Merlin-MTL : My $50 To $1 Million in 39 trading days quest...

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Merlin-MTL
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Merlin-MTL : My $50 To $1 Million in 39 trading days quest...

Postby Merlin-MTL » 03 Jan 2023

Hi guys,

I'm the new guy here but I've been looking at this stock market since 2003. I have been on the TS forum since 2005 after I lost a few 1,000s and promised myself that I will not get back in the game until I have a killer system and money management technique and I think this year is the one.

Yes I know...I know... the title is a little bit bold and many here will think "here's another wacko :roll: " but pay attention to what I'm about to say and you will soon realize that all this makes sense.

I will replicate what I have posted above on other forums and hopefully this time, people will get it. This is the first of many posts to come here where I explain in details how I'm gonna get there.

Here are the 3 steps on how I will achieve this goal...

Step 1: Use a money management technique that everybody but me is laughing at.

Step 2: Throw in the garbage (almost) everything that the "experts" have taught me regarding which charts and bars to use when trading. I call this chapter "Dinosaurs Vs HD Trading".

Step 3: Create killer indicators that nobody have seen and tell why I use them instead of others.

For now here's my money management technique and the chart that I will use and explain in details in futures threads why I use them.

As you can see, if you double your contract each day, you can go from $50 to $1 Million in 39 days.

Now how the hell I'm gonna do this...well.. stay tuned. :wink:

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On this screenshot below, you see my chart with 3 important indicators I created in EasyLanguage and will post them here in a future thread (consider this my New Year's gift to you).

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See ya in the next thread :wink:

Merlin

P.s. I would have doubled my $50 M2K contract a total of 7 times today (Jan 03 2023) so maybe the 39 days period is too long here. :wink: :lol:
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Merlin-MTL #1 : My $50 To $1 Million in 39 trading days quest... (Step 1: Money Management)

Postby Merlin-MTL » 03 Jan 2023

Hello, welcome back to this quest on how to go from $50 to $1 Million in 39 days (or less).

Step 1: Money Management Technique


This is step 1 regarding my plan to achieve this goal but before I get there and be called "crazy" or something worse like "that's impossible" let me tell you about a conversation I had with my broker. It's not the exact words and it was about Forex pips instead of Futures ticks/pts but you will get it.

- Merlin: During Daytrading hours, the Micro Russell 2000 contract would cost me $50 correct?

- Broker: Correct.

- Merlin: So this means that by risking only $50 of my trading account, and let's say I make 10 pts today, then each one of those points would pay me $5 each... correct?

- Broker: Correct.

- Merlin: So this means that I would have made $50 (10 points X $5 each point) out of a $50 Initial Investment. Correct?

- Broker: Correct.

- Merlin: If you do the math, this $50 profit daily is exactly a 100% ROI on the $50 Initial Investment, in other words, I would have doubled my investment and my M2K contract...correct?

- Broker: Correct

- Merlin: Now did you know that at a 100% ROI (10 pts) per day, you can turn that initial investment of $50 into over $1 Million in about 40 trading days if you keep reinvesting the profit?

- Broker: Maybe that's possible, although I have never seen a client do it for real.

- Merlin: Yeah I know, everytime I say the "M" word (Million) people either start laughing or call me crazy but when I ask them if its possible to make 10 points per day on a M2K chart, many will say "Yeah that's possible". However, when you tell them that by making those 10 pts, they have doubled their investment and if they do that each day, they will make $1 Million in about 40 days then they think I'm crazy... Many traders can do that 10 pt profit so why not continuously reinvest their gains and go for the Million in 10 weeks?

- Broker: Good point. That's because fear plays a big role in trading. Maybe they think that because the numbers get bigger, they won't be able to make their 10 pts daily.

- Merlin: Yeah, that's my assessment too. So even though it is possible to get that 10 pt profit daily the fear that traders have of losing big numbers will stop them from doubling down and get to the Million $?

