The Winning Stock Trading Strategy from the 2023 US Trading Champion
- FinancialWisdom
- Apr 18
- 4 min read
Updated: Sep 7
Marios Stamatoudis: Insights from a Top Trader
Video Transcript Below:
An Overview of Marios Stamatoudis' Trading Journey
In today’s video, we deep dive into the trading strategy of Marios Stamatoudis. He is the swing trader who achieved an astounding 291% return in less than a year, securing the fourth spot in the 2023 US investing championship.
The Beginning of His Trading Path
Marios initially studied Food Science and Human Nutrition at the Agricultural University in Athens. He struggled to engage with food analysis and began seeking ways to earn money online. A simple Google search led him to stock trading, which ranked highly as a way to generate income.
With minimal knowledge, Marios began day trading. However, excessive leverage caused him to blow his account in just three days. This experience was a harsh lesson. Shaken but determined, he enrolled in courses and alert services to improve his skills. Unfortunately, his efforts only resulted in trading failure for seven more days.
Learning to Trade: From Failure to Success
Realizing that he needed to understand trading better, Marios began to study diligently. The progress he made motivated him to take control of the process. Soon, he developed a profitable strategy by addressing the gaps in his trading discipline.
His journey took a positive turn in 2017 when he posted his first breakeven year. In 2018, he recovered past losses and expenses, achieving impressive triple-digit returns in 2019.
The Transformation to Swing Trading
A key moment in his trading journey occurred in 2020. While day trading, Marios felt frustrated watching stocks climb significantly after he sold them. Determined to improve, he immersed himself in books by renowned swing traders like William O'Neil and Mark Minervini.
Transitioning to swing trading, Marios incorporated elements from his day trading framework and found success. He discovered the Twitch stream of Christian Kullamägi and noticed similarities in their trading approaches. With newfound knowledge, he fully embraced swing trading.
Competitions and Continued Success
After completing his mandatory military service, Marios resumed swing trading in 2022. By late January 2023, he entered the US Investing Championship and secured an impressive fourth place.
Marios' Swing Trading Setups
Marios follows three key setups: Classic Breakouts, Episodic Pivots, and Parabolic Shorts. There is a significant overlap between these setups and those used by Christian Kullamägi.
Classic Breakouts
In a classic breakout setup, Marios seeks stocks that have demonstrated a significant move over the prior one to six months. However, he does not specify an exact percentage of increase. Kullamägi typically trades this setup with stocks showing a 30-100% price increase.
After such a price jump, consolidation follows, where the price creates higher lows while following the 10, 20, or 50-day moving average. This consolidation period can last from two weeks to two months before a breakout occurs. Marios sets alerts for stocks when their prices reach the trendline from consolidation patterns.
For example, he successfully traded GREE, which formed a down channel after a 140% move. The stock broke out at $2.80 and surged 200% in two weeks. He placed a stop loss at $2.40, resulting in an 11% risk for a potential trade of up to 20 times the reward.
Episodic Pivots
In an episodic pivot, a previously dormant stock unexpectedly gaps up due to a catalyst. Catalysts can include earnings surprises or regulatory changes. Marios quantifies gaps as being 5% or more. Larger gaps typically offer better trading opportunities.
His entry point may vary, but Kullamägi recommends using the opening range high for these pivots. Stop losses are set at the lows of that day.
Marios has seen significant wins from this setup. For instance, in December 2023, he traded Gigacloud Technology during a 13% gap up from the previous day's close due to an earnings surprise. The stock generated a remarkable 70-80% return in just one month, achieving a risk-reward ratio of 1:8.
Parabolic Shorts
The parabolic short setup focuses on stocks that have experienced exaggerated moves quickly, typically between 100% and 400%. Shorting such stocks can be risky but can yield significant rewards when done right.
For this setup, Marios emphasizes mean reversion. In his own words, “think of stocks as rubber bands; when they stretch too far, they can snap back.” He looks for signs of stress, often indicated by the stock failing to maintain momentum. The easiest entry method involves shorting the stock after it breaks the opening range low.
Marios places his stop loss at the day's high or the high of the entry candle, depending on how far the daily high is positioned.
Performance Metrics
During the championship, Marios achieved a win rate of 32%. This rate fluctuated between 25% in poor markets and 40% in favorable conditions. He executed approximately 400 trades throughout the year, averaging two trades per day.
His average gain-to-loss ratio was 5:1. This means that, on average, his gains were five times his losses. The system displayed a strong positive expectancy despite a low win rate, as a few substantial winners outweighed many smaller losses.
Achieving a 291% annual return is commendable, especially considering Marios did not utilize leverage in his trading. His risk management strategy involves risking only 0.25-0.4% of his trading account on each trade. This conservative approach enables him to endure even a streak of ten losing trades while only experiencing a maximum drawdown of 4%.
Final Thoughts on Trading
The trading strategies and discipline Marios exhibits can serve as a guide for all aspiring traders. His journey shows that understanding the fundamentals and using effective strategies can lead to remarkable annual returns. Marios’ alignment with Kullamägi's methodologies further illustrates the importance of learning from others.
For those interested in enhancing their trading knowledge and techniques, resources are available through the links below.
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