Case Study: How to Significantly Cut Drawdowns Using Market Internals

In 2014, I spent about 6 months in a row with this unique traders tool called Market Internals, exploring its possibilities every single day, searching for new and creative implementation ideas for my own automated trading systems (ATSs). With a real obsession with this concept, I finally found almost 40 new ideas (mostly my own proprietary ideas) on how to squeeze the most out of this great tool, and slowly started implementing many of them into my own trading – with great success.I truly believe that Market Internals can give a trader a small, unfair advantage – if thoroughly thought out and implemented well, especially in new, creative ways. Therefore, in this article, I would like to give you a very brief introduction into the Market Internals world, together with an example of one of my private Market Internals filters – to show you, how dramatic the impact of Market Internals deployment can be – in a favorable way.Introduction: What are Market Internals (MI)We all know how hard it is to find a new, viable trading edge. We are also aware that the scope of our possibilities is quite narrow: It doesn’t really matter what trading indicators or other tools of technical analysis we use – most of the time they all use the same source of data anyway. This data consists of Open, High, Low and Close values of the bars in our trading chart, and whatever trading indicator we use, we basically use only a slightly different interpretation of the same O-H-L-C values.So, if we really want to go a step further and implement a broader view for our trading decisions (trading entry/exit conditions), we have to start investigating outside of the O-H-L-C values. We can, for example, implement information like Volume or Open Interest to our trading entry/exit conditions, which is not a bad idea at all, and many of my ATSs use O-H-L-C values together with Volume effectively.However, we can still go a step further.We can do something that many traders have no idea they can even do: We can start making our trading (entry/exit) decisions based not only on the data coming from the underlying market but also on taking into consideration the market (its overall direction, quality, strength and overall “mood”) as a whole!Just imagine:Wouldn’t it be fantastic to know where the stock market as a whole is heading, before we enter a position in our emini S&P strategy?And that is exactly what Market Internals are about: The ability to read the market as a whole and effectively incorporate this much broader view into our trading decisions.Market Internals: A quick introductionSo what exactly are Market Internals? Where do they come from?It’s very simple: Market Internals are information about the overall stock market, provided by the stock exchanges (NYSE, AMEX), usually in the form of a standalone data feed.And this data feed instantly provides us with real-time information about the overall stock market situation.Using Market Internals we can immediately, in real-time, start receiving information like, for example:

How many stocks from the Dow Jones Index have just moved up and how many down?

Is the volume of all rising stocks from the Dow Jones index higher or lower than the volume of all falling ones?
Or even:

How do ALL stocks move in the entire NYSE? Are most of them rising or falling?

How many stocks have a price that hasn’t changed?

What is the direction of the majority of the volume? Up or down?

Do the 30 stocks in the Dow Jones index correspond with the rest of the market, or does the Dow Jones index now live its own life?
As you can see, there is plenty of information that can be obtained through this standalone data feed about the stock market as a whole (and later on, to be used in our strategies).All this information can be split into several different categories, and every category has its own meaning and preferred method of implementation. However, because the space for this article is very limited, and the subject of Market Internals could give more than a dozen articles like this, I am going to focus only on one Market Internals category, one of my most favorite, the MI pair UVOL-DVOL.Market Internals: UVOL-DVOLThis category of MI simply consists of two separate data feeds provided from the exchange:$UVOL monitors the total volume of all rising stocks on the exchange.$DVOL monitors the total volume of all falling stocks on the exchange.By using these data feeds (often called MI indicators), we can monitor the volume on one side or the other, so we can get a better idea where the volume is moving to, i.e. which side is stronger. This is, of course, a very powerful view on the market that can provide us lots of important information (if we know how to use it).From a practical means, we usually add two different data symbols into our chart (data2 and data3) to start using UVOL-DVOL pair for our trading.Then we can start using these MI indicators as additional, or even leading filters (or as I usually call them – “Super Filters”) for our existing systems – with the goal to improve them significantly.Let’s have a look at such a condition in practice. I am going to reveal one of my proprietary UVOL-DVOL MI conditions, which I use as a filter for many of my breakout index or stock strategies (MI can only be implemented on indexes or stocks of futures indexes).UVOL-DVOL as a filter for significant improvementTo demonstrate the effect that Market Internals can have, I have decided to use the most simple condition that I could think of – a primitive breakout condition high=highest(h,N1). I haven’t done any optimization of the N1 parameter, nor have slippage and commission been included in the results shown below – the purpose of this article is not to present a functional breakout trading system but to demonstrate that Market Internals can be applied to even the most basic systems and get immediate, and very often dramatic, improvements. For the N1 parameter, I have used the first number that came to my mind, number 20.Here is the basic code that I will use to demonstrate the impact of the Market Internals “Super Filter”. The test will be completed on the EMD.D market, 15 minute timeframe, from 3/22/2006 – 3/21/2016:If high = highest(h,20) then buy this bar at close;setstoploss(600);setexitonclose;Here are the results:Net Profit: $79,440Profit factor: 1.17Avg. Trade: $36.52Max Drawdown (close to close): $12,650Net Profit / Max DD: 6.28Number of trades: 2175Now let’s move to the implementation of a very simple Market Internals condition that is based on the following rules:

