The Pullback Strategy That Helped Martin Luk Win the U.S. Investing Championship

Finance/Trading context & performance claims

• The video profiles Martin Luk (named “2025 US Investing Champion”) and his pullback trading strategy within a broader trading framework.
• Claimed performance:
  • -50% drawdown early in his trading journey (he continued refining).
  • 283% annual return in the prior year.
  • 969% return in a single year (the championship year).
  • The narrator emphasizes very large cumulative returns over ~2 years.

Key strategic objective (risk/reward)

“Risk as little as possible while maximizing the upside on swing trades.”

• Uses tight stop-losses to improve reward-to-risk (reward multiples).

---

Methodology / step-by-step framework (pullback strategy)

Risk framework (stop-loss compression effect)

• Tighten stop-loss width (example: 3% → 1.5%) to increase the number of “risk multiples” captured.
• Stated effects:
  • On a trade that gains ~25%, reducing stop from 3% to 1.5% adds ~8 extra risk multiples.
  • On a 50% winner, the same stop reduction adds ~17 additional risk multiples.

Step 1: Screen for momentum / trending leaders

• Scan top performers across 1-, 3-, and 6-month time frames.
• Filter: stocks up >30% in each of those periods.
• Select the top 20–30% by performance (exceptional momentum).
• Optional liquidity filters:
  • Market cap > $100M
  • Cash volume > ~$1M (to avoid illiquidity/penny stocks)

Step 2: Identify consolidation bases

• Look for consolidation in each shortlisted stock.
• Preference: longer consolidations (often >8 weeks) with a history of respecting AVWAP and EMAs.

Step 3: Confirm strength inside the base

• Enter only if the stock shows strength (avoid “weakness in weakness”):
  • Avoid stocks trading below declining 9 EMA and 21 EMA
  • Avoid lower highs / lower lows
• Aim to buy temporary weakness inside an uptrend.

Step 4: Define entry triggers (the pullback)

• Use major support zones within the consolidation.
• Tools:
  • Anchored VWAP (AVWAP) anchored to important swing highs/lows
  • Exponential moving averages: 9 EMA, 21 EMA, 50 EMA
  • Price action: prior highs/lows and unfilled gaps as support zones
• Entry timing concept:
  • Buy the intraday dip to support when price reclaims levels (e.g., AVWAP and/or EMAs).
  • Prefer entries where the day turns positive or close is above support.

Step 5: Exits / risk management

• Emphasizes tight stops (often ~1–4% risk trades in examples).
• Trailing exit rules mentioned:
  • Close below 9 EMA as an exit trigger (various examples)
  • Trailing stop using 21 EMA in at least one example

---

Instruments / tickers mentioned (with strategy examples)

IonQ (IONQ)

• Example: consolidation with ~67% drawdown from top over ~3 months, then +100% next 3 months.
• Entry described via AVWAP reclamation and 9 EMA reclamation:
  • AVWAP reclamation: ~7% stop loss
  • 9 EMA reclamation: <4% stop loss
• Exit example:
  • Close below 9 EMA: ~76% profit, cited as ~20x risk-to-reward
• Another setup: entry near close with stop at low:
  • <4% risk trade

Tesla (TSLA)

• Long consolidation ~5 months.
• Entry: near close / reclaim of positive territory:
  • <1% stop-loss
• Subsequent move:
  • Stock closed below 9 EMA after being up ~24%
  • Cited as ~24x risk-to-reward

AMPX

• Base >2 months; higher lows; reclaimed 9 EMA, 21 EMA, and AVWAP.
• Entry triggers:
  • AVWAP reclamation risk: ~2.2%
  • 9 EMA reclamation risk: ~1.2%
• Trailing exit examples:
  • Trailing with 9 EMA: ~40% profit
  • Trailing with 21 EMA: ~55% trailing

SanDisk (SNDK)

• Consolidation ~2 months.
• Entry timing: enter after reclaim/positive day:
  • ~4% stop loss
• Subsequent result:
  • Stock up ~126% when it later closed below 9 EMA
  • Cited as ~31x risk-to-reward

RMLD

• Consolidation ~5 months; higher lows; reclaimed EMAs.
• Entry:
  • Flush entry risk: ~1.5%
• Outcome:
  • Stock up ~45% before closing below 9 EMA
  • Cited as ~30x risk-to-reward
• Trailing:
  • Trailing with close below 21 EMA still captured ~84% return

SYRE

• Consolidation; AVWAP and rising 21 EMA as key support.
• Entry:
  • Near close: ~3% stop loss
• Outcome:
  • Up ~62% at time of closing below 9 EMA (~20x risk cited)
  • “Now up over 80% from entry” while still not closing below 21 EMA

---

Key qualitative “what to look for” checklist (strategy signals)

Strength inside consolidation

• Higher lows
• EMA and AVWAP reclamation
• Rising EMAs
• “Price surfing” along EMAs
• Narrowing range

Intraday flush onto multiple supports

• Flush supports combining:
  • AVWAP + EMAs
  • AVWAP + horizontal supports
  • multiple combinations

Timing

• Buy the flush when the stock turns positive or close is above the support levels.

Stops

• Prefer super tight stop losses (explicitly stated as a goal).
• Expectation: these pullback buys “fail a lot more than they work,” but expectancy remains positive due to massive winners.

---

Risk/expectancy claims (probability vs payoff)

• Stated win-rate and payoff profile:
  • Martin can be wrong ~85% of the time
  • Yet average win is close to ~7x average loss
• The narrator frames the “holy grail” as huge multiples of risk even with low hit rate.

---

Disclosures / disclaimers

• No explicit legal “not financial advice” disclaimer appears in the provided subtitles (only general sign-off such as “As always, thanks for watching.”).

---

Presenters / sources mentioned

• Martin Luk (subject of the strategy)
• Kristjan Kullamägi (mentioned as an influence on parts of his trading style; pullback entry technique described as Martin’s own)
• The video narrator/channel is referenced indirectly via “we/our strategy,” but no specific person or channel name is provided in the subtitles.