🔴 Building Indicator-Based Algos 101 with Tharun Sundar | 10th August, 5 PM | Tharun Sundar | Upstox

So you welcome to this uh live YouTube session where we are going to see how to build indicator based algoros from scratch. So a lot of people know also supports both time based and indicator based setups but a lot of people are aren't able to you know uh correctly express or give inputs of the strategy that they have in mind into algorithms. So in today's session we'll have a very beginner friendly uh you know indicator based algor sessions. So let's not wait uh waste any further time and let's jump right into it. So for people who are using algo for the first time who are getting to know about algo for the first time algo is upstock's native algo trading uh platform where we can build any kind of alos without writing a single line of code and we have access to both readym made alos that is we have close readym made algos that are cured by our experts and which are also exchange approved. On top of it, we can back test any strategy with close to 10 years of historical market data and automate them all in one platform. So, so before we start with you know uh building indicator based alos let's see the basic of why we should do a back test. Uh a lot of people might know about back test but few few people may not. So I'm explaining back test for those. So back test is nothing but let's say you have a trade idea or trade logic in your mind but the actual uh let's say trade metrics what is the actual win rate how much uh you know max loss or max profit that trade could cost me or gain me and what is the average profit or average loss that I can expect so all those let's say without back testing it's like shooting in the dark it can be only tested with a real capital for example let's take a friend of mine comes to me and says uh if you if When if you buy a call option that is a premium year 200 call option every time the nifty digs about R1 you will for sure guarantee 90% of the time make 20 premium points that is gain 20 premium points my friend says this now I have two options either trade based on what is said without you know referring to any historical data or anything and then find out whether the strategy works out or not you know after a set of profits and losses The smart thing to do is actually run the spray logic or train setup through back testing and let's see what the data has to say. So let's come to the back test section of the words and here right uh right in the first we can select that back test duration as I told we have close to 10 years of past market data and algorithms. So let's do something. Let's back test something from 2023 and I'm back testing it from 2023 in Jan till uh let's say let's go with the last completed month that is July and I'm naming this run that is this strategy R1 breakout and here I'm choosing what instrument I want and in algo we have all the major indices and depos stocks. So I'll select nifty here and I want my uh you know conditions to work on the nifty spot. So I'm choosing equity index and this is where it's been interesting. We have come to the indicators tab and Algo is one of the very few platforms or I think the only platform where users can find 85 plus technical indicators and analytical tools right inside the platform that is built in the platform. Most of the algo trading platforms that are available in the market today either require you to uh generate even a basic uh indicator signal from third party uh views apps that is let's say uh from trading view or charting or something like that but in also we have option for both that is we can use the inbuilt indicators itself or if you have any uh if you're following any custom indicator in you know trading view or you have finecoded your own setup. You can generate alerts from it and based on the alerts you can execute and automate the tradition algorith. So here we have close to 85 plus technical anal tech technical indicators and analytical tools you know starting from your basic super trend RSI EMA VWAP and we have let's say indicators some uh features build as indicators let's say range breakout so for range breakout I can just simply mention the range which I want to you know create and let's say I'm giving from 9:15 to 10:15 the first one and based on this also values of that particular range. So we can create a range break just like that. So now coming back to our uh thing I'm I'm checking with pivot points now and after you know uh setting up your required indicators let's come to the entry event situation the entry event section and here I'll select the edit option and and you know giving your inputs or let's say automating a strategy in also it's very simple As I told it's a no code algo trading platform. We uh need not write any line of code to automate your setup. We are just automating it in plain English. So I'm saying that my current close that is the current 5 minute candles close should have crossed above the pivot point R1. So that is my entry condition. So I have my required indicators here and after you know setting up them in the indicator section I'm configuring them here in the entry tab. So now I've given my entry condition now I should input the alg to trade. So after the price closes above R1, I'm instructing it to trade a premium near 200 call option. And our aim here is to capture 20 points. And let's say stop loss I can keep whenever the price crosses below R1. It could be the very next candle or let's say it could be five candles or 10 candles from the breakout candle. So whenever the price comes below R1 I'm exiting. So this is the setup my friend told me that if you trade this whenever it happens with this uh parameters there is a 90% win rate for you. So we going to check whether the same thing holds with close to four years of past market data. So after setting all this I can uh you know configure