How to Start Algo Trading on Zerodha? Strategies & Costs

28 Feb. 2025

How to Start Algo Trading on Zerodha? Strategies & Costs

Algorithmic trading, or algo trading, has revolutionized the process of trade execution by traders and investors from traditional approaches to technological innovation in financial markets. Such platforms as Zerodha are accountable for providing robust algo trading technologies to retail traders through automation and data-driven decision-making. This article will in particular illustrate the way algo trading has been applied in the past, the way it functions within Zerodha, best strategies, API trading-related charges, and Combiz Services Pvt Ltd, the top provider of trading automation technology, in facilitating the algo trading experience on Zerodha.

Algo Trading History

The term algo trading dates back to the early 1970s, when financial institutions had started automating trading functions using computers. During the 1980s, further enhancements were made with electronic trading platforms. High-frequency trading (HFT) and machine learning-based strategies for investment emerged in the mid-2000s, with which traders could execute thousands of orders in seconds.

In India, the Securities Exchange Board of India (SEBI) permitted the introduction of algorithmic trading in 2008. After this approval, more and more retail traders started experimenting with algo trading through brokers such as Zerodha. Such new-age APIs and automation services allow traders to build their personalized trading robots, which do trading on pre-defined conditions.

How Algo Trading Works on Zerodha

Traders will have a great infrastructure for algo trading when utilizing the Zerodha API and Streak. This is how traders can automate their trades on Zerodha:

Zerodha Kite API: This allows developers to enable automated strategies within their trading accounts. Traders can write custom scripts in Python, Java, or any programming language to enable trade placement, retrieve market data, and analyze trends.
Zerodha Streak: A no-code algo trading platform enabling traders to create and backtest strategies without the need to program.
Third-Party Algo Trading Software: Traders may link Zerodha to third-party systems such as Combiz Services Pvt Ltd, a provider of premium automation and customized algo trading.

Algo Trading Strategies on Zerodha

Successful algo trading also needs well-laid strategies. Some of the most popular algo trading strategies available for traders on Zerodha are presented below:

Trend Following Strategy: This is the pattern in the market employing measures like the moving average, MACD, and RSI. The automated bots make trades on crossovers or changes in momentum.

Arbitrage Trading: Algo trading bots can identify very minute price disparities across exchanges or markets in very short time frames and trade automatically in order to make effective use of this inefficiency.

Market Making Strategy: Market making typically entails putting on buy and sell orders at various price points in order to take advantage of the bid-ask spread. The strategy is optimally suited for high-speed execution and is applied in high-frequency trading.

The Mean Reversion Strategy: Mean reversion strategies are based on the assumption that prices revert to historical means at various points in time. Use of Bollinger Bands and standard deviation calculations assists a trader to determine when to enter or leave positions.

Scalping: Scalping is a form of trading where one trades several times ranging from seconds to minutes in the hope of gaining from very small price movements. Speed and automation are the two most critical elements of scalping.

AI BOT Features:

AI BOT-Algo Trading and Copy Trading is a web-based platform
AI BOT supports multiple broker
AI BOT allows cross-broker copy-trading
AI BOT supports algo trading from various trading platforms eg. Trading View, MT4/5, Python, Excel, Amibroker, Ninja Trader, etc.
AI BOT supports direct trading in multiple accounts in one click
AI BOT has basket order and one-click trade features
AI BOT can place a trade in thousands of accounts in one click with mili-seconds latency.
AI BOT your trades can copied even when you are not suitable for part-time traders as well.

Zerodha API Trading

Zerodha Kite connects to an API that traders can use to design their fully automated trading systems. Access to some of the features available in the API includes:

Market Data Access: Retrieve real-time and historical data for analysis.
Order Execution: Place orders programmatically and modify them.
Webhooks & Notifications: Get alerts for market conditions and trade execution.

Integrated with algo trading platforms: Interfaced with software like Combiz Services Pvt Ltd for better automation.

Cost of Algo Trading on Zerodha

Algo trading costs depend to varying degrees on the services and tools one is using. Below are some of the key costs incurred.

Kite API Subscription: Zerodha charges a subscription fee for accessing the API. The start price for retail traders is ₹2000 per month.
Streak Subscription: Fee starting from ₹500 per month depending on the plan one chooses.
Third Party Algo Trading Application: Companies like Combiz Services Pvt Ltd offer customized algo trading solutions at various price models based on features and support.
Brokerage Transaction Cost: Zerodha offers absolutely no brokerage on equity delivery and charges ₹20 per executed order on intraday and F&O trading.
Infrastructure Cost: Algo traders using cloud-based or VPS solutions may incur extra charges for hosting and server maintenance.

Why Choose Combiz Services Pvt Ltd to Algo Trade on Zerodha?

Combiz Services Pvt Ltd is a top leading company providing algo trading solutions that perfectly work with Zerodha. Here are the reasons traders choose Combiz.

Automated Trading Bots: Tailor-made solution for automation of the different trading strategies.
Seamless API Integration: Direct connection onto the Zerodha Kite API for automated execution.
Backtesting and Optimization: Sophisticated tools with which to test strategies before deploying into live markets.
24/7 Support and Maintenance: Ensuring continuity in operations without any intra-day disruptions.

Conclusion

Algo trading at Zerodha actually signifies that the traders will be capable of automating their trading and ultimately become extremely efficient. Utilizing techniques such as trend-following, arbitrage, and scalping, these traders will be capable of exploiting trade-at-market opportunities with minimal intervention. API trading within Zerodha provides live data and auto-execution and is thus an effective tool in the hands of both retail and institutional traders.

For those traders seeking a better algo trading experience, Combiz Service Pvt Ltd offers good solutions based on their requirements. Automation for novices or professionals can improve their trading performance to the next level.