Rule-based investing and trading · Indian markets
Algo simply means rules, followed every time. Rules keep you consistent; automation keeps emotion out of the decision. Here I share backtests, lessons and real-life experience from my own fully automated setup, including what didn't work. New to algo? Start here. Want to explore investing and trading strategies? See the strategies.
Rules, backtest, risks, pros & cons, and our verdict.
Open Strategies → LandminesThe traps that make bad strategies look brilliant, and how to spot them.
Open Landmines → LaunchpadBuild it step by step, and learn from real failures before they cost you.
Open Launchpad →Sharpe ratios and return-to-drawdown ratios don't change with position size. On a strategy that makes a few points a trade, they can look excellent while the profit in rupees is too small to cover the real costs of trading.
· 4 min read
Leaving out the 'event days' after you have seen which days hurt makes any backtest look safer. A fair blocklist uses only dates that were announced in advance, and even then it can get lucky.
· 4 min read
Holding the NIFTY 50 only while its 20-day EMA was above its 50-day EMA, and keeping the money in a liquid fund the rest of the time (assumed to earn 6% a year), made 9.9% a year over 18½ years against 7.7% for buying and holding the index, with a worst fall of −25% instead of −60%. The smaller drawdown held from every start date, with returns comparable to buy and hold.
· 12 min read
Selling far out-of-the-money NIFTY weekly options four sessions before expiry won 83% of its trades over five years. But the average loss was nearly four times the average win, one weekend gap in April 2025 cost about 40% of the five-year profit, and after costs it earned about 4% a year on capital.
· 9 min read
Selling the NIFTY at-the-money straddle at 9:20 am on every weekly expiry, with a 30% stop on the pair, made a small profit over five years after costs, about 6.6% a year on capital. But it lost on six trades in ten, the result is not distinguishable from luck, and 2022 and 2023 made almost nothing.
· 8 min read
Selling a ₹30 SENSEX call and put the day before expiry and holding them overnight won 90% of 156 trades over three years, comfortably beyond luck, and survived double costs. But losses are uncapped and there is no stop: a 5% gap on a calm week would cost about 1.7 years of average profit, and the sample never contained one.
· 10 min read