A powerful quality that successful traders embody in their trading practice, is Conviction. It might surprise you that Tarun, EPAT alumni, started trading at a young age of 14. All this while, he was being guided and mentored by his elder brother and has since been trading keenly. He confided in us that he finds conviction and happiness in what he does.
We connected with Tarun who, despite the coronavirus lockdown situation, shared his journey into the world of algorithmic trading with us. Here’s his story.
Hi Tarun! Could you tell us about yourself?
Hi! I’m Tarun Singh Chauhan. I’m based in Mumbai. I’m in my final year of College studying Maths and Statistics – which is currently on a pause due to the Coronavirus Pandemic. I love football, played it a lot in school tournaments and I still love playing it.
I got introduced to trading at the age of 14 with the execution of orders in Gold and Crude (on the MCX) for my elder brother. I had started to set stop-loss orders and target orders by the time I was 15. I have been into trading for the past 9 years and I love it. I have a lot of conviction in what I do right now and I’m not keen as yet to get into the job aspect.
Trading full time, I’m working with my elder brother Jatin Singh. We consider trading as a sport, everyone has their own playing style.
Currently, I’m dealing with Index options (bank nifty and nifty). Options have greeks to them and you have a lot of room to play around and you need to be adept at mathematics to make it work in options. It is something that I really like.
As I am keenly interested in the problem statement and quest of generating alpha when the markets are sailing sideways and generating none.I have been devising algorithms that detect mispricing in options by the help of mathematical pricing models and exploiting them in a hedged manner, have also been working on algorithms performing statistical arbitrage by finding robust relationships between various scripts and exploiting the deviations detected in these relationships.
It is interesting to know that you started to trade when you were only 14 years old. How did Algorithmic Trading come into your life?
The real reason behind how I got introduced to trading was my elder brother who himself has been trading for the past 18 years and who had started trading when he was 19 himself.
He is 15 years elder to me. This all started when I started showing interest in the markets around the age of 13, in 8th grade, doing my schooling in Indore, a city in Madhya Pradesh, India. I just kind of grew fond of the market and was mesmerised by the way my brother used to sit and trade on the terminals.
In the 9th grade, staying at a boarding school, I decided that I wanted to learn this over the summer vacations. As I picked up the nitty-gritty pretty quickly, my brother and I decided that I’ll take up private schooling so that I could dedicate more time to trading, thus dropping conventional schooling.
I did my secondary and senior secondary schooling privately and at the same time, I started trading beside my brother, learning about derivatives, markets, exchanges, and how the trading domain works. I also started executing orders on behalf of my brother, based on his instructions of when to long and when to short, and to follow which instrument.
When I was 16, I actually knew about the derivatives markets and various styles of approaching the markets, technical analysis and fundamental analysis - what are options, futures, limit orders, stock limits, and all that is required in order to trade in a very basic manner.
It was around this time that I started coding trend detection, momentum system with inbuilt position sizing etc. I started with AFL, the language of Amibroker, a charting software. For 2 years, I used to make basic systems in AFL, try to plot real-time signals in various instruments like Gold, Crude, Copper.
When I was 18, I started looking for the intersection of the inclination that I had towards coding and the domain knowledge that I had about the markets. We decided that I should opt to study Mathematics and Statistics because it has a very direct implementation in Trading. So, I started learning it, dedicatedly, but I wasn’t coding that much.
By the age of 20, I developed an end to end trend following strategy trading commodities on MCX primarily precious metals and produced triple-digit returns in a year but then on my way I realised that though trend following strategies have higher expectancy however they have a relatively lower Sharpe ratio which takes relatively longer to realise the expectancy so that motivated me to set out on a journey of finding alpha with higher Sharpe ratio
When I was 21, a year ago, we stumbled upon the QuantInsti website, and then we decided that this was the perfect course which entails the keenness of an individual to learn algorithmic trading.
Algorithmic Trading was what I was interested in and QuantInsti seemed to provide me with a way of learning it. I took a detailed overview of the course and that is when I realised that I should be joining EPAT because of my coding background and knowledge of the trading domain. As QuantInsti provides the key link between these two.
Hence, I was in the right place at the right time. I consider myself very lucky to have my brother as my mentor, otherwise, I wouldn’t have been here. With his mentorship, I learnt Trading quickly, guided by his experiences and knowledge which I believe would’ve taken me more years if I learnt by myself.
How are the knowledge and the skills gained at EPAT helping you today?
EPAT helped in giving me a macro view of the different types of alphas available that can be harnessed by using algorithms that can be created by coding, mathematics and using principles of finance. The toughest part that people face is linking these three domains together.
Engineering students are not aware of Finance, and Finance students don’t know about Coding. Whereas Algorithmic Trading is an intersection between Engineering and Finance. This is something where EPAT helped by giving the gist of the platter of styles available. So, it made me aware of the trading styles that are available using my current skill set of coding and the knowledge of Finance and mixing these two to create alpha in the market.
Now I am aware of various concepts, such as how I can apply my skills to trading, etc. My approach is quite refined as well. Utmost gratitude to my elder brother.
What one feature of EPAT did you really like among them all?
The Support feature, hands-down! It is very good. Whenever I want to get in touch with a faculty, I just call up my course coordinator. They just schedule it on the calendar and Boom! You get the call.
You can share specific queries with the market experts who are actually teaching you during EPAT.
The process is very seamless. Support is the key feature that stands out for me. I’ve never faced any issue with it. Subash, my Support Manager and Deepa, the Alumni manager are always there for me.
Do you have any message for the aspiring Algo Traders out there?
India’s market might not be liquid currently, but then it is growing. As it is a developing economy, participation in the market will also increase with time. It is only a matter of time that Algorithmic Trading will be the next thing that will govern the markets entirely.
If you board the train, you will reach the destination where it’s headed.
I would definitely recommend EPAT so that you could get a sense of awareness as to what actually Algorithmic trading is about and what are the key points that you should keep in mind in order to pursue algo trading as a career.
I’m not aware of any institution apart from QuantInsti that is teaching Algorithmic Trading specifically. And due to its robust support system, I think it is definitely a bang for the buck!
Thanks for sharing your journey with us, Tarun. It is really inspiring to learn how motivational, how positive an impact, the support and mentoring of a loved one, can have on someone’s life and career. We wish you the best for your future.
Do you desire to equip yourself with lifelong skills which will always help you in upgrading your trading strategies? With topics such as Statistics & Econometrics, Financial Computing & Technology, Machine Learning, EPAT ensures that you are proficient in every skill required to excel in the field of trading. Enquire here.
Disclaimer: In order to assist individuals who are considering pursuing a career in algorithmic and quantitative trading, this case study has been collated based on the personal experiences of a student or alumni from QuantInsti’s EPAT® programme. Case studies are for illustrative purposes only and are not meant to be used for investment purposes. The results achieved post completion of the EPAT® programme may not be uniform for all individuals.