This is a concise article explaining the resources and tools required for you to start auto-trading in Indian Stocks. It happens that many traders want to start auto-trading but having no idea on How or Where to get started.
The below steps will brief you on the commonly used method in India and the tools required to do Auto Trading In Indian Stocks.
Ingredients Required for Auto-Trading in India.
1 x Amibroker Technical Analysis Software. ( You can use The Free Version which is limited to 5 stocks or if you are rich, use the Paid Standard Edition which cost about 20k INR )
1 x Data-feed for Amibroker. ( Cheap data-feed for Amibroker, Costs about 500 INR per Month )
1 x Help from an Amibroker AFL Developer to code your Strategy for Amibroker Software. ( Auto-Trading AFL coding service costs 7.5K Upwards)
1 x Auto Trader Software from Stock Developers Team. ( Monthly subscription cost about 1000 INR per Month )
1 x Zerodha Trading Account. ( Pay the Regular Brokerage charges on the orders executed )
Installation Procedure and Setup to Start Auto Trading in India.
- Install the Amibroker Technical Analysis Software to your PC from https://www.amibroker.com
- Search on google for an Amibroker Data-Feed Service Provider. After you purchase the data-feed, they normally help you connect the data-feed to your Amibroker through Team viewer.
- Now, Find a Amibroker Trading System developer like http://www.tradingcodes.in/ to code your Trading Strategy into Amibroker Formula Language.
- Download, Install and Configure the Auto Trading Software from http://stocksdeveloper.com/autotrader/. AutoTrader Setup Video Tutorial here.
- Log into you Kite Trading Account on Google Chrome.
How does Auto-Trading Work in the above setup?
The amibroker Platform performs the Live Scanning for your Trading Strategy during Market hours. When the Strategy Conditions are met, Amibroker passes the BUY / SELL order instructions to the Auto Trader Software.
The Auto-Trader Software acts as bridge / link and executes the orders to the exchange through your Kite Trading Account.
Watch this video to see how Auto-Trading Setup works in Live Market.
Now the Final Question, Is Auto-Trading Suitable for you or is it a waste of money?
1) Unless you have a profitable strategy of your own, it is a waste of time and money jumping into Auto-Trading just because everyone seems to be talking about it. Please dont expect to copy some strategy seen on youtube and make money on it, it will not work. If you are already loosing money trading the markets, auto trading is not going to make any difference. From a retail traders point of view, Auto trading is ideally suited for existing profitable traders who have a disciplined strategy of their own and wants to now automate it for saving time.
2) As you might have noticed there are too many applications interlinking the currently available auto-trading process, which needs constant supervision and maintenance. So even though the process is called Auto-Trading, you need to be in front of the computer all the time, to manually authenticate the orders or to make sure everything is working fine.
3) The deal breaker is this, due to the longer latency, bids and asks with small quantity generated by HFT algos and the smaller number of realtime ticks made available to retail traders by the exchanges, profitable backtested strategies on shorter intraday timeframes does not always yeild the same results when deployed on live market. This is the reason why many readymade robo traders advertising profitable backtested strategies fail to deliver the same results when deployed in live markets.