Should You Go For Algorithmic and Quantitative Trading

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A lot of people are now moving towards what traders are trying to do in US, UK and other developed nation – Algorithmic and Quantitative Trading.

So I thought let me write a quick post and tell you what it is.

Algorithmic trading is basically done by machines. You must be thinking – wow machines who do not have any emotions of greed and fear – wow they will make a lot of money trading on formulas.

I have made formulas in bold. WHY? Because this is the most important part of Algorithmic Trading.

Who will write the formula? And what formula – what exactly is the strategy?

This is where Algorithmic and Quantitative Trading fails. On top of that paying a monthly fees to trade will reduce the profits. And what if your account takes a BIG LOSS? Will you blame the machines or yourself?

Read these huge Algorithmic and Quantitative Trading failures:

High-frequency trading and the $440m mistake

How one bad algorithm cost traders $440m

Interactive Brokers fined $4.5 million for algo trading system failures

Concerns over risk in Algorithm trading

And this in our own country:

Sebi sends NSE final show cause notice in algo-trading case

So my request is do not try something that has not be proven yet to be successful in the long run. If something goes wrong it can cost a lot of money.

I am telling this since years:

DO NOT LOOK FOR HOME RUN EVERYTIME YOU TRADE – JUST HEDGE YOUR TRADES AND LOOK FOR SMALL PROFITS CONSISTENTLY.

If you can succeed in taking small profits home consistently you can grow your trading account big in months and years to come. Think 3-5 years from now – not today, tomorrow or this month.

The motto of my Nifty and Bank Nifty courses are the same – learn to hedge and take small profits home. Do not care for the noise that goes on in Internet, media, social media like Telegram, Whatsapp etc, Algo trading talks, business channels in TV etc.

All these are just noise.

Just think about this simple investment – invest in SBI and keep it for 5 years. What do you think will happen? One thing is certain you will make at least 10% a year or more. Is this Algorithmic Trading? NO – Is this any Technical Analysis – NO. Is this any Price Action – NO. Is this any Bollinger Band, Candle Stick Charts, Cup & Handle Pattern – NO NOTHING.

So What It Is? It is KISS – KEEP IT SIMPLE STUPID.

Yes my strategies are just that – invest in options – hedge it and when it is making money – exit. Simple. No extraordinary adjustments – price action – regular watching etc. But it does work because the logic is strong and it works.

You can enroll for the courses here.

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INCOME DISCLAIMER: Any references in this site of income made by the traders are given to me by them either through Email or WhatsApp as a Thank You message. However, every trade depends on the trader and his level of risk-taking capability, knowledge and experience. Moreover, stock market investments and trading are subject to market risks. Therefore there is no guarantee that everyone will achieve the same or similar results. My aim is to make you a better & disciplined trader with the stock trading and investing education and strategies you get from this website.

DISCLAIMER: I am NOT an Investment Adviser (IA). I am an Authorized Person (AP) of a Stock Broker. I do not give tips or advisory services by SMS, Email, WhatsApp or any other forms of social media. I strictly adhere to the laws of my country. I only offer education for free on finance, risk management & investments in stock markets through the articles on this website. You must consult an authorized Investment Adviser (IA) or do thorough research before investing in any stock or derivative using any strategy given on this website. I am not responsible for any investment decision you take after reading an article on this website. Click here to read the disclaimer in full.

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