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created : 2 months ago| |  live deployment: 11

Strategy description

TradingBots is glad to launch its first strategy "BANKNIFTY XPRESS" on Tradetron. 



About the strategy:

It has taken us almost a year and countless hours of hard work ( & backtesting) to build an effective trading system that is expected to generate stable long term returns in any market condition (based on our backtesting results). The algorithm is not just a simple technical analysis based strategy. It is a product of our proprietary, highly complex set of coding instructions coupled with a powerful technical analysis system. The system is trained to look into the historical data and take intelligent trading decisions based on the past behavior of the market. This enables the strategy to filter out most of the loss-making signals initially triggered by the technical analysis system.

Most of the trading strategies only look at the current state of the market and trigger signals after certain conditions are satisfied. The USP of our trading system is that it analyzes both - the current market conditions as well as the historical behavior of the market. We work very hard on a regular basis to train, adapt, and update our trading system as per the prevalent market conditions.


Risk and Facts:
We strive to keep our system relevant in any market condition. However, we also acknowledge that markets are random and cannot be predicted with absolute certainty. Please note that we don't guarantee a similar performance in the future and are not responsible for any losses. We don't encourage risk-averse investors to subscribe to any Banknifty strategy, including ours. Our system cannot be 100% accurate because even if the conditions are similar to the past, markets might not replicate the same behavior every time. In fact, there were powerful technical entry signals not only in our winning trades but also in most of our losing trades.

Though we expect our strategy to deliver good returns in the long run, we do not guarantee anything. Subscribers should check the paper trading performance before deploying it live. We aim to be prudent and transparent. We don't intend to make any false promises or hide the risks and facts from the subscribers. Therefore we have added - detailed disclosures, information on the required trading psychology, and the detailed 5-year backtesting results on our strategy page.



About us:

We are a longtime stock-market and coding enthusiasts. We code to decode (the markets). We started coding our strategies last year. Our strategy building process has been very complicated and it demands a lot of time and effort. We aim to launch strategies that have a real edge and that can adapt to any market condition. Hence we don't intend to have a large basket of strategies just for the heck of it. When we started our venture, we had initially planned to build our own end-to-end system for our clients. However, we stumbled upon Tradetron and decided to start here.  



Telegram:

Please subscribe to our telegram channel for updates and offers (click to open):  TradingBots


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Introductory offer: 

As an introductory offer, we have completely waived off the monthly fee of Rs. 3000



Strategy Details:
  1. The strategy is thoroughly backtested using minute level Banknifty futures data since 2015. However, please note that backtesting does not guarantee a similar performance in the future. It's just for your information. 
  2. It is mainly a positional strategy (using "NRML" order type), but it can trigger intraday trades as well (using "NRML" order only). 
  3. Having a sufficient margin is important. It requires a margin of ~Rs. 1,35,000 for 1 lot of Banknifty.  Please check the margin requirements with your broker. We would recommend an additional buffer of 10 to 20 thousand.
  4. There are No False signals/Repainting/Look-Ahead Bias issues in our strategy.
  5. The strategy needs to be deployed in "Live Auto" mode ONLY (fully automatic mode), to avoid slippages during the wild moves.  Also, please note that there could be a number of days when there are no trades. 
  6. The average number of trades triggered every month could vary (as per the market volatility and the opportunity provided by the market). 
  7. The strategy is run from our own servers which are kept ON 24x7. 

