Algo Trading Basics — Step-by-Step Guide & Transcript

[00:02] ? Well, from today we are starting a series. In this series, in the next 10 days i.e. in the next 10 videos, you will automatically learn algo trading. You can automatically learn algo trading. You can

[00:18] Look there are 10 videos. Not much. There strategies or anyone else's strategies.

[00:37] telling you the truth, you will enjoy it so much because this type of content is not available on the internet. Look, it may be a little boring because you people are still used to just buying and selling. You just tell me. Please look at some indicator and tell me that I should buy from here.

[00:50] I will sell it from here. But what you are going to learn now is the next level learn now is the next level knowledge. Even if we charge you for this knowledge. Suppose there are some charges for the knowledge that you are going to get,

[01:02] 10,000, 50,000, 1 lakh, 2 lakh, then if people come after paying the charges then they are more serious. I know that if I am uploading videos on YouTube, I will not get much serious audience. But still I think that if a thousand people watch it, then 100 of them will be serious.

[01:16] that if a thousand people watch it, then 100 of them will be serious. For those 100 people, this is knowledge worth lakhs of rupees and you will not get it even by searching on the internet. So please watch all the videos of this series till the end. Today we have an expert with us whose name is

[01:31] Kushal Jain who is the CEO and Founder of Aapke Mirror Pip. So today, whatever he will teach you with his experience, he is going to give you the knowledge which hardly 1% of the people have.

[01:43] So let's start today's series with the one and only Mr. Kushal Jain. Thank you so much Pushkar ji for inviting me here. And in this series on algo trading, I will try to ensure that even our viewers who have

[01:57] no coding knowledge will be able to backtest and implement their desired strategies on their preferred crypto exchanges like DeltaShark Coin Switch in less than two minutes. Correct. So now when we talk about algo trading,

[02:11] people have some knowledge about algo trading because recently NSC circulars have also come. What is Algo Trading? A little awareness has also been created. But still there is a hesitation among people that will I be able to do it

[02:24] ? Does it require coding knowledge ? Do I have to keep the internet on all the time ? What happens if my laptop is switched off ? So there are many such questions in people's minds about which people do not have clarity. So because of which people do a little

[02:38] research. Then I think, oh no, let me sit in front of the system. I plot the trend lines myself. I myself set the indicators and I myself take the entry and exit. But what is the problem in this that

[02:51] sitting in front of the screen for hours is possible for the Indian market. But there will be some fatigue somewhere due to Crypto 247 Market. Second, many times it happens that we miss our turn at night or at such times when either we are sleeping or we are travelling

[03:05] or we are in our business meetings or our job conferences or we are which many times we miss potential good entries. And many times we are not even able to exit on time. All these things are going to be solved in this series.

[03:20] Ok? So you thought of a strategy, you implemented it. Just after that you close your laptop. Go on vacation. Doesn't matter. You will not miss a single entry or exit after the end of this series.

[03:34] What is the matter? Yes. Some news comes. You have taken the trade. People wake up in the morning and see that my account has been liquidated. On the contrary, you could have saved your account

[03:47] correct. And you could sit in the right direction. You had bought Bitcoin. But Bitcoin fell suddenly. So if it continues to fall then your position would be immediately cut with a small SL

[04:00] and you would sit in reverse. And if he was entering then you could have know algo trading then but now you will learn from the very basics. I am also very interested and honestly speaking Kushal is definitely my friend. But what he is going to

[04:14] teach now. I had never learned with so much attention myself as I am about to learn today. So I am also very excited. Right? So now let's address it first. What exactly is algo trading ? It's simple. Whatever strategy you have in your mind,

[04:28] if you explain that strategy to the machine and the machine understands that strategy and the machine makes entry or exit on your behalf, then that is what we will call algo trading.

[04:40] It can be a very simple strategy and it can be a very complex strategy. Like if you look at my screen, here it is a super trend indicator. Now on my screen you can see Buy, Exit, Buy, Exit, Long,

[04:54] Short on Super Trend. Because we have run a postscript here on TradingView. But if you go to indicators and search for super trend or any indicator for that matter and plot it, then

[05:07] this indicator of Trading View gets plotted here. that this is very correct on the one hour chart because here it generated a buy and gave a huge rally in the market. When there was a loss, it was a very small loss. When there is

[05:20] Then a short signal came here. So if you like seeing this visually then you will think that I will start trading this strategy manually. But what problem will arise in that now ? Let us look at it a little bit and understand it so that

[05:36] trading is important in their life. Like Super Trend gave a buy from here. from here Super Trend gave a buy, then it was 6:30 in the night. Would I have been in

[05:48] front of the system at 6:30 to take a trade? The answer can be yes and a no. Similarly, here when Super Trend gave short, it was 7:30 in the morning. Should I cut the trade based on this super trend at 7:30? I don't know. Maybe I would have been sleeping.