the transaction targets and D targets for this particular setup I don't have any and let's say let's allow maximum of two transactions per let's say for start let's go with one and then based on so after configuring all this I have to simply click on run now also will run this trade logic for trade idea through the past four years of market data and give me a very comprehensive report. So here we have it right on top I have my gross result whether the strategy is gross profitable or gross loss and I have my back test time period and here I have my equity curve and an parameters between below them. So my friend told it has a 90% win rate for example but data shows it has only let's say 49.5% win rate round it up let's say 50% win rate and this strategy over the let's say last four years of time has had a draw down of that is max draw down of 26,500 which had happened over 54 trading days which is let's say more than 2 and a half months close to 3 months in calendar months and we have our average profit, average loss, max profit, max loss and how the strategy is performed you know uh day wise, year wise and month wise and the best part in also is data says I have 396 transactions for this exact entry condition and I have access to every single increase and exits. Let's say if I wanted to see what happened uh say 3 years back. Let's go to August. Let's say August 9. Let's say exactly 3 years back. And we have traded a 19,450 call option. And this has happened at the towards the very end of the market section. And we can see uh this is closed due to the exit time exit criteria. And if you want to see what happened on let's say October 27 the hour breakout happened as early as 9:35 and let's say within some 15 20 minutes we hit the target. So like this I have access to all the 396 transactions and I can also download them download all this data as CSV and use it include or charge DPD for further analysis. So I think now you guys would have understood why we are back testing right that is if I had just trusted my friend's words and say and you know uh trade at the R1 breakout every single time I would have you know wanted a 90% uh breakout rate sorry win rate and let's say I would have thought maximum you can lose is say what 20 30 points maybe but a simple back test shows me that the win rate is just close to 50%. And I should expect a draw down that is close to 26 27,000. And moreover, the draw down can last more than 54 trading days. And there is a possibility that a max loss of more than 4,900. Let's say close to 5,000 rupees can happen in one single transaction. All of this I wouldn't know unless I trade with my real money. Or I could do a simple back test and find out what the major metrics are. The reason to to do a back test here is to have a general understanding about the strategy. Now what could the general win rate trade be know how what can I expect as a draw down and what will be the draw down time frame and on an average per trade how much can I expect let's say simple average terms an average lo of,242 and an average loss of,000 rupees. So now when I trade this I have my expectations set right that is even you know out of 10 trades I'm losing four trades I'll be okay because the historical win rate is just close to 50% and it's kind of normal for this strategy and say if I lose 1,200 rupees in one trade I'll be okay with it because I know the max loss can go up to 4,500 as opposed to trading this without knowing anything just you know based on someone's words or let's your own intuition you will find out all of this by costing your real capital. So that's the reason we should do a back test and find out whether the strategy will actually suit us and what is this strategy actually like and whether I can trade it across a different market condition. So that's the simple reason why we are doing a balance. Now coming to indicator based algo creation as I told Algo is one of the few platforms that have inbuilt indicator setups and no other platform has let's say more than 85 plus indicators and technical tools built in and on top of that we have trading external signal alerts also. So now let's try to build simple uh strategies with you know indicators that people use in real life or not or on a day-to-day basis. So let's start with in nifty and let's back test the setup for last one year. Here we are going to use three simple indicators that is three common indicators. One is super trend, second one is RSI, third one is EMA exponential moving average. So I'll name this strategy super trend RSI and EMA. So first thing is let's add all this indicators first. So I should come to the indicator section. Click on the add indicators tab. And here I have a simple moving average already loaded in. To change the indicator I have to click on click here. And from here I can select from all the available indicators. First I'll be selecting a super trend. And as you guys can notice all the indicators are customizable. Actually it's not like I have one fixed 10 2 10 3 indicator. So this is super trend. I have to grade only with that. Here I can customize the time right from 1 minute to 1 hour. I can change the period. I can change the ATM multiplier. Let's say uh here I want a 10 comma 2.3 super trend and indicator is on 5 minutes. I can also change my chart type whether I want it on normal candlestick whether I want it I can actually open interesting volume chart also outside this next indicator I'm going to add is RSI so similar with the RSI I can change my PD I can change you know uh see and choose from the all the different time frames that is available And next one is the exponential moving average. And let's change the name to let's see let's go with higher uh period moving average. Let's go with EMA 50. This is the 50 period exponential moving average. And I have kept every indicator in the five minute time frame and I have you know made