What it is?
Algorithmic Trading or AlgoTrading as it is often called is trading in a index over a long
term based on
predefined, back tested set of trading strategies built on statistical, mathematical and/or
technical
analysis models which generate buy and sell recommendations and automate trade execution
through
computer coded software. These systems usually trade indices like Nifty and Bank Nifty or
most liquid
assets like USDINR and crude.
Why?
Most of you would have dribbled in stock trading one time or other during your lifetime. The
basic rules
were very clear – buy low and sell high, buy support and sell resistance, buy on crossing
resistance and
sell on breaking support, follow stop loss, trailing stop loss and so on and so forth. But
how many of us
were successful in entering at the right trade at the right time and then to exit the trade
following price
hit orders or stop orders. Our trading decisions usually are based on herd mentality and
driven by fear or
greed rather than following set of very basic rules which all traders know. Algorithmic
trading aims at
reducing such human errors in trading to make it follow set rules every single time for both
entry and
exit trades.
What about risk and return?
Let’s be clear! There is no minimum guarantee returns and returns vary from client to client
and based
on asset classes traded. Draw downs (periods of negative returns) do happen in Algo trading
also.
Usually a good Algo strategy delivers upwards of 50% returns over a defined period of time
and draw
downs are limited to 20% of your starting capital. For example, consider an Algo strategy
which trades
in derivatives in Indian markets like nifty and bank nifty based on market trends. The Algo
strategy will
be delivering returns based on buying or short selling the market in both in both bullish
and bearish
market irrespective of the direction of the market. So in a year like 2008, when the entire
market is
showing 50% decline, then algo trading strategy is able to deliver upwards of 50% returns.
Is there any lock in period?
Algo trading strategies are developed keeping in mind a period time for which it is
advisable to keep
strategy running so that it captures market trends for which it is intended to do. Most algo
strategies
available for retail participation are based on trend following systems which take time to
develop and
once in a trade should be followed until sell signals are generated. So we strongly advise
to have a lock-
in of at least 18 to 24 months before an investor takes a call to exit.
However, if need be, we can close the trades next morning and return investors money as all
the trades
are in very liquid instruments like nifty.
Which Asset Classes are currently traded?
We trade in assets which are most liquid in Indian markets which have more than 5000 crores
of daily
exchange volumes. Currently trading is done in Nifty, Bank Nifty, Currency (USDINR) and
crude oil.
How much amount should I invest?
An investment of 10-25% of your wealth portfolio to Algo trading over a long period of time,
can give
you that extra edge in wealth generation which traditional method of investments fails to
give.
How can I trust you with my investment?
We act as your technology partner. We provide the software, backend connectivity to the
exchange, the
Algo model etc. The software merely punches the order in the client ID which your broker has
set for
you – during your registration process. Hence, for all practical purpose – we act as a
technology vendor
and not a money manager – as the client runs the Algo from the brokers end based on
technology
advisory.
How Do I Get started?
Just fill the form at the Signup page with your name, email id and phone no and one of our
representative will get in touch with you. Or just drop us an email at:
[email protected]. You
need to open a separate trading account with our broker channel partner. Once the account is
opened
you just need to transfer the money to the broker account, we will handle the rest and get
you started
on the account.
Benefits
100% systematic and automated – No more getting trades wrong due to fear and greed, stock
tips and
guaranteed returns
No Credit Risk - trades are done in clients own account
100% liquidity - Though not advised, clients can exit at short notice in case of emergency
funds
requirement
Steps Involved:
Step 1: Customer should open a trading account with rkglobal.net, our broker partner. All
trades will be
executed directly in client account using our proprietary technology Replicator. That means
each
customer can keep their funds in their own name and decide for themselves exactly when they
would
like to invest in. So it means that you never give the money to us. It is yours always and
we are just
trading using a POA.
Step 2: Customer registers with Nivesh Partners
Step 3: Customer's trading account will be mapped to algorithm
Step 4: All trades triggered by our algorithm will be automatically mapped to customer's
account and
the same trades will be replicated in Customer's trading account.
Step 5: The minimum capital required will be product specific. Contact Us for more
details.
Step 6: Product success will be reviewed bi-annually for each individual client and profits
will be shared
on a pre-determined terms and conditions.
