What is Ami broker? What is Pi bridge? How they help us to trade?

What is Ami broker? What is Pi bridge? How to put them in use?Can some one explain in detail?

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Hi,

This post is little bit lengthy...But Give a Rough idea on Charting, pi bridge etc to those who are very New to the Stock market and Trading system.

Why people trade in share Markets?..

The Ultimate answer is to Earn MONEY.

How to earn MONEY from Share Market?

Buying a Share at Low Price and Sell it with Higher Price and Vice versa.

There are So many Stocks?..Which Stock and What Price I should Buy or Sell?

To Answer this Question, here comes two basic Concepts for selecting Stock and the Price.

They are

1. Fundamental Analysis
2. Technical Analysis

Whether U r getting Buy/Sell tips from Professionals or from Ur Brokerage Firm or Ur self Analysis, the ultimate Buying/Selling Decision is made on the basis of one of the above or both.

Buying/Selling decisions based on Fundamental Analysis:-

In these, U r just analsing the Fundamental or basic data of the Company/Stock.

For ex:

The Company/stock’s worth/Wealth

Its performance in the market..

Its Future plans and Vision. Etc

In more depth EPS, P/E ratio, ROE etc

Based on the above, u r selecting the best stock for Buying,.. in the hope that It’s price ‘ll Go up in near future.

Buying/Selling decisions based on Technical  Analysis:-

Below is the table contains a student’s marks in each test.

Just analyze the below table and find out the probable mark, the student will get in test 5.

TestNo    Mark

1.     35
2.     40
3.     50
4.    65
5.      ?

U can easily find out the probable mark for test 5 .

It implies two things

1.By seeing the table,U can predict that the student ‘ll get more marks than test 4 . More than 65.

2.the Difference between each test mark  increases with muttiplication of 5. i.e.  5,10,15..so in test 5, there are chance he may get 65+20 = 85.

Again,This is Just probability/Prediction..It may come true or May not..May be the student fallen sick during test 5, the His mark ‘ll be ZERO…

Technical analysis works in the same ways as above..

Just predicting the Future price of the Stock With past price.

Why we use chart for technical Analysis?

The adage "A picture is worth a thousand words" refers to the notion that a complex idea can be conveyed with just a single still image

U might have answered the above question in a matter of second. Bcoz, it is just had four values, So U calculated easily.

But what happen if the same table has 20 values..This time U’ll take little bit time..But U can calculate..

If the same table has Thousands of values, U can still calculate the answer, but by the time when U find the answer today’s trading session might have closed.

Here comes the use of chart,

Chart consolidate all data, then Provide u the visualization/Graphical display of the entire value..

By Just seeing the chart, U can find the movement of the price in one look..

Secondly U can apply indicators, Draw objects on chart to predict the price..

Why Use third party Charting software like Amiboker / Ninja Trader etc?

Traditional Trading Terminal provided by most of the Broker will have basic Intraday/Historical Chart (Except Pi and other few who are providing Chart with advanced features).With basic Chart U cann’t do any technical analysis.

For Example, If u want find daily moving average price for past ten Days…It cann’t be done with basic Chart..

But with the Charting software’s Functions, U can easily calculate the Moving average and plot it on the chart. For Example in Amibroker, U can calculate..

MA_10D = MA(C,10);

The above single Line calculates the moving average price for the past ten days. In Manual, U have to add the Ten Day’s close price and Divide it by Ten to Get Average. But with Charting software’s, just a single line‘ll give the answer. Other than the inbuilt functions of the Charting software’s, it enables U to create Ur own functions/Indicators.

To understand more easily..

How Strategy works & What it is?

While watching a chart, U observed that whenever the  price cross the previous hours High, It goes further High. Now U got a simple strategy .i.e. buy when the price moves above Previous Hour High..

How to implement the Strategy?...

It’s nearly impossible to write down the price in a note book and find out the High price of the previous Hour and watch  the current price to cross above the previous high.

Here comes the use of Charting softwares..

I’m taking Amibroker as an example

In Amibroker, To implement Ur Strategy..

Just the following two  line of code ‘ll do

PrvH = timeframegetprice(“H”,inHourly,-1);

When U apply the above code on a live stock chart, whenever the current market price cross above previous High, It’ll give signal in chart that the Price crossed above the Previous High.