a customization to the super trend. So after this we're going to see how to input this. So first let's come to the entry section and start with edit. And here I can add my post condition. As I told building strategies and also is very simple and we don't require even a single line of code. We can just build it like you know current close is above super trend. It's as simple as that. And here I'm what I'm doing is I'm giving the add condition option. So the thing with also is I can give multiple indicators and multiple combination of indicator combinations in one single entry or exit point. So here I'm saying my current low should be above super trend and at the same time the RSI value the 5 minute RSI value should be above 50 and I'm also saying that the 5 minute candle close I mean should be above the 50 period or EMA. So this is my entry condition and as you can see I have an condition in between all that is current close over super trend and RSA above 50 and and current EMA 50. So in one particular five minute candle close all of this value should have been met simultaneously. Let's say current is super trend and current EMA but if RSI is just 48 or even 49 just one point short we won't take the trade. for given or uncondition every single condition that's given here should match simultaneously and for exit let's try it with super trend I want my exit to happen as soon as my 5 minute you know super trend sorry my five minute current close comes below the super trend comes and closes below the super trend And when this happens I want to trade say a spot based ITM3 call option in the money three call option and let's leave this open first that is I'm not going to give any fix at the stop loss or take profit all the entries and exits based on this and let's back test this for the last one and I'm giving two max transactions for that is I'm allowing the same entry condition to be traded twice let's say uh at 9:30 this condition appears I'm taking a trade the first trade ends up in either profit or loss again let's say at 11:30 or 12:30 for a second time the same condition appears in the market So I'm giving room for two max transactions already. So when all the configuration is done, I simply have to click run and also will run this uh trade logic through past one year and tell me the results. So I thought this would be a good strategy because or at least I would be gross profitable but data says otherwise I have a 40% win rate and my average profit is close to 3,000 average loss is close to 3,100 and I have a huge draw down that is an 80,000 draw down over 71 trading days and as you can see the months which are bullish the strategy has worked out good but let's say this year 2026 except for one month this has worked out good. So one more thing is the strategy that is working in let's say one particular a year has no compulsion to work in the next year. So don't you know place too much confidence on very uh past historic datas. the strategy's performance is consistent across all years then it's okay. But if it's uh performing well in one year and not performing during another year then we should be cautious. So this is how you can input a three indicator setup in alerts. And for the people who are watching it live, uh can you guys tell me how many of you guys have already been using also and how how many of you guys are you know getting to know about algo for the first time. If you have any queries uh do put it in the YouTube live. Your questions will get answered there and there. Now let's try to automate a trend based credit spread. So what I mean by trend based credit spread. So here here also saying this is an indicator based setup but I'm going to trade a spread version instead of a buying version and indicators we're going to use is pretty simple on a super trend. Another one is let's say points and let's back test this over let's say last four years or five five years let's start with 2022 this is close to 4 and a half minutes So this strategy is a trend following credit spread. So how to create a trend following strategy with indicators and algor is very simple. We just need two indicators here. One is we have a current candle by default that is another one is a super trend a standard 10 comma 2 super trend and the 5 minute time frame. Next one is the pivot points. So after this let's come to the entry section. And the conditions I'm going to give here is very simple. That is first one let's say for uh let's say let's create this for the uptrend when the markets are bullish. So I'm giving the current close should be above the super trend. Second condition is the current close also should be above the R1 range. So this is my entry condition. Except condition also trend following. So current close crosses below super trend. So when this happens and let's say I want to add one more filter that I want on me to take after 920 or so here what I'll do is I'll come to the add indicator section sorry the increment section click on add condition and I'll add the time filter so I'll give time of 30 is above 920 20. So I'm avoiding the very first candle and I'm starting to accept trad. So after the entry exit conditions are uh you know configured here I'm configuring a credit spread. So this is a bull strategy. So I'm going to sell another money put and buy a farm put for hedging and in the leg side I'm not going to have any stop loss or take profit as I told entry indexes are based only on this one the entry exit condition there is no uh let's say fixed stop loss or take profit values for this particular strategy and these type strategies are called open target strategies. So so and here my max transaction body limit is two and I want my trades to close at 1510 XL. So the trade during time frame can also be adjusted. So let's see how this comes. So this is the result we have got over the last let's say four four and a half years and we have