Introducing Merlin

A quantitative strategy for trading stocks and ETFs

No one should have to navigate the markets alone

Many greats had advisors by their side, guiding them through the tough decisions, including none other than King Arthur and his trusted counsel, Merlin.

Allow Merlin, a quantitative strategy developed by the Trade Risk, to guide you through the chaos of markets and help you profitably trade individual stocks and ETFs.

(see Performance Disclosures: Equity Curve)

Transparent performance. Real results.

We built two model portfolios to showcase Merlin's track record and profitability. A Margin portfolio, which allocates up to 150% invested (50% margin), and a traditional IRA portfolio, which uses no leverage.

As a subscriber, you'll receive a position size calculator pre-loaded with our model portfolio defaults but you are encouraged to adjust those settings to fit your own risk tolerance and objectives.

Here are the backtested performance results for the IRA and Margin portfolios compared to our 60/40 benchmark.

MEASUREMENTMargin PortfolioIRA Portfolio60/40 Portfolio
CAGR+19.62%+12.94%+7.39%
Top 3 Drawdowns-23.98%, -17.60%, -14.70%-15.97%, -11.72%, -9.79%-32.57%, -22.70%, -11.89%
Sharpe1.281.280.69
MAR0.820.810.23
Trades Taken10171017N/A
Correlation0.440.44Benchmark

(see Performance Disclosures: Portfolio Statistics)

Profit across changing market environments

Merlin's real magic is in its unique ability to toggle the strategy from its aggressive growth state into a more defensive mode during unfavorable market conditions, helping you step aside and preserve capital during high volatility periods and achieve superior risk-adjusted returns.

The following table shows backtested, followed by live returns starting November 2019, for the Margin Portfolio going back over a decade. Click on any of the links in the table below to read our performance letter from that month.

 JanFebMarAprMayJunJulAugSepOctNovDecYTD
2020+4.29%-8.25%-7.38%+0.73%+0.17%+1.51%+0.92%+5.23%-1.32%-0.20%+10.75%+6.45%
20190%+0.42%-0.84%+0.77%-0.01%+2.63%+1.89%-1.57%+5.32%+1.11%+8.19%+5.42%+16.53%
2018+18.01%+0.32%-0.74%-0.75%+2.26%+0.66%+1.07%+8.22%-1.1%-7.5%0%-5.67%+14.78%
2017+7.07%+8.82%+1.09%+3.34%-4.02%+4.84%+4.28%-5.38%+4.91%-0.61%+2.10%+1.84%+28.28%
2016-6.99%-1.61%0%0%-0.10%+1.39%+5.65%+0.1%+1.88%+2.77%+9.12%+5.25%+17.45%
2015-0.38%+5.38%+0.54%-0.67%+1.42%-1.1%-2.11%-0.25%0%+2.64%-0.02%+1.13%+6.59%
2014+2.17%+5.65%+1.09%-3.83%+5.24%+8.01%+1.74%+4.49%+0.66%+1.18%+2.25%-1.52%+27.14%
2013+9.94%-0.76%+3.39%+4.77%+7.42%-1.87%+8.4%+0.56%+0.37%+5.6%+4.48%+2.95%+45.26%
2012+1.29%+1.22%+2.23%-0.49%-4.18%+4.74%+4.89%+3.4%+7.03%-1.43%-5.03%+4.96%+18.63%
2011+5.61%+4.52%-0.47%+6.88%+1.1%-7.35%-1.58%-4.63%0%+0.83%0%+0.40%+5.29%
2010+7.09%+1.31%+17.12%+10.7%-8.52%-5.35%+1.97%-0.4%+9.29%+8.28%+0.7%+2.85%+45.06%
20090%0%0%0%0%0%0%+0.37%+2.97%-2.13%+3.28%+5.06%+9.55%
2008-3.99%0%0%0%0%0%+0.75%+0.73%+1.46%0%0%0%-1.05%
2007+6.42%+1.34%+0.69%+6.72%+2.96%+3.34%-1.26%-2.35%+3.08%+2.28%+1.41%0%+24.62%
2006+0.38%-0.05%+2.57%+4.48%-4.5%-2.39%+0.79%+1.53%+1.89%+8.92%+2.54%+1.39%+17.54%

(see Performance Disclosures: Monthly Performance)

How Merlin works

Merlin is a long-only algorithm that buys retracements in momentum stocks during healthy market environments. It trades individual stocks, equity ETFs, and all signals are generated using daily closing prices.

That means no intraday screen watching is required and all orders can be placed after the market closes. 

Trade confidently with a systematic, evidence-based strategy

Merlin is based on the time-tested, academically approved factors of mean reversion, momentum, and growth, and its execution refined from over a decade of bar-by-bar price action analysis and live trading by Evan Medeiros.

The strategy has been backtested and validated across thousands of stocks and ETFs with careful considerations not to data mine or overfit.