Now U Got a Buy Signal from the Chart Based on Your own Strategy..

What Next ..Place a buy Order in Pi..

To Place order Open/Switch to Pi and Press F1 to Get Buy order Dialog and select the symbol from the list.Fill the price and Qty and press Ok..

By this time the price of the Stock might have moved higher.

What U do now? ,If every time, the same things happen, then I may not be able to place order for every signal.

What‘ll happen if I get signal on many symbols at a time?

Open Buy Order Dialog and Selecting Symbol and input price and Qty and press Ok

Repeating the above for all symbols..

Suddenly U’ll feel bored/irritated and U may end with entering wrong details in Buy order Dialog..

Here comes the use pi bridge..

It’s nothing but a line/link between the Amibroker and Pi terminal

Pi bridge enable the Amibroker to talk to the Pi terminal in the form of code

Like this  brd.placeOrder

By Just adding the Following line to Ur code Strateggy

i.e

PrvH = timeframegetprice(“H”,inHourly,-1);

brd.PlaceOrder ("NSE", "BHEL-EQ" ,"BHEL","MYSTRTEGY", 1 ,100,0, BuyPrice, 0, "L", "MIS", "AB1234","DAY");

Now What happens, When a signal is generated on Amibroker Chart Say for Example BHEL…

It places the Buy order for BHEL with 100 Qty and Current Mkt Price as Limit Price in Pi .

U just need to Confirm the order..

Ur Precious times have been saved. Thank to the Pi Bridge..

U never gets Bored or Irritated when placing order In Pi with Pi Bridge.

Now U Might have got rough Idea on technical anaylis , Charting Software and Pi Bridge..

1. Ur Trading Ideas/Visualization/strategy can be converted into code and applied for practical use
2. U can apply ur Strategy to many symbols at a time
3. U can use any inbuilt indicators in your strategy
4. Orders can be placed automatically to Pi whenever signal is generated in Amibroker Chart
5. U Can Monitor as many symbols as U want .
6. Back testing ur strategy

What is Back test?

I’m taking  the above Strategy as an example…

U Got Ur  Strategy..But Fear that Is it work?

To confirm it…U are applying Ur Strategy to the Past data.

This is back test.

If it gives Better result..U can take ur Strategy into live..

If not then workout another or fine tune the current Strategy.

To Use Amibroker or any Other Charting Software…

Amibroker or Other charting software Trial or paid versions

U Need to subscribe data from Authorized data vendors

Amibroker can be feed with data by many ways..U can find One that suites U

Little bit Knowledge on programming or Code..

Basic Idea on many Indicators and their Practical Use..

A good strategy

Pi bridge enabled

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Amibroker is a professional technical analysis/charting software, which also comes with ability to backtest and take your strategies live.

Taking strategies live meaning that whenever your set of conditions are met, the Amibroker can fire an instruction to buy/sell. But Ami is not a trading platform, so it has to fire this instruction into a broker trading interface.

Similar to Amibroker, there are other such tools like Esignal, metastock, Ninjatrader, and more. But Amibroker is by far the most popular out there in India.

Why use Amibroker?

It provides advance charting tools. But more importantly what makes Amibroker powerful is AFL (amibroker formula language). The programming language using which you can do backtesting, optimization of strategies, and a lot more on Ami.

Since the typical trading platform doesn't offer this, it might make sense to use Ami, especially more if you have a programming background.

We at Zerodha have a partnership with Neotrade analytics and Global data feeds. You can buy the licensed version of Amibroker from either. The cost I guess is around 30k to 40k. You can check their respective websites. There are many who use cracked versions, but best avoided.

Running cost?

Remember that once you have Ami, you still need data on it to see charts or run your strategies. So you have to buy live data from either of the above mentioned authorized data vendors. The cost is between Rs 1000 to Rs 2000 per month.

What is Pi bridge?

Pi is Zerodha's new trading platform which also comes with advanced charting and backtesting interface. (Can't be compared to Amibroker though).

For people who are using AFL to optimized/take strategies live, they can use the bridge that we have built to fire the instruction to trade on to the trading platform(pi) directly from amibroker.

But remember to use the bridge you will need knowledge of AFL.

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@Chokkalingam Lovely da… wonderfully explained, quite some effort. Appreciate that.

can you send the link for the cracked version of amibroker?