a vend that is close to 50%. and draw down it's close to 30,000 and over 50 trading gs and my max profit and max losers are here also and here I can see how the strategy has performed across multiple time frame let's say in 2025 it does it seem to perform good but not so much good in the first three months of 2020 26 and I can also see individual transaction as I So we have automated a credit score but have you guys noticed I've only given it for the bull trend that is when markets are bullish. What if I told I can automate both bullish and bearish strategies or bearish conditions inside one single strategy. So I've given this trend following credit spread but I haven't specified which string it is. Reason is I can add two different conditions that is one bullish and one bearish inside the same strategy. So here what I'm going to do is as the setup is very similar I'm just going to clone this use the clone case option. So case one will have the bullish conditions and case two now will have the bearish condition. So what I have to do is simple. I have to click on edit. Change the current close is above super trend to below super trend and change the current close is what is this above R1 to below S1. And for exit simple current close process above super and here I have to change it to call and call by. So just like that I've created bullish and bearish scenarios inside one single strategy. This is how easy it is to automate back test and execute any algorate in algo words. It's like giving commands in plain English that is currently super run time of 37 920. So now let's test let's you know give uh same two transactions. I think that's enough. Now let's test the same thing. The results have improved but the metrics barely stay the same and we can see the first three minutes which were you know previously in loss now it has covered so we're covering for both the situations here if I have to see how the case to alone how it performs I can click on the filter case option and see how the case to alone performs. And again as these two are mutually exclusive strategies either I mean at one particular time either case one will be active or case 2 will be active. We can run this with the same capital also. And this is how easy does automate a trend following credit spread in algorithms and let's make some edits to this. Let's see instead of you know let's trade it when the or pivot point crossover happens. So instead of uh trading it at when the current loss is below already the pivot points is below I mean the price is below pivot point S1 I'm trading it when the crossover happens cross above R1 and crosses below S1. We have made a simple change and let's see how this one works out. And we can see the results have fallen dramatically and most of let's say 2022 2023 and 2024 they have been slightly flat. And only let's say after 2020 five the graph has started to pick up Trying to keep it. And regarding the trading view back test uh question using the external signal feature that is the this external signal picture we cannot do back test we can only automate our tra based on the signals and how to do it's a very simple process that is we have this whole setup here itself but simply uh you can choose your vendor that is trading your charting and click on a post back URL and you can you guys can copy this. Save this and paste it in the indicator tab that is the indicator cell tab and after pasting it there can come and configure your external signal is true. So whenever that particular trading indicators generates an alert here I can trade it. So it's as simple as that. But we cannot do back testing with this. We can only uh do you know automatic trades with this. and if you guys have any further questions do put it in the YouTube live chat and also do put your algo experience that that is you know whether you guys are using algo for the first time or if you are the previous user what is the one you like best about what I do. And now finally let's try and build a multi-indicator set that is let's say more than three and four indicators. And one more thing is there is no limit to the number of indicators which you guys can add in algorith. So let's say a strategy based on that and let's practice this for the last let's say from Jan 2021 the list. Let's name this multi-indicator setup and I want all this indicators to work on the nifty future chart. So I'm changing it to futures. So here what I'm doing is I'm adding number of indicators that is starting with super trend the standard 10 comma to 5 minute. Next is RSI. Next is pivot points. Next is Ballinger bands. And here I can change period of the Ballinger band. So only say instead of 20 I can go 15 period Binger band. And see I can add an indicator called ADX. And I can also you know compare it with the previous candle and let's say previous five candle six candles higher P. So what I'm doing is so the indicator name is called last 10 candles and using this what I can check is whether the price is above the last let's say three candles high. I want my trades to be taken only when the price has broken above last three candles. So we have added let's say more than five six indicators here and as I told there is no limit to adding the any number of indicators in algorith and here I can come and configure a comprehensive entry condition that is I'm giving my current close is our super trend and my RSI levels at the end time of entry should be above 20 and I can come to current close and here I'm giving it should be above the middle binger band and one more condition which I'm giving is it should be above the R1 range and why I'm giving these specific values that I will explain it in just a minute I'm checking whether my you current close is above the last 10 candles highest high that is the last three candles highest high and the ADX indicator value should be below let's say 35 and you can also add