Is Algorithmic Trading possible in Indian stock market?
As People mentioned, both traderscockpit and Zerodha provides necessary infrastructure to write algorithms, back test it with historical data and run the algorithm on simulation environment and finally you can take it live. But the actual problem starts from here. If developing strategy is one half and the other half of the problem is executing the strategy, even if we take it live, there are many hurdles for retail traders to do a fully automatic trading system.
Exchanges in India have many stringent rules for retail individuals to automate strategies.
Need to be registered as an Authorized Person on the exchanges. The one time cost of registering is Rs. 3000/segment/exchange. So if someone wants to register for NSE – Equity, F&O, and Currency, that will be a one time cost of Rs 9000 ( Rs 3000 + 3000 + 3000). For MCX it will be an additional Rs 3000.
Once registered, you would need a dealer terminal from a broker to automate as it is not allowed on a retail trading terminal. A dealer terminal does exactly what a retail terminal does, but gets some admin rights which are required for automation. The monthly rental cost for a dealer terminal is Rs 250/segment/exchange, so if you want NSE – Equity, F&O, and Currency, that would mean Rs 750/month (Rs 250+250+250). For MCX it will be an additional Rs 250/month.
To get a NSE/BSE dealer terminal, the person operating the terminal needs to have cleared the NISM Series VIII Certification. There is no such requirement in case of MCX.
The above process can take anywhere between 2 to 4 months’ time.
Strategy & Front end Approval
Firstly, you will need to decide which platform you will be using to automate the strategy, an off-the-shelf product like AmiBroker.
Costs & Process
Every strategy will first need to be audited by a CA. This will cost around Rs 2500/strategy.
The strategy has to now be tested
on the exchange UAT (User Acceptance Testing) site and by participating in the mock trading sessions conducted by the exchange. There would be a rental charge of Rs 2500/month charged on a pro-rata basis for using the UAT.
The demo is now given to the exchange and once approved, you can automate the strategy. The entire process can take up to 1 month.
Cost of automation if you are using AmiBroker is Rs 6,000/month and no one time cost.
Cost of automation if you are using a custom front end is Rs 12,000/month and a one-time cost of Rs 30,000.
As you can clearly see, the costs are pretty restrictive to automate algorithmic strategies for retail individuals, and there are so many hurdles for individual traders to trade using algorithms. However, with developed nations like US, retail traders do not face much issues to proceed with Algo trading.
In order to avoid all these hurdles, we have developed a Algorithm which has been back tested and approved by NSE. Any individual, who want to trade using our algorithm can do it just a matter of seconds.
In order to solve these kind of problem, we have founded the companywww.returnwealth.com
We provide algorithms to retail traders which analyzes Indian Markets based on statistical data and make trades directly into customer's account. So its not necessary for the Customer to spend time and analyze markets, instead our algorithm will do the analysis and make wise investments for Customers.
For More details about trading system refer:-
BEST NIFTY TRADING SYSTEM | NIFTY AUTO TRADING | RETURNWEALTH | NIFTY CHARTS
With an minimum Investment of Rs. 1.5 lacs, an Investor can earn a decent returns every month.
The best part is Customers need not transfer any funds to us, or send the investment money to us. Instead they can keep the money in their own brokerage account and algorithm will automatically place trades into customers account.