- Broker: Looks like it.

- Merlin: Alright, thank you, it was nice to get the pov of a broker here. So maybe I'm not that crazy after all. hehe It may be VERY BOLD but still doable so have a nice day sir.

- Broker: You too.

So as you can see, it is possible to make 10 pts daily using the Micro and Mini Russell 2000 and double your contract all the way to $1 Million but you will need to have a killer trading system and you will need to be very bold and also need a killer money management technique and this is the topic for today.

Let's start on the lower left of the screenshot posted below shall we...

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What you see is $200 split into 4 block of $50, each one letting you buy 1 contract of the Micro eMini Russell 2000. Then as discussed with my broker, if you make 10 pts at $5 each, you just made a profit of $50 and doubled your money and are now you're on column B with a total of $100 (initial $50 with your $50 profit).

You then repeat the process the next day and go from $100 (2 contracts) to 4 ($200) and so on.

Everybody follows me here?

Before you tell me it's impossible, just look at the bottom of this post, you will see that today (January 2023), I would have made not one but SEVEN of those 10 pts trades.

Here's the scary part and why most traders will never attempt this quest...

Yes you can double your contracts by making 10 pts but if lose 10 pts, you now have a 100% drawdown and you lost it all back. :(

So the goal is not just to climb the ladder to $1 Million but to climb it safely by creating safety nets along the way (see orange blocks) so that if you get a bad day and lose those 10 pts, you will have safety nets there to continue the climb.

I don't know exactly what the volatility of the M2K will be when we start buying or selling 50 or 100 contracts but that's something I will see as I climb up the ladder.

Now you know how the climb will be done, by buying ONE M2K contract at $50, make 10 pts at $5 each to double the contract and then build on them all the way up to 1 Million.

Now to avoid losing those 10 pts and lose it all back, I will have to stop, split my contracts and create a safety net but also find a killer trading system so that I lose as little as possible and that is the topic of the next discussion...

See ya in the next thread,

Merlin

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Merlin-MTL #2 : My $50 To $1 Million in 39 trading days quest... (Step 2: Dinosaurs Vs HD Trading)

Postby Merlin-MTL » 03 Jan 2023

Hello, welcome back to this quest on how to go from $50 to $1 Million in 39 days (or less).

Step 2: Dinosaurs Vs HD Trading

This is step 2 of my goal and this ones looks at ways to reduce at best the losses so that you make your 10 pts and double your contracts on the way up to the $1 Million goal but don't lose 10 pts and lose it all.

In step 1, you heard me talk about my Money Management system to make 10 pts and double my M2K contract but if you do the math, you will see that if you get a 100% R.O.I. by getting 10 pts, you also get a 100% Drawdown if you lose those 10 pts.

So again the goal is to make sure we don't have any or the least amount of those 10 pts drawdowns.

To do this, we have to reinvent the wheel almost here and go against almost every guru out there by going with bars that they either don't know or don't use and I'm talking about Renko and Kase Bars here.

What is Dinosaur Trading you ask? Well, no need to Google it because I just invented it. ;-)

Basically it's doing things the old fashion way with outdated bars like Minute Bars and use indicators that are lagging. What's wrong with Minute bars you may ask? After all, the big institutions and Elite Traders are still using them.

Well... Minute Bars have 2 main problems:

1- A minute chart makes too many bars when the price is standing still.

If the price hovers within the same point on your M2K or RTY chart for one hour, chances are, on a 1 min chart, you will have 60 bars lined up like cute little ducks side by side while in fact all these bars are totally useless because, the market is not moving at all so there is no need for tons of new bars.

2- When the price explodes, a minute chart doesn't make enough bars.

For example, let's say that the price did 5 pts within 1 minute. This means that you will see 1 HUGE 5 pt white or green candlestick bar....JUST ONE BAR. Once again totally useless for traders because when the bar closes, it's too late, you missed the boat, the big move has been done. Even worse, if that 5pt bar turned against you, you not only lost that trade, you lost half of your entire initial investment.

