Have you always thought that algos, program-based trading, backtesting tools are privy to a select few? We at Zerodha have introduced algoZ to break this myth by offering an algo product completely free of cost and more importantly by dedicating an entire section on Z-Connect to train you on writing/backtesting/going live on a technical analysis strategy. You don’t need any programming background but at least basic technical analysis knowledge is a prerequisite.
What is algoZ?
algoZ is a complete TA (Technical Analysis) based “Algo Suite” for our retail clients.
What this means is that other than just charting, you can actually write a strategy, backtest it to see if it would have made money and once decided you can take the strategy live semi-automated. If you’d like to fully automate your trades, you’ll have to sign up for a Dealer Terminal which will have an additional option to automate the trades, do speak to our support team about this. We will also be getting help from professional programmers to explain how to convert your technical analysis strategy into a code.
Remember that algoZ is based on technical analysis. Click here to know how to invoke charts on ZT.
We will divide the section of algoZ on Z-Connect into
1. Showing you a basic example on how algoZ works, so you know how easy it is.
2. How to use an Expression Window to write your strategy? We also have an explanation on the various fields and their uses, see the pic below of the expression window to get an idea of how it looks like:
3. How to backtest a strategy to know if your strategy would have made money or not in the past and reading the details on the backtest window. See the pic below:
4. Taking your strategy live, semi/fully automated. How to preset orders for your strategy and use the various fields in the preset order/alert preference box. Explanation on how to run multiple scripts/programs at the same time and manage them. How to act on alerts when your strategy gives a buy/sell indicator.
Pic showing the preset order/alert preference window
Pic showing how multiple scripts/programs can run at the same time
Pic showing a sample alert window
5. Tutorial on Writing a Strategy: Interact with our programmers and get help to understand how your technical analysis strategy can be converted into code. It might be a little tricky to start off with, but we will be by your side assisting you as usual to learn this in the simplest possible way. We will cover basic to intermediate strategies in this section.
As usual, you can ask us questions at the end of every blog and we will be more than happy to answer any query you may have. Tutorials on writing a strategy will be a complete subsection as I’d assume this is where you would need the most help. Everything else is pretty simple. To reiterate, we will not be teaching you technical analysis, but we will be showing how you can write your strategy, backtest it to see if it would have made you profits and take it live either semi or completely automated.
How will this compare to a professional charting software?
a. You will have almost all commonly used indicators, but a professional charting software will have a lot more options. The charting interface on a professional charting software would be better.
b. The charts can be plotted against almost any time frame starting at 1 minute. You can customize your candles/bars from 1 minute to anything you want just like other charting tools. In the beta version, you will not have access to as much data as you will find in a professional charting software. You will have intraday data of upto 22 days and daily charts of more than 3 years.
c. Not only will you have features like writing a strategy & backtesting, as explained above, you will also have an option to go live which would not be available on other regular charting software.
Advantages of algoZ
1. algoZ will offer extremely low latency feeds since it is integrated into Zerodha Trader. Professional charting tools integrate external feeds to their software which may increase latency.
2. “Opportunity – spotting to execution.” Since algoZ is on ZT, whenever your strategy presents an opportunity, you will have an option to either automatically or semi-automatically execute (a buy/sell window pops up and you just have to click OK) or manually place the order. Compare this to a professional charting tool; you will keep tracking charts/alerts on a different window and whenever an opportunity arises, you will have to switch between screens to your trading platform and place your order manually, which might mean a crucial few seconds.
3. Finally, the cost. Today the cost of licensing a professional charting tool would be a one-time fee of between Rs. 5000 and Rs. 25000 and a recurring data feed cost of between Rs. 1000 and Rs. 4000 per month based on how many exchanges’ data feed you subscribe to. This could mean a big overhead on your trading capital.
At Zerodha we constantly try to offer not only the best services/products but also try our best to be as cost effective as possible to keep you in “profits.”
algoZ would be completely FREE for all our active clients on ZT (Zerodha Trader) starting April 24, 2013.
*if the above menus are not pre-enabled on your ZT, send an email to [email protected], we will have it done for you in a jiffy.
As Jesse Livermore says, “The price pattern reminds you that every movement of importance is but a repetition of similar price movements, that just as soon as you can familiarize yourself with the actions of the past, you will be able to anticipate and act correctly and profitably upon forthcoming movements.”
If you follow Technical Analysis,algoZ should improve your odds of winning significantly.
**Do note that all support for algoZ will be provided online only on Z-Connect. If you have queries on writing, backtesting, or taking strategies live, make sure you ask us on the applicable blogs.
Explain your technical analysis strategy in detail on the applicable section and we will help you write the code for your strategy at no cost for you.
The formulas or codes that we help you write is our view on your query. Zerodha is not liable for the correctness of it or for any trades that you take based on it. algoZ/Nest Pulse is provided as a tool to help you trade better, make sure that you double check before taking any trade based on the signals generated.