Zebu blog

Tag: Financial Technology

  • How To Get Started With Algo Trading

    As a regular investor, here’s how you can start Algo trading.

    As top brokers in share market , Zebu, allows you to use algo trading for free, along with offering the lowest brokerage for intraday trading options and proving users with the best trading accounts

    1. Learn about the market

    Before you do any kind of trading, you need to learn about the market. Before you start Algo trading, you should learn as much as you can about the instrument or market you can trade in. This will help you come up with a hypothesis that you can use to guide your trades.

    2. Know how to code

    If you don’t know how to code, you can learn a language like Python and make an algorithm that works for you, or you can pay a professional to do it for you.

    3. Backtesting

    You must test your algorithm before putting it into use. Back-testing is a way to make sure that your strategy will work in the future. You can also use software from a third party to check if your algorithms work. You can change your code based on whether or not they work.

    4. Decide on the Best Platform

    As crucial as your coding is, you must also choose the correct broker and platform. Choose a broker that supports your algorithm and gives you a variety of tools to help you improve your trading strategy. For example, at Zebu we offer a free algo-trading provision that traders can use to execute their trades. If you would like to know more, please get in touch with us.

    5. Go Live

    When you’re happy with your algorithm, take it live. Monitor its market and real-world performance. Your algorithm might not always work. You might then have to start over or make changes to fit your needs.

    6. Keep Evolving

    Even if your first strategy doesn’t work, you don’t have to give up on algorithmic trading. Keep trying out different codes to see what works best.

    If you don’t have the time or skills to make your own algorithm, you can buy Algo software that will do the job for you. Do your research, try out the strategies with past data, and choose the one that works best for you.


    Conclusion

    Traditional investors can boost their trading approach by trying Algo trading. You can take advantage of short-lived trading chances that you would have missed otherwise. Algo trading can help you become a good trader who is quick, efficient, and successful.

    Is algo trading costing you a bomb? Zebu, As top brokers in share market allows you to use algo trading for free, along with offering the lowest brokerage for intraday trading options and proving users with the best trading accounts.

  • The Future Of Algo Trading In India

    There are many opportunities on the stock market. Yes, there is nothing better than believing in a stock and seeing it go up in value by a lot. But since the stock market has grown into a big, complicated beast, there are other ways to make money consistently, like catching a short-term trend or reversal pattern or using options structures to profit from short-term moves.

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    If you tried to use these strategies manually in a market that keeps getting bigger and bigger, you probably gave up because it was too hard. But if you use technology and automation to help you trade, you’ll see that you can make trading less stressful and easy. In a nutshell, that’s what Algorithmic Trading has to offer. As Indian markets become more developed, it will change the stock market in a big way.

    Even though Algorithmic Trading has been around for a while in India, it is still in its early stages. Algos make up 70–80% of the global market volume and have many different structures, rules, and participants. In India, however, algos only make up 50–60% of the market volume and are simpler and less understood.

    Around 2010, algorithmic trading began in India, but at first, only Institutions and brokers used it. But now, thanks to the growth of digital discount brokers and API solutions, anyone in the retail market can make algorithms, and the possibilities are endless!

    Algorithmic trading is becoming more popular, and people are learning more about it and getting better at it. But even so, there is a lot of room for growth for Algos in India if you look at how they are used in other markets. Algorithmic trading is different in many ways. Not only does it give the trader the chance to make money, but it also makes trading more systematic by removing the effects of human emotions and mistakes. It also makes the market run better and have more money in it.

    The main reasons why algorithmic trading is better than manual trading are that it is faster, more accurate, and saves money. Algorithms can find patterns and trades in a fraction of a second, which is faster than humans can see. When a machine follows instructions that have already been set, accuracy and precision are good. Also, the algo keeps an eye on your orders all the time without you having to do anything, which cuts down on trading time and costs and saves you a lot of time.

    Most people are interested in algorithms that are used for systematic trading. Trend watchers, hedge funds, and pair traders find that it is much more efficient to programme their trading rules into software and then let the software trade on its own.

    But apart from that, Execution and Arbitrage are two large areas of trading where algorithms are used. Mutual funds, pension funds, and insurance companies use algorithms to split up their orders when they don’t want their single, large-volume trades to affect stock prices.

    And there is arbitrage, which is buying and selling instruments that are highly related to each other to make consistent small profits from the spread and make the market work better.

    Then comes high-frequency trading, which means they trade every millisecond, or medium frequency, which means they trade every few minutes or even days.

    Trend following, also called momentum trading, and mean reversion, also called range-bound trading, are two other important types of algos.

    Smart Beta is a way to invest in market inefficiencies based on rules. It is becoming more popular in India. High-frequency traders use arbitrage and market-making, which is a way to trade on both sides of the range.

    Rules and the Way Forward:
    Along with the growth of markets, India is also changing its rules for Algorithmic Trading. SEBI has recently put out a consultation paper to make automated trading rules stronger and better for the end customer.

    Algos have had their fair share of problems, like the Colocation scam or the way some algo traders take advantage of people.

    But as the industry becomes more well-known, the inefficiencies would be fixed, and algorithms would change the markets by making them more efficient, fair, and data-driven.


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