Originally Posted by amarnath

I see 5k bucks is not kinda high when we want to have features like automation of trades and API access for their trading platform or client front end

Amarnath Sir ,

i said 5K $ , i.e. around 250 k INR.

Not Everyone would like to deposite that amount to them while he wont like to trade with 3.5 bps as brokerage.

Yeah , if somebody is interested in IB data then he/she can think about it. But as far as i know , Data r poor in IB. Plus backfill limitations.

I would better spend 100$ pm on Esignal data feeds rather then IB. And sir Automation sounds greek to me. As I being a newbie into trading, i dont have any sure shot profitable system which doesnt leg. When i will have my HolyGrail with me. May be i might think to automate it.

Cheers,
Darsh

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Originally Posted by darsh

Amarnath Sir , i said 5K $ , i.e. around 250 k INR. Not Everyone would like to deposite that amount to them while he wont like to trade with 3.5 bps as brokerage. Yeah , if somebody is interested in IB data then he/she can think about it. But as far as i know , Data r poor in IB. Plus backfill limitations. I would better spend 100$ pm on Esignal data feeds rather then IB. And sir Automation sounds greek to me. As I being a newbie into trading, i dont have any sure shot profitable system which doesnt leg. When i will have my HolyGrail with me. May be i might think to automate it. Cheers, Darsh

Dear Darshji,

Nick name of $ = bucks

btw i am well aware quality of IB data and they are consolidated data feed not a a low latency one at least and automated trading is far simple than many thinks but profitable automation is NOT

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Though Amarnath sir ,

There r many Macros can be written from TradeStation to Excel and order can be placed through excel to Odin ( Multi Code ). But it needs profitable system. Thats what i wanted to say.

It could be illegal right now as NSE doesnt allow for automated trading.( as per my best knowledge, one can correct me if i m wrong).

Darsh

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Originally Posted by darsh

Though Amarnath sir , There r many Macros can be written from TradeStation to Excel and order can be placed through excel to Odin ( Multi Code ). But it needs profitable system. Thats what i wanted to say. It could be illegal right now as NSE doesnt allow for automated trading.( as per my best knowledge, one can correct me if i m wrong). Darsh

Darsh, SEBI has granted direct market access to institutional investors a while back. In its strive to achieve better market efficiency and price discovery, SEBI has to expand its arms to other traders as well. It shouldn't be very long.

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As of i know its not illegal to trade using automation on NSE but i didn't investigated too much about it as i never got any practical interest in trading NSE

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Direct Market Access (DMA) and automated trading(AT) are two different things.

DMA is the platform where institutions can directly place their trades into the markets using the primary brokers'(PB) brokerage seat (with due margin considerations etc) without involving the PB resources.
So, even though the orders are routed through the PB seat, those orders are not visible in the PB order book.
The objective of DMA is to offer direct market liquidity to this big institutions and at the same time prevent brokers from front running their institutional clients.
Let us say, Morgan Stanley wants to purchase 5lac shares of Reliance from the market (not a block deal). If the portfolio manager calls up his broker for the same, this information will leak in a matter of minutes. Everyone will buy shares of Reliance for front-running and sell it to Morgan Stanley as the stock picks momentum.
DMA prevents this by allowing Morgan Stanley to route their order directly into NSE order-book using the brokers account (with due margin requirements).

DMA activities can be accomplished using AT, but AT does not require DMA.
As for program trading, the Indian markets are too small and if many players started program trading it would hit market-wide limits pretty soon.
SBI is one of the biggest arbitrage players in Nifty stocks - they employ program trading to a small extent.

The nice thing about Interactive Brokers is the sophisticated order types.
They offer bracket orders (even before a trade is initiated), conditional orders, time based orders etc.
For example, let us say, you want to buy Nifty on a breakout of 3300, with a target of 3340 and a stop-loss of 3280. It is nearly impossible to define this setup upfront with current brokers because they do not have features like bracket orders, Order Cancels Order (OCO) etc.
So, you enter a buy-stop order at 3300. Once the trade is executed, you now have to enter two orders - sell at 3340 and sell-stop at 3280. Your margin requirement has unnecessarily increased, and you are responsible for canceling the order (limit or stop) that did not get triggered.

I think this is where most traders will Interactive Brokers TWS platform extremely powerful.

Also, hopefully, Indian brokers will wake up from their sleep and offer more advanced features.

Adheer does those bracket order feature in IB cancel your stop loss order automatically ? taking example of above, if my stop buy order didnt hit at 3300, then should IB take care of my stop loss order of 3280?
I think this is the only feature missing in brokers terminal here
Thanks.

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Originally Posted by alex

Adheer does those bracket order feature in IB cancel your stop loss order automatically ? taking example of above, if my stop buy order didnt hit at 3300, then should IB take care of my stop loss order of 3280? I think this is the only feature missing in brokers terminal here Thanks.

Yes. Actually, it is even more advanced.

The IB TWS platform does not send the 3280 (S/L) and 3340 (T/P) orders unless the 3300 (buy-stop) order has been executed. So, your margin is blocked only for the initial entry position (buy-stop @ 3300).
Once 3300 buy-stop is executed, the bracket order(OCO) is sent to the exchange. Since this is an exit order for the open position, additional margin is not required.
Now, if 3340 sell order gets executed, TWS will automatically cancel the 3280 pending order.

However, if you tried it manually with Indian brokerages, you will need additional margin to enter the bracket order because NSE thinks you might end up with 2 lots (which is possible in case of a whipsaw)

This has been my experience trading with TWS on US and European exchanges.
I do not think NSE supports bracket orders, so even if IB offers it, they best they can do is simulate it, because the underlying exchange does not offer those capabilities.

Even beautiful is the ability to group multiple OCO orders.
Let us say, I expect a long break in the market.
So, I decide to go long ABC above Rs 100, or DEF above Rs 200 or XYZ above Rs 300. But I want to take a position in only one of the three.
If you tried this manually, you must sit in front of the terminal, enter 3 buy-stop orders - thus using margin in 3 stocks. Then, when the first order gets executed, you must cancel the other two.

However, with TWS, you can group all the 3 buy-stop orders into 1 OCO pair. So, when the first one gets executed, the rest two are automatically canceled. Unless the prices are too close to execution, it recognizes that only one will get executed and therefore blocks only the highest margin of the three (instead of margin on all three).

Originally Posted by alex

Adheer does those bracket order feature in IB cancel your stop loss order automatically ? taking example of above, if my stop buy order didnt hit at 3300, then should IB take care of my stop loss order of 3280? I think this is the only feature missing in brokers terminal here Thanks.

Another feature consistently missing is Trailing Stops (fixed amount or %). If TWS is running, the trailing stop is automatically calculated and sent to the exchange.

Let us say I have the following trading rules.
1) I go long on breakout of 3300.
2) I want to set an initial stop-loss of 3280.
3) If the price moves to 3310, I want to move the stop to break-even 3302.
4) And then after that, I want to follow it with a trailing stop of 1%.
5) If the price moves to 3350 I want to close the position.
6) Lastly, if my position is not closed by 3.15pm, I want to exit it by 3.15pm.

I can configure it in TWS (without programming) platform using their terminal - and do not have to sit in front of my terminal monitoring the trade.

So all in all, it frees up a trader from mundane trade management tasks, and gives more time to focus on trade setups etc.
I have been using it for last 7 years and it has been a fantastic platform.

And let's not forget - DOM based trading, Advanced Option Analysis, Choice of multiple front-ends ( www.buttontrader.com for eg), ability to trade directly from charts, Risk Management modules, Trade logs etc etc.

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