(see Performance Disclosures: Portfolio Statistics)

Trade Statistics

Percent of trades profitable:

63.91%

Average winning trade:

+10.62%

Average win to loss ratio (R):

1.13

Average hold time:

47 days

Become a Merlin trader

When you subscribe to the Merlin membership, you'll receive daily trade reports with all of the information and signals you need to trade the strategy with ease.

You'll also unlock several member-only pages that'll help you make better and faster investing decisions:

  • Private portfolio and trade signals page
  • Private education page to learn more about the strategy
  • Private email and SMS text list for real-time trade notifications
  • TR150 access throughout your membership
  • Position size calculator specifically designed for Merlin

About Evan Medeiros

  • Founder of the Trade Risk and creator of Merlin
  • Coder for 20+ years and active trader for 10+ years
  • B.S. Computer Science, University of Massachusetts Boston
  • Frequent speaker at meetup groups and conferences, including TradersExpo, MoneyShow, Stocktoberfest, and more
  • 100,000 followers across social networks
Swing Trade Alerts Picture of Evan

Frequently Asked Questions

What is a quantitative strategy? What are the benefits?

A quantitative strategy means all of the buy and sell decisions are based strictly on mathematical computations and probabilities. There’s no gut feel or subjective analysis – the system contains all of the rules to make the best decisions possible.

There are many benefits of quantitative strategies:

  • 100% discipline, the system always executes flawlessly
  • No emotional biases
  • The strategy has been tested and verified over past market environments
  • The strategy is easily measurable and can be enhanced over time

What makes Merlin extra special is that it was built by a trader first. Evan’s market observations and live trading for over a decade are at the core of Merlin’s decision making process. That means Merlin is not just applying random and impossible to explain mathematical theory, instead, it’s a simple system based on how markets really work.

How do I interpret the performance measurements above?

We pride ourselves on transparency and we want to be sure you have all of the information possible to properly evaluate the Merlin trading system. This is why we give a detailed view of performance measurements so you can make an informed decision about the strategy. 

Some of these terms get pretty complicated with in-depth equations which is why we created a Trading System Performance Metrics glossary to share all of the details behind everything like: Sharpe Ratio, MAR, Correlations, etc. If you're confused about anything you see in the table above, or if you simply just want to learn, head on over to the glossary

How many trades can we expect a week?

Merlin has averaged about 1 to 2 trades per week over the past decade, however, the actual distribution of trades tends to be much lumpier. Instead of consistently trading every week the strategy tends to go through busy periods followed by quiet periods.

During busy periods you might get a full month of five or more new signals each week. What follows after a busy period like that is usually a month or two of quiet activity as the trades play themselves out. Of course, Merlin's activity is largely dictated by the overall market environment so the healthier things are the more likely it is that Merlin is going to be active. 

What is your refund and cancellation policy?

At times, we'll offer 14-day free trials to our trading systems so you can take them for a test drive to make sure they live up to your expectations. If you are not satisfied for any reason, cancel before the 14th day and you won't be billed a dime.

Once your trial period has ended, or if you subscribe to a membership that does not start with a free trial, all sales are final. To view our full refund and cancellation policy, click here

Experience what a professional trading strategy can do for you. Start your membership today!

Monthly Membership

$ 109 / per month
  • Member-only pages
  • Daily trade reports
  • Email & text notifications
  • TR150 watchlist
  • Position size calculator
  •  

Annual Membership

$ 1,090 / per year
  • Member-only pages
  • Daily trade reports
  • Email & text notifications
  • TR150 watchlist
  • Position size calculator
  • Save $218 dollars choosing annual

What subscribers are saying

"So far three months in, I am very satisfied with the service. I track things closely and the returns in my Trade Risk (TR) account are significantly better than when I trade on my own in other accounts.  I have been a trader for several years, but unfortunately, I never found the consistency that I needed. TR has really made me a happy trader!"

David D.

"Merlin has been on fire! Wow! Great and courteous support by Evan. Texts are timely and clear. A true bargain. Highly recommended!"

Jim B.

"Your Merlin system is amazing, simple to understand, and on a fundamental level, it completely makes sense to any seasoned trader. I have seen much success with your system and it looks like Merlin is here to stay in my playbook!"

Ricky J.

Merlin Strategy - Merlin X Lamorak

Get the power of Merlin and Lamorak with one All Access pass.

The real power of these trading systems is unleashed when they are paired together. Because Lamorak and Merlin approach the markets in completely different ways, they do a fantastic job at maximizing your return potential.

General Disclaimer: Please be advised that trade signals are provided as an educational tool for informational purposes only and do not constitute investment advice. Signals, trading tools, and all published analysis should always be used as a starting point for doing additional independent research so that you can form your own opinion regarding investments. Under no circumstances should trade alerts be treated as financial advice.