You can't risk losing 5 pts in one trade, you will be wiped out in no time before you can even start this Million $ climb. What you need is tiny little bars that are making you lose less than 1 point.

Here's a 7 pt bar on a 1 minute chart.

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How can you make money when your automated strategy that buys or sells on the next bar at market uses bars that can be 5, 7 pts or more? You will lose your shirt that way. You need to reduce your bar size in order to reduce your losses and that is done with more modern bars like the Kase or Renko bars here.

Here's a 1 pt (10 ticks) bar chart.

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And here's the bars that I use. They are 0.1 pt (1 tick) Renko bars, that's right, I use a ONE TICK BAR chart (I am also looking at 2 ticks Renko bars).

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I call this HD TRADING because it's like having charts on a screen with super high resolution (ex: 4K).

What this does is reduce my stop losses to only... get this.... 3 ticks. :twisted:

Now you might say "... yeah but... with such short stop losses, you might be stopped out all the time?" and the answer is yes but not as many times as you would think.

On today's trading day, I got stopped out about 20 times.

So that's 20 trades X 0.3 pt = 6 pts of losses.

Today I made 7 trades of 10 pts of profit.

That's 70 pts or 7 times where I doubled my initial $50 investment.

Not bad hey? :wink:

Here's my 1st trade today...

I got in LONG at 1,788.3 and got out at 1,798.3 about 1 minute and 30 seconds later with 10 pts. :lol: :lol:

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So now you know about my doubling Money management technique and the type of bars and charts I use. Now it's time to look at the indicators I programmed to do that on a daily basis.

See ya on the next thread 8)

Merlin
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Merlin-MTL #3 : My $50 To $1 Million in 39 trading days quest... (Step 3: My Indicators)

Postby Merlin-MTL » 03 Jan 2023

Hello, welcome back to this quest on how to go from $50 to $1 Million in 39 days (or less).

Step 3: My Indicators

This is step 3 of my quest to the $1 Million.

In the Step 1 part, we talked about the Money Management which is to double our contract by doing 10 pts but to leave safety nets behind in case things turn bad.

In the Step 2 part, we talked about using modern bars like Kase or Renko bars that can be shrunk to 0.1 pt or 1 TICK in order to have super tight stops that cost NOTHING and reduce our losses to the max.

In this 3rd and final part, we will talk about the trading system I use to make those 10 pts.


Find the trend they say....

If you bought a bunch of books or DVDs on trading, you probably heard the term "Find the trend... buy the dips" or "The trend is your friend" etc.. but how do we find the trend in our charts?

Of course there are MAs or Moving Averages but they lag a bit too much for my taste. Another way is by using an indicator that will give you a price channel and when you see that channel, you also see the trend's direction.

One of the channel that I prefer is the Donchian Channel because it's based on the Highest High and the Lowest Low that the price did during X number of bars back. The problem here too is that this type of channel lags too and I wanted a channel that is based on the very last bar the chart is printing, not what happened 100 bars ago.

With EasyLanguage, you can program and create all kinds of new indicators and I contacted a pro on the topic (Thanks Tim Phila) who help me program the EL for the type of price channel that I wanted to see on my charts.

I added some lines to Tim's code and got a price channel that has a fixed price. it is NOT based on previous X bars but on what the price is doing on the very last bar so it does not lag unless you decide to use a big price channel but you can fix this by having a channel with a smaller price range like I will show you below.

This is the first draft of the indicator I wanted to have.

As you can see, the Top and the Bottom lines are fixed. They only change when the price pushes the top higher or the bottom line lower.

This is my price channel with the midline in the center..

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Then what I did was to add a midline that you find in most channels and what I found was VERY COOL. I call it my Square MA because it moves in steps unless like most MAs out there.