Calculate the difference between UVOL and DVOL,

Calculate a 30 bar simple moving average of this difference,

If the UVOL-DVOL difference is above the moving average of the UVOL-DVOL difference AND high = highest(h,20), a Long position is opened,

The position is closed by the end of the day or when the 600 USD stop-loss is hit.
In a moment, I will show you the outcome of the application of this code to the original system. But first, I need to mention that I have used several small add-ons, like for example, taking into consideration the zero line of the UVOL-DVOL difference to cancel the “Super Filter” in certain situations – all of this is included in the code and the workspace that you can download at the end of this article. Yet the basic idea is exactly as I have described it – to work with the UVOL-DVOL difference and with the moving average of this difference.Let’s take a look at the results after application of the Market Internals “Super filter”. First, the performance report:Net Profit: $76,000Profit factor: 1.38Avg. Trade: $63.81Max Drawdown (close to close): $7,790Net Profit / Max DD: 9.76Number of trades: 1191And finally, the comparison table showing the results before and after the application of the Market Internals based “Super Filter”.Metric / Before MI / After MI / ImprovementNet Profit / 79,440 / 76,000 / -4.3%Profit Factor / 1.17 / 1.38 / +17.9%Avg. Trade / 36.52 / 63.81 / +74.7%Max DD (C-to-C) / 12,650 / 7,790 / -36.8%Net Profit Max DD / 6.28 / 9.76 / +55.4%Trades / 2175 / 1191 / -45.2%I believe that the numbers speak for themselves – maximum drawdown has improved by almost 40% (36.8%), Average trade by +74.8%, and the Net Profit to Maximum DD ratio by +55.4%. All really great improvements, and I see similar improvements of Market Internals very often.ConclusionI have been using Market Internals for my own trading since 2014.Here is what I have generally achieved by implementing them into my own trading strategies:

Reduce max. Drawdown

Improve Avg. Trade

Improve Net Profit / Max DD ratio

Smoother equity curve

Overall improvement of portfolio performance

Getting additional psychological confidence by knowing that I only trade in highly favorable market conditions.
I was really surprised that Market Internals are used by so few traders, yet, when I present them the Market Internals possibilities, they usually get quite excited and implement it to their own trading systems with instant positive impact.This is exactly the reason why I like them and encourage all traders to investigate them further.

Posted in Uncategorized | Comments Off

The 10 Traits of a Successful Home Based Business Owner That You Don’t Have

Thousands of people start a new home based business every year. Some prosper into massive fortunes, while others just wither away. Some people always seem to have success with their home based business ventures, while others never seem to get their home based businesses off the ground.After some investigating, I found that the successful home based business owners all seem to have some of the same traits. I want to share that with you today. Hopefully, you will apply these practices to your home based business, and in turn achieve the success you desire.Here are the 10 things I have come up with during my investigation. Pay close attention here. You may even want to take notes or print this off for future reference.
Be A List Maker. I like to do this the night before so I am ready to go the next morning with everything I need to get done. This starts my day off organized and primed for results. As you finish each task, cross it off your list. It is amazing how much you will get done when you can focus on what you need to do, and not hem-hawing about what needs to be done. Having the items crossed off your list will also give you a sense of accomplishment, making you feel better about what you are accomplishing in your home based business.
Be Enthusiastic. Enthusiasm is the fuel you need to accomplish your tasks. Enthusiasm will keep your energy level high. People who are busy, happy, and enthusiastic are always achieving success with home based business. And if that wasn’t enough, enthusiasm is contagious. If your enthusiasm level is high, your prospects will see their enthusiasm increase as well.
Set Your Goals. What are you doing? What do you want to accomplish? Pay off your debt? Buy a house? Fire your boss? It doesn’t matter what your goals are, you just need to know what they are. Write them down, and be specific. Include exactly what your goals are and when you are going to achieve them. If the goal is large, break it down into smaller goals that combine into your bigger goal. This will keep you focused and keep you from getting discouraged. And make sure you have your goals where you can see them. You want to look at them several times a day. When you wake up in the morning. Before you go to bed at night. Another four to six times throughout the day. This will keep your goals fresh in your mind and keep you focused on achieving them.

Schedule Your Time Wisely. Your schedule is the roadmap by which your home based business travels. It ensures that you are doing your income producing activities first, and your less important items last. Plan your work, and then work your plan. Most people spend too much time in their email inboxes everyday. The most successful home based business owners spend less than one half hour with their emails a day. Also, I know you love your family, but work time is work time. Your family needs to respect your business and know that you need to have uninterrupted work time. You need to treat this time just as if you were in a place of employment.
The Magic Word Is “Ask” The most successful home based business owners don’t wait for business to come to them. They create their own sales by asking for it. They ask for appointments, and then they do business. They ask for business, and then they close sales. They ask for referrals, and then they have full list of potential prospects. You want to be polite, but firm, when you are asking.

