283% Gain in 1 Year - The Story of the 22-Year-Old Swing Trader

Summary

Martin Luk, a 22-year-old swing trader, discusses how he developed a disciplined, breakout-focused approach after early overtrading and large drawdowns. He placed 283% in the 2024 U.S. Investing Championship (USIC). Because he entered the competition in February, January was excluded from his competition result. He says his full-year 2024 return was 340%.

His central principle is to prioritize decision quality and the amount at risk rather than trying to predict a trade’s eventual return. He favors tight, defined-risk entries that can produce large gains relative to the initial risk, while accepting a low win rate.

Trading Approach and Framework

Style, setups, and chart context

Luk swing trades and follows trends, typically holding winning stocks for one to three weeks. In his 2024 statistics, the average winner was held for five days. He often cuts a losing trade on the day of entry if it is not working.

His setups include breakouts from tight ranges, earnings-related moves, parabolic moves, and—increasingly—pullbacks. He prefers entries near a price level that provides a clear, tight stop.

He uses daily and weekly charts. The weekly chart helps him assess the larger trend and base structure; a strong weekly base adds conviction but is not a requirement.

Entry triggers

Common entry triggers include:

• A break above the prior day’s high, particularly after an inside day or tight consolidation.
• The opening-range high: typically the one-minute range before the first five-minute candle forms, then the five-minute range afterward.
• Intraday range highs for possible re-entries after an opening-range breakout fails, provided the setup remains strong.
• Other levels, including intraday highs, prior-week highs, and anchored VWAP.

Stops and position management

Luk commonly places the initial stop at the day’s low. If that would make the stop wider than about 5%, he may instead use the low of the entry candle. He tries to keep stops below half the stock’s ADR (average daily range), with about 5% described as his maximum stop.

He described risking around 5% of his portfolio per trade, with exposure varying according to his performance and market conditions. His maximum position size was 35%, reduced to roughly 25–30% for small- and micro-cap stocks because of gap risk. The interview does not clarify whether “5%” means portfolio loss at the stop or another sizing convention.

Indicators and exits

Indicators he uses include the 9-, 21-, and 50-period EMAs, dollar volume, and anchored VWAP.

He uses both selling into strength and trailing stops. He may trim roughly 10–15% of a position at a time, especially when a stock is extended, a gain exceeds three R, the position grows above 35%, or the move looks parabolic. For trailing stops, he commonly uses the 9 EMA, sometimes the 21 or 50 EMA in stronger trends, as well as swing lows or bar lows. He tends to exit short positions faster than long positions.

Market feedback and research routine

Luk assesses whether his own equity curve and trades are working, alongside market indices and the distribution of leading versus lagging stocks on his watchlists. If his trades are working despite weak indices, he may stay invested but become more conservative. If his trades are failing, he takes that as feedback to reduce risk. He cautions against letting other traders’ opinions dictate decisions when their systems differ.

His research routine covers three scan groups:

• Premarket gappers on high volume.
• Prior-session top performers.
• Leading stocks ranked by recent performance.

He looks for clusters of strong stocks in the same sector or theme as a possible sign that money is flowing there. His routine takes about 30 minutes in a strong bull market, or 15–20 minutes in a correction or quieter market. His watchlists separate leaders, mediocre and lagging stocks, large-cap “pillar” names, and more- versus less-liquid growth stocks.

Trade review and development

Luk advocates journaling trades to review entries, exits, win/loss statistics, and drawdowns. He warns against revenge trading, increasing risk during losing streaks, ignoring stops, and blindly copying other traders. His stated aim is to reduce maximum drawdown and improve execution over time.

Performance and Risk Figures

• 2024: 283% in the USIC competition and 340% for the full year, according to Luk, since January was not included in his competition account.
• 2024 results cited: 104 winners and 319 losers, a 23% win rate, an average winner of about 15%, and an average loser of about 3%. He presents these figures as an example of a low-win-rate strategy with larger winners.
• During a difficult stretch in 2024, he reports an approximately 30% drawdown over three to four months. He attributes much of it to undisciplined, random trades while also completing a bank internship.
• In 2022, he says he made a small, single-digit positive return in a bear market and largely avoided forcing long trades or bottom-fishing. He also describes an earlier 40–50% drawdown after his 2021 meme-stock trading.
• In a later January period discussed in the interview, he reports an 18% drawdown and says he hopes to keep future drawdowns below 15%. The specific year is unclear in the subtitles.