[06:03] Similarly, when the exit came back after the bye, it was again 6:30 in the morning the next day. So what I do is I come back the next day at 6:30 AM and this is a 1 hour chart. So this entry of yours that came in the morning,

[06:17] one minute and this is at 6:30 in the evening. This is at 6:30 in the evening. next day's exit. No, not the next day, you reached the day after that. No, not the next day, you reached the day after that.

[06:29] ? Correct. And your exit is on the fourth day at 7:30 am. When you might have been sleeping because for the last three-four days you felt that the exit has not come yet. So there is no need to sit in front of the system right now.

[06:44] Because of which many people have bad results even after having a good strategy. Because he has a good strategy. But he did not manage to take every entry and every exit. for example, that is, it is shown to you through an indicator that even if you follow this indicator,

[07:00] you will not be able to do it 100% because you are not available at that time. Right now, whatever strategy you can think of, you use EMA, you use RSI. You use price action. Do not use indicators.

[07:14] Correct. So for example, let's say I took a trend line for price action. For example, I left a trend line like this and the market consolidated here. Now let me assume that it is 2:30, 3:4:30, 5:00 in the night on 15th August. And

[07:31] and I thought that I don't know when the breakout of the trend line will come. Now it's 1:30 in the night, I go to sleep. Now suppose you fell asleep after plotting the trend line. You had such confidence that this is a very crucial trend line.

[07:45] It has resisted at multiple places. So I definitely have to buy it on its breakout. So when it broke out here at 12:00 in the night, you probably weren't even on the screen at that time. So perhaps many such opportunities will be missed even by your price action based approach.

[08:01] And this also happens. Many people I interact with. They are able to take price action based trades only when they sit on the system for two-four hours. also shut down their trading and leave.

[08:14] But here because of automation, if I plot the trend line once, I will teach you in the coming classes, how can you leave it now. So whenever there is a breakout in a day or two, the trade will automatically be placed in our account. And we

[08:27] can leave it as it is already placed. You can leave the Target SL in Points Percentage Dollars all together by placing the order. You You can put trailing SL here and leave it in the pin, we will also learn that. But normal

[08:40] for beginners you can have a target stop loss with the entry. Ok? So now how does algo trading work ? Let me explain this to you. So there are four key components for an algo trading platform. Ok? First of all, to do

[08:55] algo trading, data should come into the machine. Now the best thing about Trading View is that Trading View is giving me tick by tick data on this platform itself. So if I feed the data to the machine, then the

[09:08] machine will compute on that data whether the condition of the entry is becoming true or false. By default, assume the entry condition will be false. condition will be false.

[09:23] take that trigger out of TradingView into our own risk management systems and from the risk management system it will then go to the exchange. So whether it is a small retail trader or a very big institution like Jain Street.

[09:38] Correct. If you want to do algo trading, whether for a retail trader like me or for an institution like Jane Street, then these four components are very important for doing algo trading. The first

[09:50] live data. Live data can be given to you by your broker or given to you by your exchange. [MUSIC] We have to take that data. We have to run our logic on that data. Like my logic could be super trend, moving average, breakout of trend line.

[10:06] So I have to match this logic with live data and see where entry or exit is being made due to my logic. As soon as that logic is true, the entry will be made in the automation engine on the basis of that logic. Now the engine also has a risk

[10:21] management system. In the risk management system, the engine may check that the entry has to be sent but do I have that much money? Am I on the right mode? Is the target SL set correctly or out of range ? So the automation engine validates all these things.

[10:36] And when all the checks are passed then the order goes to our favorite Indian broker or crypto exchange or any exchange in the world. That is how every algo trading platform in the world works.

[10:51] institution. So for example, your live data Correct. Ok? You just gave your code on TradingView. After that the automation engine is on your mirror view.