Then I removed the top and bottom line and got this cool MA.

This is what it looks like compared to a 50 period Simple MA.

You can see here that the 50 SMA is moving up and down based on the green/red color that I have programmed it with while my square MA is remaining the same color most of the time. It goes up cyan and turns magenta when it goes down.

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So I added a twist to the channel by removing the MA in the center and added a BarHigh and BarLow code to them and that created a very cool price channel that you can see here....

I colored it dark blue when the price was going up and dark red when the price was going down.

Here's what it looks like in an uptrend...

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Here's what it looks like in a downtrend...

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Damn this channel looks sexy don't you agree. :lol: :twisted:

It's not perfect as I mentioned above when you use big channels like this one around 25 pt in height but this is where the Square MA comes in.

If you put 2 square MAs together, one with a very small range (ex: 0.2 pt) and another with a bigger range (ex: 6.3 pt) you arrive at what I call my "Merlin Cloud".

This is what it looks like. It colors the cloud light blue when the price goes up and light red when it goes down in the price channel.

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Cool huh?? :twisted:

I can't post the ELDs of the indicators because I think I have exceeded the number of attachments for this post so I will again in the next post.

So there you have it, you have my channel, my cloud and my square MA below, everything you need to make your 10 pts daily. You have my money management chart to double your contracts and lay some safety nets along the way so that when it gets ugly, you don't lose it all.

In my next post I will talk about the trading system. It's not programmed as a strategy and automated system yet because all this is brand new, I just came back from a 3 year old break from trading and tried to catch up with my EL code and Multicharts last December.

See ya in the next post.
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Re: Merlin-MTL #3 : My $50 To $1 Million in 39 trading days quest... (Step 3: My Indicators)

Postby Merlin-MTL » 03 Jan 2023

All the .pla files are located in the attachments below...

I also just added the 2 workspaces that I use (Merlin1 and Merlin2).


This is the code for the Merlin-Channel.

Code: Select all

Input: X(25),Price(C),C1(RGB(0,0,70)),C2(RGB(70,0,0)); Vars: X2(X+0.1),HH(0),LL(0),Midline(0),HH2(0),LL2(0),Midline2(0); If High >= HH then HH = High; If LL < (HH - X) then LL = HH - X; If Low <= LL then LL = Low; If HH > (LL + X) then HH = LL + X; Midline = (HH + LL)/2; If High >= HH2 then HH2 = High; If LL2 < (HH2 - X2) then LL2 = HH2 - X2; If Low <= LL2 then LL2 = Low; If HH2 > (LL2 + X2) then HH2 = LL2 + X2; Midline2 = (HH2 + LL2)/2; // Conditions Condition1 = Midline > Midline2; Condition2 = Midline < Midline2; // Plots If Condition1 then Begin plot1(HH,"HH",C1,Default,3); Plot2(Midline2,"Midline",C1,Default,3); End; If Condition2 then Begin Plot3(Midline2,"Midline2",C2,Default,3); plot4(LL,"LL",C2,Default,3); End;

This is the code for the Merlin-Cloud.

Code: Select all

Input: X(0.2),X2(6.3),C1(blue),C2(red); Vars: HH(0),LL(0),Midline(0),HH2(0),LL2(0),Midline2(0); If High >= HH then HH = High; If LL < (HH - X) then LL = HH - X; If Low <= LL then LL = Low; If HH > (LL + X) then HH = LL + X; Midline = (HH + LL)/2; If High >= HH2 then HH2 = High; If LL2 < (HH2 - X2) then LL2 = HH2 - X2; If Low <= LL2 then LL2 = Low; If HH2 > (LL2 + X2) then HH2 = LL2 + X2; Midline2 = (HH2 + LL2)/2; // Conditions Condition1 = Midline > Midline2; Condition2 = Midline < Midline2; // Plots If Condition1 then Begin plot2(Midline,"Midline",C1,Default,0); Plot4(Midline2,"Midline2",C1,Default,0); End; If Condition2 then Begin plot2(Midline,"Midline",C2,Default,0); Plot4(Midline2,"Midline2",C2,Default,0); End;
This is the code for the Merlin-MA-PriceX

