Is Algo Trading In India Used In The Indian Capital Market?

Algo Trading India is very widely
used in the developed market. Algo trading India is introduced in 2008 and from
then this is a common trading mechanism in the country. With certain
conditions, SEBI has allowed Algo to trade India. It includes a lot of risk
management systems and even annual audits of brokers systems by CISA which is
Certified Information System Auditors. This is machine-driven trading that
enables the traders to trade based on the data fed into the system or it may
also trade automatically on behalf of the traders.What is the basic job of Algo
trading India?In a stock market in India Algo
term is derived from Algorithms which are software programs mainly designed to
gather data required for trading and back-testing the profit and loss historically.
The system also trades automatically on behalf of the trader. To bring the data from the market
as input and feed this into the system. Based on this data order is placed
automatically based on the trading signals which are generated by the system.Algo trading India is a concept
that is widely accepted in the Indian Capital MarketIn Algo
Trading India if the user is applying algo to backtest tactics or produce
manual alerts, the only directive that is required is to be worried about is
the exchange data vending regulation. A brokerage firm is only allowed to give
data to their trading customers for free. There is only one challenge if anyone
consumes data from any broker, it cannot be republished without exchange
approvals. Advantages of Algo Trading IndiaAlgorithmic Trading India is a new
concept but is widely used in the capital markets in India as the program used
for such mechanism is user friendly and takes much less time for trading high
volume portfolios.• Trading is carried out at the
best price.• Algo trading India does not
involve any human psychology.• Reduces the transaction cost.• Order placement in trading is
accurate and instant.• There are no manual errors
during placing the trades.• Such trading can be carried out
in multiple markets and in involves automated checks.Common functions of Algo Trading
IndiaAlgo Trading India involves many
forms of trading and investment. . Midterm to Long term investors
uses Algo trading for investing in pension funds, insurance companies, mutual
funds. Algo Trading is also used to buy stocks in large volume. . Market makers, speculators, and
arbitrageurs benefit a lot from Algo trading. They can create lot of liquidity
for sellers in the market.. Systematic traders – trend
followers, pair traders, hedge funds find the program very efficient and they
let the program trade automatically on their behalf. Technical requirement for Algo
Trading IndiaThe user must implement the
algorithm by using the computer program for algo trading. The following are the
basic requirements for Algo trading.. Computer programming knowledge. Network connectivity and access
to the trading platform. Access to capital market data
feedbacks that are checked by algo.. The ability and the
infrastructure to backtest the system.. Access to the available data
for backtesting depending on the complexity of the rules of algo.Conclusion:Algo trading
India is a new concept and not very easy to execute and simple. Experienced and
expert algo traders can be a good help to start with.