Algo Trading is all about the execution of trade in the stock market based on predefined criteria using computer programs. Being in demand Algo Trading NSE has made certain interventions to bring transformation in the trading world.
With the introduction of the concept of algo trading, NSE started offering co-location server ‘racks’ on lease. This helps brokers to bring improvement in the speed of trading.
At the time, some of the domestic firms to which NSE offers the server in lease were:
Well, the software is important to initiate the algo trading process, but it is equally essential to understand the process of automating the trading strategies.
Since now we are able to understand that automation helps the trader to improve the speed and accuracy of execution, enhancing scalability, bringing higher discipline, etc, now it’s the time to execute the steps in the right direction to get the desirable results in hand.
Here are the few steps that NSE follow to automate the algo trading strategies:
Gathering Data: NSE avails the data to the broker and trader by assessing the current market status and also by analyzing the historical data if required.
Conducting Research: NSE makes use of the best research tools and packages that offer good research ideas that eventually help traders to get the best trading ideas.
Creating Algorithm: Here the role of software comes into play. The software available these days ease this complex task that reduces the step of coding and avail the algorithm that further helps traders in building their strategies.
Backtesting of Strategy: NSE makes use of historical data and other data-set to backtest their strategies.
Streaming Live Data: After successful backtesting, NSE stream the live data that is used up by the broker and exchange vendor using their respective APIs.
Python Algo Trading NSE
Python is the best and the most preferred language that has been used to do algo trading.
NSE offers the algo trading results using Python and by utilizing different apps and software available.
Here we are considering Zerodha Kite to explain how Python is playing a great role in Algo Trading NSE.
To get started, in need to:
Sign up with the Zerodha Trading Account
Register for the Kite Connect Account
Log in to the Developer account of the Kite
Start using the platform for creating own strategies.
In all python, algorithmic trading, NSE has helped in building statistical models with the help of available libraries like Pandas, NumPy, PyAlgoTrade, etc.
The algo trade NSE makes use of different data points to empower its decision-making process. With the right use of cycles, volume, ratios, trends, volatility increases the probability of providing positive investment results.
In case you are looking to use algo-trading apps or start stock market investments in general, let us assist you in taking the next steps ahead: