Systematic Opportunities

Combining Catalysts with Technical Setups

While VCP patterns represent the core momentum setup, episodic pivot trading offers complementary opportunities when stocks gap 10-100%+ on significant news catalysts. Developed by traders like Pradeep Bonde and refined by Kristjan Kullamägi, episodic pivots demonstrate how process-based approaches incorporate fundamental catalysts into technical frameworks.

MI6 (Minerals 260) exemplified this pattern, gapping significantly on earnings announcements while forming a VCP base structure. The systematic approach: identify the catalyst (earnings beat, contract announcement, regulatory approval), confirm technical setup (consolidation depth, volume characteristics), execute when pattern triggers—not simply buying news hoping for continuation.

Process-based traders recognise multiple pattern types exist within momentum frameworks. VCP patterns offer the highest consistency for base breakouts; episodic pivots capture catalyst-driven gaps; accelerating trend line patterns signal potential exhaustion requiring defensive positioning.

The key: systematic criteria exist for each pattern type, eliminating subjective interpretation while maintaining flexibility across market conditions.

The Thursday 3030 List: Systematic Opportunity Identification

How Professional Filtering Creates Edge

Finer Market Points' 3030 List—delivered to members every Thursday afternoon—represents systematic filtering applied to the entire ASX trading universe. Rather than monitoring 2,000+ stocks individually, the filtering process identifies the 30 momentum leaders (top performers demonstrating technical strength) and 30 launch pad companies (emerging setups showing accumulation characteristics).

This systematic approach solves the breadth problem Gary identified: with only 47% of stocks above 50-day moving averages, random stock selection means majority of examined stocks lack momentum characteristics. The 3030 filtering eliminates 97% of the universe, concentrating attention on the 3% demonstrating favourable technical evidence.

The filtering process considers:

• Momentum profile scoring: Quantitative ranking of price performance, volume characteristics, and moving average alignment across all ASX stocks

• Sector rotation analysis: Identifying where institutional capital flows concentrate currently, applying Minervini's sector strength principles

• Pattern development: Stocks showing early VCP, cup-and-handle, or high-tight flag formation based on documented technical criteria

• Launch pad characteristics: Companies demonstrating accumulation signatures before graduating to momentum leader status

This represents process institutionalised: systematic criteria applied consistently, generating filtered opportunity sets, allowing traders to focus analysis on highest-probability setups rather than random stock examination.

Why This Approach Works in 17% Harder Markets

Systematic Advantage During Difficult Conditions

When markets become 17% harder than historical norms to trade profitably, opinion-based approaches suffer disproportionately. Fixed views about market direction, sector performance, or individual stock fundamentals prove wrong more frequently, generating losses that erode capital and confidence.

Process-based approaches continue executing systematic criteria regardless of difficulty. Fewer setups trigger when only 47% of stocks demonstrate favourable technical characteristics—but the setups meeting criteria maintain similar characteristics because the underlying pattern structure remains consistent with Minervini's documented framework.

Gary's volatile week—biggest gains and losses within days—demonstrates this reality. Opinion-based traders suffering large losses often abandon approaches entirely or become paralysed by fear. Process-based traders experiencing losses simply verify stops functioned correctly, position sizing remained appropriate, and pattern identification followed systematic criteria—then continue executing process on next setup.

The compounding effect: opinion-based approaches suffer both direct losses and opportunity costs from paralysis; process-based approaches suffer contained losses but maintain capacity to capture subsequent opportunities when they emerge.

Minervini addresses this extensively in Think & Trade Like a Champion, emphasizing that professional traders focus on process execution rather than individual trade outcomes. Winning percentages matter less than average gain per winner versus average loss per loser—metrics controlled through systematic risk management rather than market prediction.

Frequently Asked Questions

What is a VCP pattern and why does it work on ASX stocks?

VCP (Volatility Contraction Pattern) describes a base structure where stocks consolidate through successively tighter price contractions before resuming uptrends, as documented in Mark Minervini's Trade Like a Stock Market Wizard. The pattern works because tightening volatility indicates supply absorption—sellers progressively exhausted through each consolidation—setting up imbalance favouring buyers when patterns resolve upward. Minervini emphasizes that properly formed VCPs demonstrate declining volume through each contraction, with each pullback shallower in both percentage terms and time duration than the previous consolidation. This pattern appears across all markets including ASX stocks when systematic 3-stage identification criteria apply.

How do I identify if I'm trading with a process or just opinions?

Process-based trading defines exact entry criteria, stop levels, position sizing, and exit rules before examining any specific stock, following frameworks like Minervini's SEPA methodology. Opinion-based trading evaluates stocks then decides actions based on current sentiment. Test: Can you write down your complete trading rules in advance and follow them mechanically for 30 trades without modification? If no, you're trading opinions rather than process. Minervini states in Think & Trade Like a Champion that consistent traders follow identical criteria regardless of market conditions, while discretionary traders continuously adjust approaches seeking comfortable outcomes.

What makes the 3030 List different from stock screeners?

Stock screeners filter based on predefined criteria but require you to create the criteria and interpret results. The 3030 List applies professional momentum trading criteria—including VCP pattern recognition, sector rotation analysis, volume characteristics, and moving average alignment—then delivers pre-filtered results showing which stocks currently meet systematic standards. Rather than screening 2,000+ stocks yourself weekly, the process filters to the 60 highest-probability setups for your analysis based on documented technical frameworks from Minervini, O'Neil, and systematic momentum methodologies.

Can I use VCP patterns with fundamental analysis?

