Algo Trading Strategies

  If you have had the pleasure of visiting the NSE website and going to the Nifty screen, you must have seen a link that suggested something like “option chain” at the top. Now you must know that you can also access the option chain on your own terminal, but the one that is available on Nifty website is made available for everyone in real time. Now to address the elephant in the room: What does Option Chain mean? The meaning of option chain An option chain is the representation of all the option strikes of the Nifty in one frame. Keep in mind that just like you have an option chain for Nifty, you also have different option chains for all the different key indices traded in F&O. Also, for the stocks where option trading is permitted, you’ll find the option chains for them as well. But in order for the option chain to be relevant the stock has to be relatively liquid. How do the traders perform the option chain analysis? The Option chain data that is made available on th...

 If you are into investing and stock market, you must have came across the term algo trading strategies or intraday trading strategies. Let us try to understand what these terms precisely means What does algo trading mean? Trading on the stock market isn’t a hit and trial process. It is something that can be programmed for – something that can be mechanized. When it comes to algo trading India is still a new country for it. It was introduced here just a decade ago in 2009, but it has seen quick adoption on the stock market and more and more people, especially those who are just entering the trade market, are getting into algo trading. With the help of pre-written, back-tested algorithms that are run with the help of computers, you can generate profits that are otherwise unable to be generated manually. Free from emotional biases and logical flaws like humans, algo trading or automated trading is the future of intraday trading . Advantages 1)      Since ...

 The biggest difference between investing in stocks and trading stocks is that while investing is a long term process where you buy the shares of the company and wait for that company to grow, in intraday trading, you buy and sell stocks within the same day to generate profits. Compared to mutual funds, trading with the help of intraday trading strategies is much less risky, which is the reason why it has been gaining such momentum in the past few years. According to statistics, nearly 40% of all trades that happen on the National Stock Exchange (NSE) are a result of automated trading . The reason why this phenomenon has grown so quickly within such a short span of time is that automated trading removes human error and bias from the picture – which are two of the biggest factors responsible for the losses incurred in the trading market. Unlike humans, computers do not get tired, do not miss even the minutest of details and do not succumb to emotional impulses like fear and gre...

 Intraday trading is all about buying stocks and selling them on the same day, and if you want to book profits, you need to make sure that you have good intraday trading strategies. It doesn’t matter whether you’re doing manual trading or automated trading; having good intraday trading strategies is a must. Let’s take a look at some of the best strategies that have proven themselves time and again. Opening Range Breakout (ORB) This is a strategy that is utilized by both amateurs and professional, experienced traders. If you combine this strategy with the proper use of market indicators, accurate assessment of market sentiment and unyielding rules, you’ll be able to gain maximum profit out of this strategy. Opening Range Breakout (ORB) has numerous variations and it depends upon the traders, how they want to utilize their strategy. Mapping Resistance and Support Opening range refers to the fluctuation of the stock price that happens for every stock for the starting 30 minute...

  While in the western markets, automated trading has captured more than 80% of the stock market, it is slowly growing in India as well. Ever since algo trading strategies were legalized in India by SEBI in 2008, automated trading has started making its mark. Today, it accounts for nearly 40% of all trades that occur on the National Stock Exchange (NSE). While the retail investors can now indulge in automated trading, they have to go through a rigorous process in order to get their intraday trading strategies automated as the as exchanges in India do not allow retail individuals to automate strategies. Following are the steps one must take in order to use algo trading strategies as a retail investor. ·         You are required to register as an Authorized Person on the exchanges. To fulfill the process, you are required to pay a one-time fee of Rs 3000 per segment per exchange. ·         Once you have b...