100% Returns in 3 Months!, Algo-Strategies are Boon for retail investors or Ponzi schemes?
Let’s uncover the myth on Algo-Strategies, if you are new to algo-trading link to my previous Medium story will help you; Algo is where Indian Market will Go? in this story I have shared my hand’s on experience with algo trading, legality, requirements and review of platforms along with brokers.
What is the recipe for Algo-Strategies to out-perform?
SALT isn’t just the main ingredient of food it works well with Algo’s too:
Seamless Integration with Broker
A platform to create strategy
Theoretically proven bookish strategies
Deep-diving in each of them, a fraction of a second could also turn the table during sharp moments hence it is must to have seamless Integration between algo-platform and broker. Talking about platform to create, instruct and repeat; a reliable and user friendly UI without the any requirement of coding skills is always a plus. Why are we considering leverage here, promise of 100% on investment can’t be true without the existence of margins as strategies require multiple combination of long and short trades that can be off-set by a decent margin as experts say, Strategies don’t out-perform the market but the leverage does. And, the last part it is my personal favorite; wisdom on theoretically proven strategies. Strategies can be created using technical analysis, logical hedges and many more. Our books have proven strategies which are based on logics and technical indicators as human’s reacts in similar manner in similar situation, which is they just repeat their pattern in same settings as they previously did.
How do they bag 100% in 3 months?
After screening, back-testing and deploying (live and paper) a total of top 100 strategies along different market places, it was evident that majority of them deal with options (multi-legged). which are well hedged legs with a stop-loss ranging between Rs. 1500 to 2500 as per the strategy requiring a average margin of 35000 and a daily average return of 2250. The catch here is the success rate of >67% which means if we deploy for 10 days (10 trading sessions with single entry exit) we will be making net profit in 30% sessions, that means 12000 to 15000 each month voila 3 months and you get 100% return.
Was this to much for you to handle? Don’t worry most of platforms have market places for algo-strategies from where you can pick the best strategies based on past performance and back testing reports. Also one should paper trade them to build trust before putting the penny on work. If in case you would like to experts to run the entire show for you; We are launching all under one roof product here: GetSetAlgo. (Launching Soon)
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Disclaimer: Read terms and condition of Broker Alice blue or Algo Platform Tradetron before signing up, author of this article is not responsible for any of loss or for any information shared here, this article is create for educational purpose only. Trading cannot be always profitable hence we do not give any trading advice or talk about any strategy in this article.