VCP patterns represent technical setups indicating when stocks demonstrate favourable risk-reward characteristics for entry. Fundamental analysis examines business quality, valuation, growth prospects. The approaches complement rather than conflict. Process-based traders typically use fundamentals for universe selection (avoiding companies with deteriorating business quality) then use technical patterns for entry and exit timing. The distinction: fundamentals determine WHAT to potentially trade; technicals determine WHEN and at what PRICE. Minervini integrates both in his SEPA framework, requiring fundamental strength (earnings growth, sales growth, institutional sponsorship) alongside technical pattern confirmation.

How long does it take to develop a systematic trading process?

Developing systematic trading skills requires approximately 6-12 months of deliberate pattern study and practice for most traders according to educational research on complex skill acquisition. This includes studying 100+ examples of each major pattern type (VCP, cup-and-handle, flat base), paper trading to test pattern recognition without capital risk, then progressively increasing position sizes as competence develops. Gary Glover emphasised studying historical charts—model book construction—as essential for pattern recognition development. Minervini describes in Trade Like a Stock Market Wizard spending years building pattern recognition skills before achieving consistency, emphasizing that shortcuts don't exist despite common beliefs.

What do I do when markets are "17% harder" than normal?

Harder market conditions mean fewer setups meet systematic criteria—but don't change the criteria themselves. Process-based approaches simply execute fewer trades during difficult periods, preserving capital while waiting for probability to improve. Gary's observation about being "half relaxed" when half his positions reach breakeven demonstrates proper risk management: take partial profits quickly, move stops to breakeven on remainder, focus on capital preservation rather than forcing trades. Opinion-based traders often increase activity during difficult periods trying to "make back" losses—precisely wrong approach. Minervini addresses this in multiple books, noting that professional traders sometimes hold primarily cash positions for weeks during unfavourable market conditions, waiting for systematic entry criteria rather than forcing action.

How do insider purchases fit into systematic trading processes?

Insider purchases represent one confirming factor in multi-factor analysis frameworks documented in professional momentum methodologies. Systematic process: monitor director transactions through ASX announcements, note significant purchases (multiple directors, material dollar amounts relative to their wealth), then examine whether technical patterns confirm insider optimism. Insider buying alone doesn't trigger trades; insider buying plus VCP formation plus sector strength plus moving average support creates higher-probability setup. The Liontown Resources example from 2021 showed insider buying preceding VCP breakout that seeded sector-wide momentum move across ASX lithium stocks. This demonstrates how fundamental catalysts (insider confidence) combine with technical confirmation (systematic pattern recognition) within process-based frameworks.

Implementing Process-Based Trading: Next Steps

Understanding process-based trading intellectually differs from implementing systematically. The progression most successful traders follow, based on educational research and practitioner experience:

Education phase (Typically 4-8 weeks): Study major pattern types using historical examples and documented frameworks. Access educational resources covering VCP pattern identification, trade execution strategies, and sector strength analysis to build foundational knowledge.

Paper trading phase (Typically 8-16 weeks): Monitor the Thursday 3030 List identifying when systematic entry criteria trigger, recording hypothetical entries and exits without capital risk. This develops pattern recognition and rule-following discipline before capital exposure. Minervini recommends this phase continue until traders achieve at least 10 consecutive winning paper trades, demonstrating pattern recognition competence rather than random success.

Small position phase (Typically 12-24 weeks): Execute systematic process with minimal position sizes (0.25-0.5% of capital per trade) focusing on process execution rather than profit generation. The goal: prove you can follow rules mechanically through 30+ consecutive trades without emotional override or criteria modification.

Scaling phase (Typically 6-12 months from start): Progressively increase position sizing as process execution demonstrates consistency. Most systematic traders reach full position sizing (1-2% risk per trade) within 6-12 months of deliberate practice, though individual timelines vary significantly based on learning speed, available study time, and psychological adaptability.

The distinction: opinion-based traders jump immediately to full positions based on market views; process-based traders build systematic execution skills progressively, ensuring process works before deploying significant capital.

Join the 3030 List: Systematic Filtering for ASX Traders

When only 47% of ASX stocks maintain positions above 50-day moving averages yet 2,000+ companies demand monitoring, systematic filtering becomes essential rather than optional. The Finer Market Points 3030 List delivers every Thursday afternoon, providing 30 momentum leaders and 30 launch pad companies meeting professional technical criteria based on documented momentum trading frameworks.

Members receive the same filtered opportunity set Gary Glover analyses in weekly videos—identifying VCP formations, cup-and-handle setups, sector rotation signals, and volume accumulation patterns across the entire ASX universe using systematic criteria from Minervini's SEPA methodology and complementary momentum frameworks.

Access includes complete historical 3030 Lists allowing model book construction from actual ASX patterns, member-only analysis videos explaining setup identification using documented technical criteria, and priority updates when significant pattern developments occur.

[Join the 3030 List Membership: https://www.youtube.com/live/VOBSl0Re_6Q?si=HfiM0NXDxvP4PNal]

Continue building your systematic trading education through the comprehensive VCP trading guide for ASX markets, covering pattern identification, entry timing, position management, and exit strategies.

About This Analysis: This article extracts insights from an interview with Gary Glover (AR 259215), Authorised Representative of Novus Capital Limited (AFSL 238168), conducted by Christopher Hall, Finer Market Points.

General Advice Warning: This content provides general market commentary and educational analysis only. It is not personal financial advice and has not been prepared taking into account your individual objectives, financial situation, or needs. Before making investment decisions based on this information, you should consider consulting a licensed financial adviser. Presenters may hold positions in securities discussed.

Finer Market Points Pty Ltd, CAR 1304002, AFSL 526688, ABN 87 645 284 680. This general information is educational only and not financial advice, recommendation, forecast or solicitation. Consider your objectives, financial situation and needs before acting. Seek appropriate professional advice. We accept no liability for any loss or damages arising from use.