Code: Select all

Input: X(25),Price(C),C1(blue),C2(red),DotSize(5); Vars: HH(0),LL(0),Midline(0),Midcolor(0); If High >= HH then HH = High; If LL < (HH - X) then LL = HH - X; If Low <= LL then LL = Low; If HH > (LL + X) then HH = LL + X; Midline = (HH + LL)/2; // Conditions Condition1 = Price > Midline; Condition2 = Price < Midline; // Plots If Condition1 then Begin MidColor = C1;End Else If Condition2 then Begin MidColor = C2;End; plot1(Midline,"MainLine",MidColor,Default,DotSize);
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Last edited by Merlin-MTL on 04 Jan 2023, edited 1 time in total.

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Re: Merlin-MTL #3 : My $50 To $1 Million in 39 trading days quest... (Step 3: My Indicators)

Postby Salzburg » 04 Jan 2023

Thank you for sharing your indicators, would you be able to share your Workspace, I struggle to get the same view as you share in your pics.. thanks .. looks interesting

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Re: Merlin-MTL #3 : My $50 To $1 Million in 39 trading days quest... (Step 3: My Indicators)

Postby Merlin-MTL » 04 Jan 2023

Thank you for sharing your indicators, would you be able to share your Workspace, I struggle to get the same view as you share in your pics.. thanks .. looks interesting
Just added the 2 workspaces I use (Merlin1 and Merlin2). You can download them above..

Merlin 1 is the one I use to get into the trades and Merlin2 is the one I use to look at the bigger trend/timeframe.

Here's Merlin2

I use the FlexRenko bars set at 16,15,15 to give me cool bars and the big picture of where the trend is going.

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Then I move to the Merlin1 chart.

On this one I use regular Renko set at 3 ticks. It says 3 points but if you look at the green rectangle I did on my chart, you will see that the difference between the Low and the High is just 3 ticks.

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Next I added the Merlin-Channel indicators set at 25 pts. This creates 2 halves where the lower half is dark red and the upper half of the 25 pt channel is dark blue.


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Then I added the Merlin-MA-PriceX indicator which is the midline between the upper and lower half channels and indicates when you need to trade on the LONG or SHORT side.

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Finally, I added the Merlin-Cloud indicator that lets me see the short term trend direction. Lighter blue means go LONG and lighter red means go SHORT.

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If you have any questions let me know.

Merlin
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Re: Merlin-MTL #3 : My $50 To $1 Million in 39 trading days quest... (Step 3: My Indicators)

Postby Merlin-MTL » 04 Jan 2023

Here's a typical LONG trade entry...

1- The dark blue channel (Long Timeframe) is dark blue so we ONLY trade on the up side.

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2- The Renko price bars enter the dark blue channel and do a little bounce (go back down as a blue bar and then back up with a white bar). That's your ENTRY point.

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3- The price moves up and make the 10 pt profit that you need to double you money. Congrats. 1 day done, 38 more to go to reach the Million $. :twisted:

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Cheers,

Merlin
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Re: Merlin-MTL #3 : My $50 To $1 Million in 39 trading days quest... (Step 3: My Indicators)

Postby Merlin-MTL » 04 Jan 2023

Btw, there was another entry near the market open.

You can see that the Merlin-Channel (Long Timeframe/Trend) is dark blue so we trade LONG but the Merlin-Cloud (Small Timeframe/Trend) is red on the lower left so we wait until the cloud turns blue which it does around 9:35.

It turns blue and the Renko bars do a little bounce at 1,777.8 which is where we enter LONG.

We exit at 1,787.8 with our 10 pts. 8)

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Cheers,

Merlin
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