Risk management:
  1. Position size: We have kept 1X as the base option. We would recommend 3 lots if you have sufficient capital (profits are sizeable and losses are bearable). Beginners should start with 1 lot only and get accustomed to the price movements first. 
  2. Entry & Exit: It has well-defined entry and exit parameters. 
  3. Stop Loss: It has an intelligent risk management system with a dynamic stop loss (again, based on market conditions) and it does not panic sell. On average, a stop loss of ~1.1% (of Banknifty) should be expected (Historical Average: 0.59%, Min: 0.1% and Max: 2.5%). Trailing stop loss is not suitable for this strategy. We do not advise any manual intervention.
  4. Slippages vs Paper trading Our strategy is not dependent on Tradetron's signal processing system.  Our strategy is processed by our own servers and the signals are sent directly to Tradetron for trade execution..Thus there is no added layer of latency which can cause slippages. The slippages are generally minimal in our strategy. We don't expect a huge difference in live-trading vs the paper-trading performance (as shown in the Tradetron performance chart). Slippages mainly occur because of low liquidity, high volatility, and a huge delay in execution (>15 to 30 seconds).  Banknifty has enough liquidity with huge volumes. Also, Tradetron generally places the order within 3 to 6 seconds of the signal generation. The slippage would be equal to the movement in Banknifty in this time frame. In general, the prices are not expected to change significantly in this timeframe. However, if the volatility is too high, there would be some slippage.
  5. Gap up and gap down risk: There is always a gap-up and gap-down risk in a positional trade. On the contrary, if you are on the right side such gap-up and gap-down openings substantially increase the profits. We are taking positional trades and not BTST trades. There are various scenarios that we can consider. Few of them are as follows: Example 1: There is a gap down after 4 days of a profitable buy trade. In this case, the accrued profits will absorb the losses.  Example 2: Trade is taken at the end of the day and there is a gap down on the very next day. There will be a loss in this case. Losses are an integral part of the system. You need to have a risk appetite to bear such short term losses and remember that it is not our last trade. The backtesting results have been achieved after factoring in all such risks. Therefore, short term deployment is not recommended.
  6. Black Swan event: Such events are extremely rare and traders don't stop trading worrying about this risk. However, if required, you can hedge your position at your end.
  7. Hedging: To hedge for the positional risk, you can buy ATM+-500 strike price options in the opposite direction. For example, if the system has taken a long position at 22,000, you can buy a put option of 21,500 (or any strike that you want) to hedge. The price would be cheap and it can act as insurance. However, it should be considered as a sunk cost as the option prices can reduce drastically due to theta decay.


Risk Capital:


Our strategy is a high risk - high return potential strategy. When you decide to deploy, you need to keep aside ATLEAST Rs. 25K for 1 lot-> The capital that you should be willing to risk. You should be able to bear a loss amounting to this capital  (You can also keep this as a stop loss for the strategy if you want) :


1x=25K
2x=50K
3x=75k
 

10x=2.5L


Important Terms and conditions:

  1. As a subscriber of TradingBots, you acknowledge that you have read all the details and the disclaimer on our strategy page. 
  2. You completely understand the risks involved and accept the responsibility for any kind of losses incurred in the transactions. 
  3. You understand that the backtesting results are only for your information and it does not guarantee a similar live trading performance. 
  4. The invoice for the variable fee will be generated on the last trading day of every month (irrespective of the joining date).
  5. We keep on updating our systems for optimal performance. Hence the system behaviour, the number of trades and other parameters depend on the current market conditions, opportunitites and not on the backtesting results.
  6. The subscribers who are deploying the strategy (either in live trading or paper trading) will get new signals only after the ongoing position is exited. Please note that there will be no new signal generated until then. It could take a few days.  
  7. Manual intervention is strictly prohibited. 
  8. If you face any technical difficultly please feel free to reach out to us on email. However, kindly don't email us asking for additional details regarding the strategy and backtesting. We have already disclosed everything that we could disclose. We won't be able to disclose any further details. 
  9. If you have any kind of reservations please forward-test it on paper-trading mode for as long as you need.  The decision of live deployment rests entirely upon you. We don't encourage live trading before you understand the risks.

Trading Psychology and Mindset required for our system:

Though we are not responsible for any losses, we are concerned about our subscribers and their capital. Before deploying the strategy please go through the below requirements and check if the strategy suits your personality and requirements:

  1. We don't advise risk-averse investors to trade in any Banknifty strategy including ours. 
  2. The strategy intends to deliver good returns in the long term. It is not suitable for short term traders looking to make a quick buck on a daily basis. 
  3. It is essentially a 'Subscribe and Forget' strategy like a mutual fund. 
  4. Patience is the key. There are many ups and downs in a positional trade. The system might not exit a trade unless there is a clear change in the trend. One should not get worried about these short term moves. Also, a profitable trade above could end up in a loss. However, there will be many highly profitable opportunities as well in the process. We need to stick to the system and be patient. Again, this strategy is not for short term traders! 
  5. In general, trading is against human nature. It is difficult to accept losses. Novice traders try to recover losses as soon as possible and that is where most of them blow up their accounts! When there are losses, the subscribers should not be tempted to recover losses by trading manually with a revenge trading mentality. 
  6. We are not gambling. Having an open position every time is not our goal. Trading in Banknifty is a risky business and we don't need to get into a trade when the chances of winning are not in our favor. 
  7. There will be many lost opportunities. The backtest results have been achieved after factoring in many such lost opportunities. The markets are not going anywhere. There's always a new opportunity.
  8. Don't give us a negative review if the short term performance after your subscription is -ve. Please check the trades at the bottom to understand the ups and downs and the various possibilities. 
  9. It is not a magical prediction tool that can buy at lows and sell at highs. The strategy just tries to identify the trend and capture profitable trades in the process.
 

