Knowledge Centre

  • Knowledge is power
  • Information is liberating
  • Education is the premise of progress, in every society
Algo Trading | June 07, 2021

Algo Trading India | Algorithmic Trading Strategies

Algo trading is on the rise across the global trading markets. Most noticeable is the India Share Market which covers about 50% of overall NSE values.

There are many significant benefits to algorithmic trading (Algo trading) that should be considered by every trader looking for new ways to build their portfolio.

Read the guide below to get an overview of why you should consider Algo trading in India.

What is Algo Trading?

Algo Trading is a computer program algorithm that automatically submits trades to an exchange based on specific parameters such as volatility levels and price movements.

This process uses computer codes and chart analysis to enter and exit trades without any human intervention.

Brief History of Algo Trading India

In 2008, the Securities and Exchange Board of India (SEBI) introduced Algorithm trading allowing brokers to provide their infrastructure with clients; this brought down costs and lessened time spent on routing orders.

It soon became clear to the Indian exchanges that Algorithm trading was welcomed and gaining in popularity.

Today there are many trading platforms and tools available for Algo trading. A trader starting out would need to fully understand the benefits of Algorithm trading before making an informed decision.

Benefits of Algorithm Trading

  1. Emotion-free Trading
  2. Since Algo trading is based on computer-generated algorithms, there is no chance of human error or emotional trading decisions. Many traders have based their trades on intuition or gut feelings, this is not possible with Algo trading.

  3. Automated Checks
  4. If you are out of the office or traveling, you can set up your algorithm to perform automated checks and follow your position in the market. Finely tune your algorithmic trading strategies to work on your behalf by implementing stops and limits.

  5. Low-Maintenance
  6. You don't have to work too hard when your Algorithm is working for you. You can sleep well knowing your customized algorithm is on the job 24/7 and will take care of trading for you.

  7. Backtesting
  8. With Algo trading software you can backtest and refine your algorithms against historical data. This will allow you to find the best combinations of parameters to trade.

  9. More Opportunities
  10. You can choose or create algorithm trading strategies to optimize your exposure to new opportunities in the market. Algorithms are able to take in more data than a human so you can customize based on real-time data.

  11. Speed and Accuracy
  12. Using Algo trading strategies can help you save time. You don't have to spend time on your brokerage account. The algorithm follows your plan and places the order as soon as the signal is given.

  13. Transaction Costs
  14. With automated trading, there is no need for human traders to spend a lot of time monitoring markets since the algorithm automatically enters and exits trades. This will help reduce the transaction cost.

Key Strategies for the Algo Trader

When choosing the best algorithm trading strategies, you will need to fully understand the options available. Let's take a look.

Price Action Strategy

This strategy allows a reader to read the market and make subjective trading decisions based on recent and actual price movements instead of relying solely on technical indicators.

Price Action strategy is dependent on technical analysis tools such as charts, price bands, trend lines, and candlesticks.

Technical Analysis Strategy

Traders who use this strategy seek to predict price movements by examining historical data, typically price and volume. Orders are released based on existing indicators or your own created indicators.

Combination Strategy

This strategy combines aspects of the price action strategy and the technical analysis strategy. Speak to your broker for guidance on Algorithmic trading strategies.

How Algorithm Trading Works

Algo trading can be a complex business. For some traders and investors, it can be intimidating but here are the basics of how Algo trading works.

  1. Come up with a trading idea
  2. Make your trading idea into a trading strategy
  3. Convert your trading strategy via an algorithm
  4. Backtest using historical data to check the viability

Who Can Do Algorithmic Trading?

Algo Trading can be done by anyone who has the skillset and knowledge needed for this complex trading. You will need to have familiarity with code languages so you can perform the required trade strategy.

You must have access to market data feeds that will be monitored by the algorithm, and you must know how to Backtest.

For those who do not have the technical know-how for Algo trading, find a broker that will help you execute your plan affordably and can provide the best platform with all the latest tools you will need.

Choosing the Best Brokerage

Algo trading can be quite profitable with the correct backtesting measures in place, validation, and risk management techniques. It is very important to have an algorithm trading brokerage that can guide you through the process.