a volume confirmation since it's a futures and for that I have to add one more indicator That is a previous candle. Just like the current candle, the previous candle gives you the OLC volume open interest values of the previously closed candle. So I'm saying current volume should be above my previous holding. As you can see this is a comprehensive condition and this is to show you how many you know entry logics or entry conditions we can automate n doors with these. So I've added like what three six close to eight indicators and I've added all of them in the entry condition and let's say entry let's except let's keep it simple with a simple uh super trend and let's trade premium near 220 for example. And let's see let's give a point stop loss of uh 50 points maybe. So this is to show you guys what is the capabilities and also I can add this number of indicators and and then automate them with these and after configuring these values I'm clicking on run now als let's say five years four to five years of market data and give me a comprehensive I can see I have this is the result I got got for that particular condition 47% win rate you 26,000 draw down over 48 uh days and you can see how the strategy has performed across you know the years and across multiple days also how it performs on each individual Thursday and everything and data have both transactions for this one and I can see oh what is my win streak loss rate with Here I can see three continuous wins, big wins and four continuous small losses. five and then again a win three losses again a win and as I told this particular setup that we saw at the last to show what is capable you know what is possible in algo and how much of a capable platform it is so we started with let's say one or two indicators but also in algo you guys can configure any number of indicators and any set of entry condition. Let's say this is for a bullish condition. I can add one more case have a bearish condition. I can have add one more case and have a nondirectional condition. That is whichever condition let's say uh before uh 11:30 let's say either the bullish or bearish conditions would have taken trade or else after 11:30 I will deploy a short strategy like any conditions you can think of. Likewise, I can add 10, you know, different cases under one single strategy. So, if you guys have any other questions, do put it in the YouTube live chat box. And if you guys are new to the platform, we have a live Q&A session every trading day at 4 p.m. where you can join and ask any queries. Let's say starting from what is algorith started with this or else if you're already using the platform and have you know questions regarding how to configure certain setups and everything you guys can come to algor click on the first banner and join the live Q&A session every trading day at 4 p.m. And the second banner will redirect you to YouTube playlist where we have every single video content that's required for you to get started with algorous you know how can I read a back test report you know how can I build an option selling strategy how can I you know automate a multi-indicated option buying strategy an expiry setup you know this has a content that's I enough for uh you know getting you started with angles. So if you're a new user do check this out it will be very helpful and also you can put all your queries in the community. Under the argo section the queries will be answered immediately by our team. So if you guys have any final questions to put it in the chat box and while we are waiting for questions Friends, let me quickly explain the pricing also. Pricings are very simple and nominal in algorith starts as low as 10 rupees per day. That is you're building a basic setup. Let's say a directional uh let's say a nondirectional uh strangle or a straddle and let's say directional uh multi- indicator buying strategies like the one which we saw now. These uh we charge only 10 rupees for for these. Let's say if your strategy uses any advanced uh you know features let's say the multiple cases that we saw or the adjustment feature or you know the strike multiply calendar splits anything like that then we charge 20 rupees per day and all the you know strategies I mean all the pricing and for one deployment only and it's not like uh the pricing which you see in the same with other algo trading platforms you know where you have to pay an upfront subscription costly B2,000 3,000 or 5,000 and we have a comprehensive back test planning also which starts as low as 99 for 25 back test credits and it goes up to 119 for,000 back test credits. So depending on your back test needs and usage you guys can purchase the plan which fits you and and we have also a video for explaining the advanced features and algorith. So what are the advanced features and how can you use them in your uh strategies and you know how can you automate different setups and algorith. So I highly recommend you guys to check out this YouTube playlist and if you're also looking for a Q&A session can live the I mean join the live uh Q&A session by coming to Algor and clicking on the first button. So that's it for today's uh session everyone and don't forget this is the first of uh the sessions that is going to come based on the indicators topic in aldors we have literally 85 plus uh techn technical indicators and analytical tools you know based on which we'll be having much more sessions in uh future know explaining what are the different uh indicators you know what are the different functions such as the math function the signal function the range breakout or let's say difference between the previous end candle and last end candles and how to create different setups with all the strategies I mean all the indicators that are available so do stay tuned for that so that's it for today's session Everyone, thank you very much for joining and have a very good evening.