Where am I wrong?

Trading
1

Hi friends,

I recently backtested a strategy on the Nifty spot chart (due to data availability) and am now executing it through synthetic futures using the ATO function provided by Zerodha. However, I’m facing an issue.

I took an actual trade with 1 lot — while the spot chart shows the trade at cost, my actual position is reflecting a loss of Rs.1,500.

Could someone please help me understand why this is happening and how I can rectify it?
I’ve put a lot of effort into the backtest, but now I’m stuck at the execution stage. Your guidance would mean a lot!

Thanks,

2

It’s caused due to IV and impact cost of options which are volatile by nature. :face_holding_back_tears:

If you want closer results to spot backtest, use futures, or better use futures for backtest and implementation. :white_check_mark:

Zerodha offers continuous data (daily timeframe) for historical futures contracts. :rocket:

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3

Do you think it’ll even out across many trades, like sometimes I m making more, sometimes less?

4

The market makers will always take their cut on your way in and out, improve your backtest to include 0.5% impact cost among other charges. :control_knobs:

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