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Important Notice:



Our Email Support will be available ONLY for technical difficulties:

  1. We have been getting a lot of emails asking for additional details on the strategy, backtesting, trades taken, number of trades, losses, etc. 
  2. We need to focus our attention on our core expertise i.e building our strategies. And we haven't been able to do so. Hence we have decided that we would not be replying to any queries regarding the strategy, backtesting, etc.
  3. The strategy page includes all the information that we can disclose from our end. We cannot disclose any further details. Everything that you need to know has already been mentioned. There is nothing else that we can disclose. But we are still getting questions on information that is already available on the page.
  4.  Also, you can follow our telegram channel for updates
  5. We would be available only to resolve the technical difficulties faced by the subscribers. However, our systems are quite stable and there won't be regular issues.  A constant back and forth communication is not required.

Forward testing:

  1. If you have any further questions, you should forward-test the strategy on paper-trading mode. Please check the tradetron equity graph below to see the latest performance. The actual results are almost equal to the one captured by Tradetron. 
  2. Also, before deploying please paper trade it for as long as you are not comfortable with the price movements and the profits and losses. 
  3. If you have any concerns and questions even then, please don't deploy the strategy (it's for your own good).
  4. Please don't be in a hurry to deploy it. We too are not in a hurry to build our subscriber base. 
  5. Do not rely on the backtesting results. It's only for your information. There is no guarantee that the strategy would yield similar results in the future. 

Live Deployment: 

  1. Only LIVE-AUTO mode is allowed for live deployment. 
  2. The strategy will always be in 'Live-Entered' mode (after the first trade in your deployment) as it's an API driven strategy (it will show 'Active' until the first trade is taken). 
  3. Manual intervention is strictly prohibited.
  4. The deployment decision rests entirely upon you. Deploy it only if you agree to the terms & conditions, risks & facts, disclaimers, and other details on our page. We update our page regularly to include all the information that the subscribers need to know.
  5. We are just providing you a tool (strategy) for trading. You need to test it thoroughly. We are not liable to explain any other details. Also, we are not responsible for any losses whatsoever.
  6. After deployment, please don't start asking us questions if the trade taken is not in line with your own discretion regarding the market trend (we are getting such questions!). Deploy it ONLY when you trust the system and let it do the workDon't use your own discretion if you decide to use the strategy. 
  7. Deploy it only if you like it in paper trading mode. However, as markets are random, future performance cannot be guaranteed. You can stop using it if you don't like it. 

 

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Backtesting Results & Analysis (since 2015, using 3 lots):


This is only for your information. we don't promote backtesting because it does not guarantee a similar performance in the future. As markets are random, there is no guarantee of similar future performance. 


Highlights:
  1. Starting capital= Rs. 4.5L
  2. Ending capital= Rs. 52.7L (after deducting transaction costs).
  3. Winning rate of 68% in the backtesting. Note: At least 4 out of 10 losing trades are expected. We don't intend to hide any facts!. 
  4. CAR/MAX DD of 4.36 should be >2 for a good strategy. It is the Compound Annual % Return divided by Max system % drawdown
  5. Sharpe ratio of 3.08 should be >1 for a good strategy. It measures the risk-adjusted return of investment
  6. Historical max Drawdown: 12.7% backtesting figure should be less than 20% for a good strategy (could be higher in the future).
  7. Transaction costs of 0.02% are considered in the backtesting calculations (~Rs. 331 average per trade, including Brokerage, STT, and all other charges).

These are the system generated backtesting report snapshots:








Recent 2-month Performance: June 20 to July 20




Highlights of June 2020 -July 2020:


  • Starting capital: Rs. 4,50,000 (min 4L required for 3 lots)
  • Net profit: Rs. 2,49,716 (more than 50%  return  on capital, after deducting transaction costs)
  • Max profit: Rs. 92,537 (~4 times the max loss, could be lower in the future) 
  • Max loss: Rs. 22,846 (could be higher in the future)
  • Average StopLoss: 0.95% (could be higher in the future)


    Disclaimer:

    Banknifty is an extremely volatile instrument and there is a high degree of risk involved in trading. Past returns are not indicative of future returns. Please understand the risks involved before deploying the strategy for live trading. Though we have thoroughly backtested the strategy, we do not guarantee any profits and are not responsible for any losses incurred by anyone. Further, as a subscriber of TradingBots, you acknowledge that subscribing to our strategy is your personal decision and you completely understand the risks involved and you accept the responsibility for any kind of losses incurred in the transactions. We are not SEBI registered analysts and we do not provide any stock tips and trading recommendations. You agree to access the risks with your investment advisor and make informed trading decisions regarding any securities mentioned herein. 




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