Expect No’s. You are going to get no’s when running any home based business. Remember that these are not personal. In home based business sales, the law of averages is always at work. Every no you receive will get you closer to a yes. Be sure to keep track of your ratio. It will help you to improve your techniques. You can also use your ratio as a goal. Remember setting our goals? Are you getting eleven no’s for every yes? Is your ratio running six no’s to a yes? Always remember that your income is dependent on the yes. Also remember that a no is not always the end. Quite often a no is simply a way of saying “I need more time to think.” It may simply be a request for more information about your product or service. What your prospect is actually buying is assurance. You need to assure them here with your helpful attitude and complete honesty. They need to know that you want what is best for them. In most instances, they will respect you and do business with you.
Maintain A Positive Attitude. Success with your home based business is ninety percent attitude and ten percent aptitude. Every one of us must develop habits of constructive thinking. All of us. I am proud to be a home based business owner. I am proud to be in sales. Sales is what makes the wheels of our economy turn. Advisor to several presidents Bernard Baruch was once quoted as saying, “If every salesperson sat down and took no orders for twenty-four hours, it would bankrupt the country.” Every company that has any kind of product or service is dependent upon sales to move those products and services. Remember, if you become good at sales, you will enjoy and income far above the average.

Have An Office Area. For success with your home based business, it is essential that you have a place where you can work in an organized and efficient manner. An office plus a strict working schedule equals dignity. Both are absolutely essential for efficient operation and accurate record keeping, which are very important to the success of your business.
Be Involved. Most home based business opportunities offer contests to stimulate production. Include those contests and what your results will be as part of your home based business goals. Not only do contests add a considerate amount of income to your business, they are just plain fun to participate in.
Handle Money Intelligently. A regular nine-to-five job in Corporate America usually means a paycheck at the end of two weeks. As a home based business owner, you will be handling money constantly. Making sales with your business means instant income and constant income. It is absolutely mandatory that you become an efficient money manager. Have a separate checking account setup specifically for your business. You will want to deposit every penny from every customer into this account. Since bank statements show an exact record of every penny collected, and business expenses can be verified by your cancelled checks, your record keeping will become more simple and very accurate.So are you ready to be a home based business professional? Does financial security mean a lot to you? At this point, you need to ask yourself a few questions including:
Am I honest?
Am I willing to learn?
Am I willing to work?
Do I really like people?
Am I actually capable of being my own boss?If you answered yes to all of these questions, then it is time to find yourself a good home based business opportunity. You will need to find one that you like, one that fills a need or offers a solution to many people, and start working for yourself! If you can take your future into your own hands, then you can make your dreams a reality.

Posted in Uncategorized | Comments Off

Here’s Why You Need to Charge Your Electric Vehicle At Home

It is no wonder BMW is at the forefront in making both stylish and functional vehicles that never compromise safety. Charging your electric vehicle with a home charging station has more benefits compared to public charging stations. With BMW’s electric model ranges, you will experience an entirely new driving experience. No feeling is better than gliding silently through urban and rural traffics. All of this is free of fumes and harmful emissions that impact the planet. Going electric with BMW is one of the best things you can do for you.

While BMW iX3 Charging Station is available in many places and shopping malls in Australia, it is a good idea to invest in home BMW charger as it offers a plethora of benefits. In fact, charging your electric car with a home charging station has benefits compared with public charging stations.

Here’s why you need to install BMW home charging station:-

Save money

Instead of buying battery power from a third-party source every time you need to charge your BMW, it is a good idea to pay a flat fee for a residential BMW charging station and have unlimited energy from the same source that keeps your house warm and other electric appliances running. Of course, you would see a spike in electricity bill. But, you’ll save money by saving yourself from frequent trips to the public station and paying for recharging your car. Home charging stations pay for themselves in the long run.

Finding your home charger is affordable too. There are many electric vehicles charging station providers in Australia from whom you can buy and rely on them for support. There are three different types of home chargers, including level 1, level 2, and level 3. Based on the type of charger you buy, the cost will be anywhere between $300 and $2000.


On average, it takes anywhere from four to six hours to fully charge your BMW with a level 2 charger. Let’s imagine that you need to drive 50miles to attend a meeting and your EV is running low on battery. If you have to wait the whole night, take your vehicle to the nearby charging station, recharge, and then drive. Wouldn’t that consume your productive hours? The same scenario is much more manageable if you have the home charger installed. All you need to do is, plug the car in and go to sleep. By the time you wake up, you’ll have a fully charged BMW ready for the drive.


Charging at home is much safer than public charging stations for a range of reasons, including the safety of you and your vehicle. You’ll have to wait for a long time in the public charging stations to charge your EV, and there’s no safety, especially if you are in the middle of high way.

As you see, they’re less expensive, more convenient and completely safe as long as it is installed properly.

Posted in Uncategorized | Tagged , , , | Comments Off