Questions to Ask

Make sure you ask the right questions before choosing your Algo trading brokerage. Here are a few key questions to ask:

1. Does the trading platform allow you to diversify your trades?

2. Is the Algo trading software fast and reliable?

3. Are there any commissions or costs?

4. Do they have a dedicated support desk?

5. What type of programming languages are there?

6. Do they have an in-house development team?

7. Do they offer a customized order management system?

8. What about the latency of the trading platform?

Future of Algo Trading

The global Algorithmic market is expected to grow significantly between 2020-2027. As more companies recognize the advantages of Algo trading, there will be more services and brokerages needed to support the growth in India and other parts of the world.

Start Algo Trading Today

There are many brokerages offering Algo trading in India. Work with a brokerage that treats the customer as their top priority and has the experience you need to make the most of your investment.

One of India's leading financial service providers is the Findoc Group. They offer superior Algo trading services and great customer support.

Get Started with Algo Trading

Related Blogs

Frequently Asked Questions


Important Message The information contained in this file is provided for informational purposes only, and should not be construed as legal advice on any matter. The content and interpretation of the law addressed herein is subject to revision. We disclaim all liability in respect to actions taken or not taken based on any or all the contents of this file to the fullest extent permitted by law. Every effort is made to avoid errors. In spite of that, errors and discrepancies may creep in. It is expressly stated that neither Findoc Investmart Private Limited nor any of the contributors of updates will be responsible for any damage to anybody on the basis of this document. Readers are, therefore, requested to cross check with the original sources e.g. Government publications, Orders, Judgments etc., before taking any action or making any decision. These services are being provided through our group companies Findoc Capital Mart Pvt Ltd and Findoc Finvest Private Limited

Attention Investors
  • 1. Stock Brokers can accept securities as margin from clients only by way of pledge in the depository system w.e.f. September 1, 2020.
  • 2. Update your mobile number & email Id with your stock broker/depository participant and receive OTP directly from depository on your email id and/or mobile number to create pledge.
  • 3. Pay 20% upfront margin of the transaction value to trade in cash market segment.
  • 4. Check your securities / MF / bonds in the consolidated account statement issued by NSDL/CDSL every month.
  • 5.Investments in securities market are subject to market risks, read all the related documents carefully before investing.
  • 6.The securities are quoted as an example and not as a recommendation.
No need to issue cheques by investors while subscribing to IPO. Just write the bank account number and sign in the application form to authorise your bank to make payment in case of allotment. No worries forrefund as the money remains in investors account.
Prevent Unauthorized Transactions in your demat account --> Update your Mobile Number with your Depository Participant. Receive alerts on your Registered Mobile for all debit and other important transactions in your demat account directly from NSDLon thesame day.....issued in the interest of investors.
KYC is a one-time exercise while dealing in securities markets-once KYC is done through a SEBI registered intermediary (broker, DP, Mutual Fund etc.), you need not undergo the same process again when you approach another intermediary. | (As instructed by SEBI, We hereby declare that we do engage in proprietary trading in all segment across the exchange.)
Effective communication & Speedy redressal of the grievances a. Register on SCORES portal b. Mandatory details for filing complaints on SCORES: i. Name, PAN, Address, Mobile Number, Email ID c. Benefits: i. Effective communication ii. Speedy redressal of the grievances link:
In case of grievances for any of the services rendered by Findoc Investmart Pvt Ltd write an email to
Mandatory updation of certain attributes of KYC of clients - The advisory is also displayed on the Depository website at following link:
1. NSDL:IN-DP-469-2020 2. Findoc Finvest Pvt. LTD. CIN no:U65910CH1995PTC016409 RBI REGISTRATION NO. B-06.00267 3. Findoc Investmart Private Limited CIN no:U74992CH2010PTC035180 SEBI REGISTRATION NO. INZ000164436 4. Findoc Investmart IFSC PVT. LTD CIN no: U65999GJ2017PTC095984 SEBI REGISTRATION NO. INZ000200735 5. INVESTMENT ADVISOR SEBI Registration no. INA100012297

Member I'd | Nse- 14697 | BSE- 6529 | MCX- 55205 | NCDEX- 01152


Registered Office :

1210/1211/1212/1213,1213A, Exchange Plaza, Near Mercury Hotel, Opp. WTC Tower, Gift City, Gandhi Nagar- 382355, Gujarat, India

Corporate Office :

4th Floor, Kartar Bhawan, Near PAU Gate No.1, Ferozepur Road Ludhiana -141001.

Copyright © 2024 FINDOC INVESTMART PVT. LTD. All Rights Reserved.

Developed & Content Powered by Accord Fintech Pvt. Ltd.

Open a Demat Account