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Algo Trading: Avoid Losing Money In The Stock Market

algo trading

Algo trading is a new way of doing intraday trading these days. So, what is the catch?

Well, it is a common belief that more than 90 per cent of retail traders loses money in day trading. I believe you’re also one of them and that’s why you are reading these post.

Perhaps you’ve tried everything from fundamental to technical analysis. However, you are still not in the winning flock.

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Trading Psychology: Traits and Habits of Losing Traders

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You have traded from equity to futures, options to commodity and you found no improvement in your trading results.

Moreover, you are still searching a holy grail trading strategies. Believe me, there is no trading strategy exist which lets you avoid losing money while trading.

Even the best trader also fail and face the same situation and so don’t lose your heart.

So, if you want to make money from trading and to be on the winning side, then you need to think like a winning trader.

Have you ever imagine why most of the traders fail in intraday trading. It is not about the fundamental and technical knowledge.

The only thing that stops you to win is none other than you. Yes, you heard me right.

Your emotion is the main culprit that lets you lose every time you trade. You need to be disciplined in your trading. However, the truth is that your emotions never allow you to remain disciplined.

So, what will you do to trade emotionless?

Well, as a human being it is one of the hardest things to control your emotions. You need to trade like a robot without any emotions like fear, greed, and hope.

However, Algo trading is the solution that enables you to trade just like a robot. Algo trading is nothing but an automated trading system having pre-defined rules and strategies. It is also called a Black Box trading system.

Algo Trading: The Concept

Assume you are following Opening Range Breakout (ORB) trading strategy. Moreover, you have a list of stocks that you track and willing to apply ORB trading strategy in those stocks.

The problem is that you cannot place orders to all those stocks at a certain time period.

Suppose you have a list of top 10 favourites stocks for intraday trading. Moreover, you want to trade in these stocks if their opening range of 15 minutes gives a breakout signal.

So, at the same time, it is absolutely not possible to place orders on all the 10 stocks. Even, the price which you enter may not be a proper one.

Because of that manually placing order is not so effective for you. Whereas, Algo trading can easily do these task very easily.

The best part in automated trading is all your entry and exit orders will be without any emotions.

Basically, Algo trading lets you set up your trading strategy very easily. Your order gets executed whenever any trade signal generated.

Automated Trading is based on quantitative trading strategies. It automatically places trades in your own broker account in a few seconds.

With the help of Robo trading, you can avoid emotions and reckless trading. All you need is to backtest your strategy first and then deploy it.

Nowadays, deploying automated trading is relatively simple and unbelievably easy. You can create your own strategies using different technical indicators like RSI, MACD, EMA and more.

Once you deployed your strategies, you can enter and exit your positions in just a click.

You can use Algo trading web-based application like Zerodha Streak, Algonomics, Omnesys Nest, ODIN, and Presto ATS.

If you like this post on Black Box trading, then kindly share it on your social networks.


Published on: July 23, 2019

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