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Wednesday, January 29, 2014

Algo for Retail Traders and Small Traders



First of all know why you invest in Stock Market. How much return you expect from stock market?
we invest in stock market bcoz we get more return than any other traditional investment option available in India.
Like : Fixed Deposit, Bond, Gold and Land or Property.

we can expect average return from Stock market from 18% - 26% if we do trade in investment way. It can be up to 60% - 80 % if we invest in Bear Market.
If we do daily Trading than we can get monthly gain as high as 100% and as low as (minus) -100%.
But I will suggest if you are an investor than you also can make yearly 36% - 60% minimum. If you trade in systematical way with proper (Positional and Intraday).
Algo is smart tool to get benefits where human make errors & mistakes and if You have good indicator than you can make monthly from 10% - 30% monthly.

 
Cost factor in Algo Trading
Some company advertising that you can do Algo Trading in very low capital.
As low as Rs 5000. Is it practical ?
Definitely ….  NO !!!

Algo Trading has many features but same time it has some cost factor too.
If your earning is lower than your monthly expenses than how you can make profit?
Normally Algo Trade cost you every month between Rs 1500 – Rs. 5500
If you have capital is less than Rs 50,000. Don’t go for ALGO !!!

Suppose your capital is Rs 25000. Monthly earning after deducting brokerage and other expenses you get 10% gain. That is Rs 2500.
Now deduct Algo expenses.
If you are doing Algo trading from Ur home. What will be cost?
Interest in Investment – early 16%                               Rs 334
One PC or laptop will be required -                             Rs 0
Monthly electric expenses -                                            Rs 200
Monthly Internet Expenses -                                           Rs 500
Nest API client -                                                                 Rs 295
RT data (GDFL or Other Vendor) -                                Rs 1650 or Rs 500

Do you think retail can afford that much cost to earn just 10% - 12% monthly.

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