This is again in relation to the custom trading software I am making for myself. Can I code an order slicing algo with will cut up a huge (say 1000 lots) order into smaller (50 each) and place them once every 2 seconds. Will this be considered as fully automatic trading? Is this legal? Is it advisable to do this?
Thank you!
I am not sure how you can create it but there if it can be done then there is no way for anyone to figure it out, only objection is a broker should not provide this to retail clients, also entities should get prior approval from exchanges to do this. Also for indices 1000 lots is nothing, (impact cost, slippages will be less with enough liquidity) it makes difference only for stock futures.
Thanks for replying!
I intend to use kite api after I work out the basics. I wanted to make sure its legal to place 1000 - say 10000 lots in smaller quantities. I didn’t see the slice option in kite or pi. Hence my question. If I place an order once every 2 seconds is it okay? Will it be considered as automatic trading by computer or something? SEBI is kinda getting nuts these days, so I just wanted to make sure nothing I do is even near illegal.
Thanks once again!
Yes legal and I have done it many times. However, if you trade intraday, each order will incur a Rs 20 charge - so there is a cost benifit analysis to be made. In case you are using this to create a buy and hold portfolio - this is absolutely necessary to fill large orders and get the best price. There are many strategies to fill large orders - slicing is one of them.
I intend to do scalping. Any pointers on profitablility?
Depends. Usually 3-4k per trade.
Thank you! I wanted to semi automate scalping that’s why.