Zerodha, a leading discount stockbroker in India, has invested has a sum of 2.25 Crore in an algo-trading based Fintech company, Streak. This investment is done through Rainmatter, the investment incubator from the discount broker.
“Around 40% of the Equity trades in the stock market are getting placed by the usage of algo-trading. That is huge!”
Now, we know that Zerodha is one of those stockbrokers in India that keeps an exhaustive focus on technology and it can be seen through some of its high-performance trading platforms including Zerodha Pi, Zerodha Kite and so on. At the same time, it keeps on collaborating with small start-ups that work on specific Fintech products including Zerodha Smallcase and now Streak. However, to use this, you will need to open Demat account with Zeordha.
In this review, we will walk through the basic review of Zerodha Streak and how you can actually use it in your trades.
Zerodha Streak is a cloud-based semi-automated algo-trading platform integrated with the major trading platforms of the discount broker. This is a web-based application, thus implying, you do not need to download or install any software to use Zerodha streak. You can access it through any browser such as Mozilla, Chrome, Safari or internet explorer. Furthermore, this platform allows you to trade on stocks listed on the National Stock Exchange only (NSE).
For easier understanding, let’s take an example. Let’s say Vijay is an intra-day trader and has recently started trading in the stock market. In order to make consistent profits, he has to stay glued to the terminal screens for the most part of the trading sessions.
Now, this used to be fun at the start, but now with time, it takes quite a bit of toll and gets exhausting, thereby affecting Vijay’s hit rate in his trades. Furthermore, there are instances where his emotional biases come into play and he plays subjective rather than staying objective in this trading decisions.
One way out is, that he learns to code and also gets access to super-cool algorithms that can assist him to quicken up his trading decisions while keeping them completely objective. Now, this can be termed as close to impractical for most of the traders including Vijay.
This is where tools such as Zerodha Streak come into the picture that does not require you to perform any coding or have knowledge of any trading algorithms on your own. With Zerodha Streak, you just need to input your strategy in terms of few input values based on your preference. The usage of this tools basically requires you to follow 3 steps, including:
In other words, Vijay or any trader basically need to input specific values about the trade, validate the results of the algorithm based on historical performance & market data and then deploy the trade, if it seems profitable.
Zerodha Streak – How it works?
As mentioned above, you need to follow three simple steps. Now, within these 3 steps, there are some specifications you need to take care of.
To start with, you need to create an algorithm and for that, you can use any of the technical indicators (that you can further customize) or available trading signals by entering your enter and exit signals. This can be done for multiple stocks at the same time.
While you are providing inputs, you need to select aspects such as charting interval in the range of 1 min, 5 min, 1 hour, 1 day etc depending on your trading preferences. At the same time, you need to enter target price and stop loss percentages as well. Remember, no need to put in monetary values and just percentages will do.
Once you create, you can backtest the results by viewing the results and further, editing some of the key metrics in order to meet your requisite returns. However, make sure whatever editing you do with metrics such as stop loss percentage, target profit, candle interval etc, you must stick with those numbers with the chosen stocks. Otherwise, it will only kill the purpose of the usage of the tool itself.
The backtesting results provide you with information on maximum gains, maximum loss, average gain per winning trade, the average loss per losing trade, maximum drawdown etc.
With these results in front of you, you can gauge the performance of the trading strategy without actually putting in any capital from your end. It also gives you insights on the kind of profitability and risks associated with your strategy.
Finally, post-testing you can deploy the algorithm at intraday or overnight order levels. However, you cannot use any margin while you place the order using the algo. Zerodha streak comes back into play and monitors different stocks movements at the same time, based on the kind of algorithm you have set up. Once the criteria are met, you are provided with a notification in your browser.
This is the time, you can finally go ahead and place your order (buy/sell).
Zerodha Streak – Pricing
As of now, Zerodha Streak is free to use until 31st March 2018 where it provides you with 25 backtests a day and 5 algorithms to access at any given point in time.
Post 31st March 2018, it is going to cost you ₹500 per month as a subscription charge where you will get access to 100 backtests a day and 50 algorithms to access at any single time. In other words, it is going to charge you an extra cost of ₹6000 per year if you choose to use it on a regular basis. Honestly, this is not a huge price to pay as long as you understand how to use Zerodha Streak and you are able to generate consistent profits from this algo-tool.
At the same time, if you are a beginner level trade, take a free trial, see how much money you are actually going to put in your trades. Based on the kind of returns you make, you may choose to use this tool.