The Algo Bench

Disclaimer

Thu, 08 Oct 2026 00:00:00 +0000

Please read this carefully. By using thealgobench.com, its newsletter and its social media channels (together, “The Algo Bench”), you agree to it.

Educational purpose only

Everything published by The Algo Bench, including articles, backtests, tearsheets, code, charts, videos and emails, is for educational and informational purposes only. It describes how systematic trading strategies can be designed, tested and evaluated.

Terms of Use

Sun, 11 Oct 2026 00:00:00 +0000

These Terms of Use (“Terms”) apply to thealgobench.com, its newsletter and related channels (“The Algo Bench”, “we”, “us”), operated by The Algo Bench, a proprietorship of Satish Nagda, Mumbai, India. By using The Algo Bench you agree to these Terms. If you don’t agree, please don’t use the site.

Privacy Policy

Sun, 11 Oct 2026 00:00:00 +0000

This policy explains how The Algo Bench, a proprietorship of Satish Nagda (“The Algo Bench”, “we”), handles personal data when you use thealgobench.com, our newsletter and related channels. We act as the Data Fiduciary under India’s Digital Personal Data Protection Act, 2023 (the “DPDP Act”).

About

Sat, 10 Oct 2026 00:00:00 +0000

I’m Satish Nagda, a Chartered Accountant. I spent more than 20 years in financial services, most of it inside India’s retail broking industry. In corporate roles, I grew from manager into C-suite roles, leading finance and business transformation.

I always felt lucky to be part of an industry that was bringing equities to Indian retail investors: something that, used well, can make a real, positive difference to people’s lives.

What is Algo?

Sat, 10 Oct 2026 00:00:00 +0000

Algo investing and trading means following a set of written rules, automatically, every time. The rules decide what to buy, when to sell and how much to hold. A computer then follows them exactly, without second thoughts.

That’s all it is. It doesn’t have to be fast, complicated or secretive.

"Order sent" — but the broker never took it

Fri, 09 Oct 2026 00:00:00 +0000

What went wrong

Our bot sent its usual alert: “order sent”. We relaxed. Later we found that the broker had rejected the order. The position the bot believed it had opened didn’t exist.

The bot was reporting what it had tried to do, not what had actually happened. It called the broker’s order API and announced success, without checking the broker’s reply.

Buying last year's losers: the NIFTY 500's worst performers kept losing

Fri, 09 Oct 2026 00:00:00 +0000

The idea

Buy what has fallen the most and wait for it to bounce back. It’s one of the most natural instincts in investing, and it has a respectable academic history: a famous 1985 study found that US stocks with the worst returns over the past three to five years went on to beat the market. Prices overshoot, the argument goes, so the most hated stocks become too cheap.

Lots or units? The same order, ten times the size

Fri, 09 Oct 2026 00:00:00 +0000

What went wrong

We run the same strategies across accounts at more than one broker. For a commodity future with a lot size of 10, our code sent an order with a quantity of 10. One broker placed 1 lot (10 units). The other placed 10 lots (100 units). Same code, same contract, same number: ten times the position.

Low volatility: hold the 30 calmest stocks in the NIFTY 500

Fri, 09 Oct 2026 00:00:00 +0000

The idea

The “low-volatility anomaly” is one of the best-documented puzzles in finance. Theory says riskier stocks should earn more, yet in many markets the calmest stocks have earned about as much as the market, or more, with much smaller falls. One common explanation: many investors chase exciting stocks and avoid dull ones, leaving the dull ones cheap.

The server ran out of memory in the middle of an order

Fri, 09 Oct 2026 00:00:00 +0000

What went wrong

Our bot runs on a small cloud server with well under 1 GB of memory. One morning, a few minutes after the open, several strategies fired in the same minute while a background job was also recording market data. Memory ran out, and the operating system’s out-of-memory killer stopped the bot instantly, with no error message and no chance to clean up.

How we score strategies

Thu, 08 Oct 2026 00:00:00 +0000

Every strategy carries three tags at the top: whether it is investing or trading, how many of our eight checks it passed, and its risk level. There is no star rating and no one-word verdict: the checks say what held up, the risk tag says what it would have felt like, and the write-up explains the rest.

Monthly momentum: hold the 15 strongest stocks until they fade

Thu, 08 Oct 2026 00:00:00 +0000

The idea

Momentum is one of the most persistent effects in markets: stocks that have risen strongly over the past several months tend to keep outperforming for a while. The classic way to use it is a rotation: own the strongest stocks, and swap them out as their strength fades.

Selling a weekly NIFTY OTM strangle: steady profits, uncapped risk

Thu, 08 Oct 2026 00:00:00 +0000

The idea

Most weekly NIFTY options expire worthless. A short strangle sells one call well above the index and one put well below it, collects both premiums, and profits if NIFTY stays between the two strikes until the options are closed or expire. The further away the strikes, the less premium you collect, but the less often the index reaches them.

Supertrend(10,2) on NIFTY: a simple trend-following system

Thu, 08 Oct 2026 00:00:00 +0000

The idea

Supertrend is one of the most popular trend indicators among traders: a line that sits below the price in an uptrend and above it in a downtrend, flipping when the price closes through it. Used as a complete system, you are always in the market: long while it points up, short while it points down, reversing at each flip.

Connors' Double Seven on NIFTY: underperformer even with a high win rate