[11:05] Correct. Which will execute your trade and You are absolutely right. So exactly how it looks like. So the live data came to TradingView. We created a logic

[11:18] in the script using No Code Builder on TradingView itself. Now the command from the Pine script will come to our mirror pipe. Mirror Pip has its own RMS that will send your order to Delta Sharpe Crypto. Now you will feel that so much time will be taken in all these things because live data

[11:32] comes, strategy is run on it, then from there the order goes to the trading mirror pip, then the mirror p is sending the delta, but you see, the socket streaming of no code automation on live data will happen in 100 milliseconds, 1 second has 1000 milliseconds,

[11:47] so 0.1 second means when we blink, it takes 0.2 seconds, so before blinking it is over and it sends the trigger to the mirror pip. TradingView now has

[11:59] multiple servers. Some servers are in Germany, some in the US, some in other parts of the world. Mirror Pip has its server in Mumbai. So the signal from US or Germany will travel to Mumbai. Then Delta or Shark or Coin Switch all have

[12:16] servers in Tokyo, Japan. So from there the signal will go to Japan server and the trades will be executed there. And all this happens within 300 milliseconds. Meaning, you blinked and opened your eyes and your order was placed. It is

[12:32] Meaning your order is placed in less than a second. trading. In manual trading you have only two types of orders. One is bye and one is short. Like I

[12:47] take you to any broker exchange. So for reference I came to Delta Exchange. Now when you go to take a trade here, you will see that One is long and one is short. So if you

[13:02] feel the market is bullish then you will buy by clicking on the long button. And if you feel the market is bearish, you will initiate a position by clicking on the short button. But if you want to square off the long position then you will press the short button. And if you want to

[13:16] square off the short position, you will press the long button. So in manual trading, this long button has two use cases. Meaning, one use case is what is that long button doing? Fresh buy position is being initiated. The End Short button is

[13:33] initiating a fresh short position. But in manual trading the long button is also exiting the short.

[13:56] explain to a machine, we cannot explain to it in such a way that it can do two tasks with one function. You have to treat the machine as if it is a child and it can make mistakes. So the more clarity you feed it, the better it is. So

[14:11] better it is. So in algo trading there are four commands instead of buy or sell. And that is buy, sell, sell, short and cover.

[14:24] Many people who were doing manual trading thought that sell and short were the same, that sell means selling and short means selling. But when we come to algo trading, sell and short are two completely different things.

[14:38] Ok? Ok? The buy command is the same in manual trading and algo trading. Its only job is to take fresh long positions. The job is to take fresh long positions. The sell command has only one function and that is to

[14:53] sell command has only one function and that is to exit the long position. The sell command in the algo cannot create a fresh short position. If you already have a long position, you can simply exit it.

[15:07] So exit long position. And in this way you must have understood the meaning of short that it has only one function. That is it should that it has only one function. That is it should take a fresh short position

[15:28] and cover is just one thing. That is exit short position. we can call buy and short as entry order types. Correct. Sell ​​and Cover are called

[15:42] exit order types. So there are four orders in the algo. There are two entry order types. There are two exit order types. So this is how we have to remember. Buy and short will always work for entry. Cells and cover will always come in handy for exits. Now let's go back to

[15:57] Delta. Now you will say that then why is it not like this here? Manually you can you look at their order history or their order book, they are also

[16:09] maintaining four different order types. Let's look into this order history. See what he has written here? Open Buy, Close Sell, Close Buy and Close Sell. So open buy is a different order type. Open sale is a separate order type. Right? And

[16:32] Buy and Close Sell are two different order types. Right? So even though we are seeing two order types manually, but if they also have to manage their orders, for their own sanity also they will always maintain four order types. Not only this, any exchange in the world,

[16:46] also it's Shark Exchange, Delta Exchange and [music] any global exchange for that matter. So four order types is pretty much mandatory. So we learned this. Now what we will do is take some trades based on these orders that we have learned

[17:02] mirror. Okay let's go. So to do algo trading, now I need the ability that my platform or my algo can place orders on this exchange or fire orders to this exchange. So for this, I will have to give approval

[17:17] in my account in this exchange that if one of my algo orders comes, then you give me permission to punch that order in this account. And that is Ok? Ok? So I take an account. This is

[17:32] my main account where trading is going on. I take one and one sub account. And in this sub account I will show you the trades today. Correct. Ok? So what do we do now?

[17:46] API is created in this. So to create the API, I will go to this profile. I'll I will go to this profile. I'll go to API Keys and I can name it anything. Like testing demos. Ok

[17:58] ? And I have to give white list IP. That means, white list IP is such an IP through which the exchange will approve the order only if it comes. Suppose my account gets hacked and some random person

[18:15] wants to send orders using my key and secret, then the IP of his machine will be something else. Now, to prevent any random person from sending me an order from his machine and causing me any loss, we restrict our we restrict our IP, our API key and the secret along with the IP.