Trade Examples and Lessons

• GME, January 2021: Luk bought near $501, close to the reported $513 high, during the meme-stock frenzy. The stock quickly fell sharply, and he lost about 50% on the trade. He describes it as a painful lesson in avoiding euphoric, parabolic entries and managing risk.
• Kaufana/Kafana (name unclear in subtitles), 2023: A breakout trade rose about 100% in two weeks and helped him recover from his prior drawdown. He calls it a turning point because he shifted from trying to win back losses to focusing on disciplined decisions.
• SMCI: He says the weekly chart had built a base for about six months. The trade worked, but he exited too early and estimates that failing to follow his exit rules cost him more than 40R. He cites the trade to illustrate the value of weekly-chart context and the cost of discretionary exits.
• COIN and Bitcoin: Luk used Bitcoin’s strength and an inside-day setup as context for a COIN trade, seeking a manageable stop rather than waiting for a wider conventional breakout. He also describes a later COIN gap-up trade around the U.S. election, which he viewed as favorable for crypto. He entered around the opening-range high and later exited as the stock weakened near the 9 EMA.
• GME and AMC, May: He describes quick, unusually large winning trades. On GME, he initially risked about 3%, took partial profits at 12R, and later exited near a parabolic move and potential resistance. He says the AMC trade produced about 54R, an exceptional outcome he does not expect to occur regularly.
• SOFI: A cleaner breakout followed a short consolidation near the 9 EMA. He used the day’s low as his stop, trimmed at about 6R, and exited the remainder after weakness below the 9 EMA and deterioration in growth-stock breakouts.
• LMND (Lemonade): A tight-flag/inside-day setup followed a rapid advance. Luk sold into strength as price accelerated with unusually high dollar volume and approached weekly resistance.
• SOUN (“Sound” in the subtitles): He regretted selling after a bearish-looking reversal below the 9 EMA; the stock subsequently found support and made another substantial move. The trade reinforced how difficult it can be to follow exit rules and how a trader can miss a further leg.
• SMTC: Luk failed to honor his planned stop and took a loss of roughly 10–12%. He calls it a valuable reminder to use a hard stop rather than rationalize a failing position. He notes that the stock later gapped down more than 20%.
• SERV (“Surf/Serve” in the subtitles): A small-cap gap-down caused a substantial loss; he says the position contributed roughly 8–9% to a single-day drawdown. He uses the example to stress the gap risk in small- and micro-cap stocks and the importance of limiting exposure.
• Short setups: Luk looks for weak stocks rebounding into clustered, declining moving averages and uses nearby resistance—often the day’s high—to define risk. Examples discussed include Reddit (RDDT), SMCI, and MicroStrategy (MSTR). He generally takes short profits sooner and does not expect to capture the entire decline.

Assets and Instruments Mentioned

Stocks and tickers: GME, AMC, SMCI, COIN, SOFI, PLUG, FSLR, AMZN, ADBE, LMND, SOUN, SMTC, MSTR, HOOD, SERV (rendered as “SURF/Surf” in part of the transcript), and Reddit/RDDT.

Unclear names in the subtitles: “QBT” and “CRSK” are not reliably identifiable from the transcript. “Kafana/Kaufana” is also unclear. “EMP” is mentioned in a comparison but is not clear enough to identify confidently.

Other assets and benchmarks: Bitcoin; BOIL, a natural-gas ETF; SPY and QQQ as market benchmarks; and the Dow, Nasdaq, and S&P indices. Apple, Microsoft, and Nvidia are discussed as influential large-cap stocks.

Sectors and themes: Growth stocks, small- and micro-cap stocks, crypto-related stocks, natural gas, and quantum stocks as a market theme.

Disclosures and Cautions

No explicit “not financial advice” disclaimer appears in the subtitles. The discussion is an interview about one trader’s approach, not a guarantee of performance. Luk emphasizes that large winners are rare, missing opportunities is normal, small-cap gap risk can be severe, and his own trading has included substantial drawdowns and mistakes.

Presenters and Sources

Presenters: Martin Luk and host Richard Moglen (the host’s name is rendered imperfectly in the subtitles as “Richard Mglin”).

Sources and trading influences cited: Christian Qullamagi, Mark Minervini, Jay Law, Nicholas Darvas, Dan Zanger, Oliver Kell, and traders identified in the interview as Nick and Sila. The discussion also references a post by Jared Tendler on the “inchworm” concept. The episode is from the TraderLion podcast.