Image Credit: Zerodha

Algo trading, commonly referred to as automated trading, over the recent past has gained a big following in Indian traders who can have their trades executed based on predefined rules. One of India's largest brokerage firms, Zerodha, provides quite robust platforms to facilitate this fast-growing trend. If you are looking at getting started with algo trading using Zerodha, this guide will take you through the available platforms, a simple tutorial, and the costs involved.

What is Algo Trading?

Algorithmic trading involves the use of computer programs and algorithms to do trading automatically. These algorithms are developed with definite criteria in terms of timing, price, and volume. The major benefit of algo trading is that it eliminates the emotional tendency of the trader. Hence facilitating faster and efficient execution of a trade.

Be it a gentleman trader or a start-up looking to build customized trading solutions, all of these are going to be incredibly powerful for Zerodha's API. This blog will walk you through the kinds of APIs provided at Zerodha, how you can get access to them, and some examples of their practical use.

What is Zerodha API?

Image: Streak Zerodha

Zerodha APIs provide a structured way to programmatically access most of the trading features available at Zerodha. Using the APIs, you'd be able to fetch live market data, place orders, manage your portfolio, and many more. Zerodha APIs let you write automated trading strategies, connect third-party tools, and write custom applications. All aligned with your trading goals.

Getting Started with the Zerodha API

Image: Streak Zerodha

To begin using the Zerodha Trading APIs, you should first acquire a Zerodha trading account. If you don't have a Zerodha account, you can simply open an account with Zerodha online, instantly. Assuming you already have a trading account, the following steps will guide you in using Zerodha APIs:.

Get Your Zerodha Client ID: It is required for API access. You will have to go through it during API setup.
Create an Account with Kite Connect: Head onto the Kite Connect Developer portal.
Sign up and create a Kite Connect developer account by using your registered email ID.
Create an App: Login to your Kite Connect account.
Click on the "Create App" button. Fill in the required details like App Name, Redirect URL, Zerodha Client ID, and a brief Description.
Click "Create." API Key and Secret: After your app is created, you will be given an API Key and Secret unique to you, through which you can start integrating the Zerodha APIs into your trading systems.

Types of Zerodha APIs:

Zerodha offers different types of APIs, each serving various sides of trading. The key APIs are summarized below.

Zerodha API for Algo Trading:

Overview:

These APIs aim to automate the trading strategies planned by the users. You can bring trading ideas into an executable algorithm and couple them with platforms like Amibroker or prepare your own open-end solution. However, you will need to create your technical indicators, as the Kite Connect API does not provide any predefined technical indicators.

Best for: Traders and developers who can write code to create algo trading systems. Full-fledged algo trading requires necessary exchange approvals.

Zerodha WebSocket API

Overview: WebSocket API will stream real-time live market data for more than 3,000 instruments across all exchanges. Realtime quote updates, order updates, and market depth information.

Best for: Traders and developers who want real-time data streaming for live market data analysis and trading.

Zerodha Historical Data API

Overview: The API will provide historical market data, which is essentially used for backtesting strategies in trading. The data would comprise open interest, high, low, close, volume, and open interest details across multiple instruments and time frames.

Cost: Rs. 2,000 per month as an add-on to Kite Connect.

Best For: Traders and developers working on backtesting and historical analysis.

Zerodha Publisher API:

Overview: This is an API that will give the ability to put trade execution buttons on your site or app. The user will be able to execute these trades right from the triggers without having to log in again on your Zerodha account.

Best For: Bloggers, financial advisors, website owners interested in incorporating trading capabilities on their site.

Cost: Free.

Zerodha Coin API:

Overview: The API is based on the BSE STAR MF platform and automates mutual fund investments using the Coin platform of Zerodha. You will be able to perform operations like SIP, placing or modifying orders, cancelling orders, and fetching order histories.

Best For: Investors who are maintaining their mutual fund portfolios with Zerodha.

Practical Scenarios of Using Zerodha APIs

The Zerodha APIs can be utilized under various circumstances to simplify a trade. Here are a few practical examples of the same:

Automating Stock Accumulation:

Suppose you want to accumulate a certain stock over time. You can use the Zerodha API to write a daily program for buying a certain amount of that stock within your price conditions. In this way, you would not have to sit and place orders every day manually.

With placing orders for multiple stocks, you can probably use the Margin Calculation API for measuring the required margins for the list of orders in a single go, which saves a lot of your time.

Zerodha API Support:

Zerodha does not offer support for any inquiries related to Kite API. They have a support forum managed by the community in which members can request support and suggest some tips for faster service. Kite Connect Forum is a very important resource for troubleshooting and getting developers' and traders' support.

To register in the forum:

Access the Kite Connect website and search for the option "Forum."

How to Begin Algo Trading on Zerodha: A Very Basic Tutorial

Getting started with algo trading using Zerodha is indeed quite easy, especially with platforms such as Streak and Tradelab. Here's a step-by-step guide that will help you begin:

Create a Zerodha Account:

If you do not have a Zerodha account, well, that would be the first thing to do-open an account online from their website.

Choose Your Algo Trading Platform:
Choose the platform depending on what you want: Algo trading.
Select Streak as the platform if you are a beginner; for those with coding knowledge, it's better to go with Tradelab and Amibroker.
Link Your Zerodha Account with the Platform:

Whichever platform you choose, link it to your Zerodha account. This is generally done by providing your Zerodha credentials within the user interface of the trading platform.

Tutorial: https://youtu.be/VUQ4zHOsW88

Costs Involved in Algo Trading with Zerodha

Algorithmic Trading with Zerodha. As with most services on Zerodha, the prices for algo trading are different depending on the platform you choose to use. Here are some of the typical prices you will incur:

Zerodha Brokerage Charges

Zerodha has a fixed pay of Rs. 20 for brokerage or 0.03% ( wherever is lower) on every executed order for an intraday trade. Zerodha imposes no brokerage charges on all equity delivery trades.

Platform Subscription Fees

Streak has various subscription plans, starting at Rs. 690 per month for the basic plan. The cost starts getting higher as the option is more advanced and, more importantly, as some of the limits on how many strategies you can deploy are increased.

Amibroker: One-time expense. Basic version starts at Rs. 20,000. Data feeds and Zerodha API Integration charges are extra.

You will most likely have to subscribe to some data feed service to get real-time market data into a platform like Amibroker. There are charges for this service: from Rs. 1,000 to Rs. 5,000 per month will vary, based on the provider and types of data needed.

The use of algo trading from Zerodha is a powerful way to help Indian traders in automating their trading strategies. You have lots of platforms at your service, thus there is something in store for everyone. The costs also come at a reasonable level, making algo trading accessible to traders.

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Currently Stratzy doesn't support Zerodha but the platform is integrated with multiple brokers like Angel One, Paytm Money, 5Paisa and many more. As a result, executing any trades turns out easy and smooth. You can basically have multiple platforms integrated and continue enjoy algo trading benefits without any hassles.

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