[18:27] So mirrorp is a platform which has a separate IP. So we will go to merp.com and it's a free platform. You can sign up here. So as soon as I log in I will get an option Connect Broker. So as soon as I click on Connect Broker

[18:40] I have multiple options available. So let us say I will select Delta Exchange. Now I have to enter my key secret in Delta Exchange. And here is the IP of Mirror Pep. This is the whitelisted IP. We will copy this.

[18:53] is the whitelisted IP. We will copy this. We will paste this IP here. We will select the box containing End Trading. That means, this API that I am going to create, I am giving it permission to place trades on my behalf.

[19:05] And now as soon as I click on Create API , I will get an email verification code , I will get an email verification code and 2FA.

[19:17] , this key and secret is very confidential. Do not share these keys and secrets with anyone. Because if someone has this secret and if by chance they will be able to place orders on your behalf.

[19:32] However, they will not be able to withdraw your money. It can just cause you losses in your trading. There are able to withdraw your money. It can just cause you losses in your trading. There are Copied it. We put this key in the mirror pipe here. Now I have taken the secret

[19:47] in the mirror pipe here. Now I have taken the secret as it is. And copied it here. And here I clicked on the connect button. And now you will see my Delta account is connected. The balance in my Delta account started

[20:00] showing here in the mirror pip. This means the connection of the mirror pip with the delta has been established. Mirror Pip now has all the rights that allow Mirror Pip to place orders on your Delta Exchange.

[20:15] To just showcase you. Let's take a small demo. We will go to the watch list. I add a symbol Mirror Pip in BTC USD and let us say I want to trade two lots so I wrote quantity two.

[20:29] I will leave the target and SL empty for now and save them. So look here, two quantities of BTC have come into my watch list. Now you'll see if I go back to my futures in Delta, there are no positions standing.

[20:42] Correct. If I press this buy button from here then the order has come in Delta. Correct. So Mirror Pip, i.e. a third party platform, now has the right to punch orders on your behalf.

[20:57] For now, I demonstrated a semi- automated method, that is, I manually punched the order myself. But in the coming class, I will learn all those things so that I don't have to punch and the order is still passed automatically. in the coming class, I will learn all those things so that I don't have to punch and the order is still passed automatically.

[21:12] actual power of automation. So if you guys have come to the video till now then now it is important for you to understand some things here. First of all, you need to have you don't have a trading account yet. Meaning, I don't have an account on Delta Exchange.

[21:28] You can open an account on Delta Exchange or Share Exchange. You will find the links in the description pin comments. If you open an account, fill it up. You get two trading courses from us for free.

[21:41] And you will also get the link of Mirror Pip in the description pin comment. Sign up on Mirror Pip. Like Kushal Bhai connected you and showed you where to go. They told you that you have to

[21:59] give your name here. You can keep any name. whenever you go to connect to the trading account,

[22:12] So here you have to keep one thing in mind. He had entered the code of one of his authenticators. So if you do not know how it will happen then there is an app called Google Authenticator, you will have to download it and connect it, a code will come from Delta there,

[22:28] you will have to enter it again and again and it is necessary to enable trading otherwise the trade will not go through, so once you create your API and keep all these things connected to Mirror Pub, there are many leaders on Mirror Pub also. We will understand about these also. Like I also have

[22:41] trades here Pushkar Shark Trades. So all these things that are going on here are being automated. So you will be able to do all this only when you complete the process till now. So complete the process till now and

[22:56] ask many questions to Kushal. I will say it this way, suppose I have any one indicator. Bitcoin Pay Buy came. I want to buy 100 coins. Can it happen together ? So how can all this happen ? We will not just learn all this but will try it out.

[23:11] So you stay connected. You can like this video. People who did not know about algo trading till now are getting to learn from these videos. So please share these videos. Ok? And we'll see you in the next video. So this

[23:25] is a playlist. You will also find the link to this entire playlist on the end screen. If you are still watching this video after 2 years then things are relevant. So what do you do See you in the next video. If you have any questions,

[23:39] please ask in the comment box. Finally, let me ask you one more question. Please answer it in the comments. Kaushal said that you have to connect the API. Ok? See you in the next video. Till then share this

[23:55] video. Subscribe this channel. Click on the bell icon. You are self-made and Jai