Wednesday, March 6, 2013

New Trading tools,14286 and All That

The DOW hits a record high.Strange how a few months back the economies of Europe and US looked creaky,China seemed to be on a 'hard landing',India had no reforms and the general air of pessimism was like the haze in Guangzhou!
The value based index that is the DOW has always performed during difficult times and this time is no different.India on the other hand is undergoing a strange lethargic time,especially the stocks on its bellweather NSE and BSE.
The large caps have corrected 10%,the midcaps have been thrashed anywhere from 20-70%.Liquidity is low and market depth poor.Yet the BSE has been meandering around 19,000 levels though most stock prices are reflected levels of 2009-10.
Expectations of 25 bips cut in CRR in the March RBI meet might turn around sentiment and an unexpected 50 bips cut could lead Indian equities to new highs even when all round participation in markets is at new lows.
The way we look at trading in India I believe will undergo a fundamental change in the next two years.Gone will be the retail that buys or sells miniscule number of stocks.Gone too will be physical arbitrageurs as more Algorithmic trading takes hold.Mind you its distinct from high frequency trading.ALGO trading is more like the GPS in your car that guides you to the destination but does not itself drive the car.
The new trader/investor will be a technically adept individual with ALGO tools and the trading will be fast and precise.A lot of the HNI traders I talk to in Mumbai,Kolkata,Gujarat and Chennai are feeling the need for a trading system that provides inputs in real time.
My firm has made a small begining in introducing a platform for retail traders at a very competitive cost and I am sure other brokerages across India will race to develop tools.You,the reader,if you happen to be trading in the equity,commodity or currency markets,should race to unlearn and learn new technologies as education is the only way to evolve...!!
For any discussions,clarifications plz feel free to contact me:vishal.prabhakar71@gmail.com or
@dzango71 for twitter