How He Built an Algo Trading Machine That Trades Without Emotions #Face2Face with Mr. Chirag Keswani

In his Face2Face conversation with Chirag Keswani, Vivek Bajaj highlighted how artificial intelligence is transforming algorithmic trading by making automation accessible even to non-programmers. With modern AI tools, traders no longer need advanced coding skills to build and execute systematic strategies. However, he cautioned that technology alone cannot guarantee success. Vivek explained how many retail traders fall into the "casino trap" by treating cheap out-of-the-money options as lottery tickets, ultimately providing liquidity to institutions while eroding their own capital.

He stressed that professional traders build systems with a clear three-layer architecture consisting of a Core Layer for consistent edge, a Tactical Layer for capturing short-term opportunities, and a Risk Layer for protecting capital. Discussing options trading, he emphasized managing short straddles dynamically by monitoring the combined premium and adjusting strikes with market movements instead of relying on rigid stop-losses.

He also pointed out that having a stable source of income outside trading reduces emotional pressure, allowing traders to remain patient and avoid unnecessary trades. Vivek further explained that every strategy performs differently across changing market regimes, making it essential to recognize when a strategy stops working.

He warned against relying solely on backtesting, recommending forward testing to account for real-world execution challenges such as slippage and transaction costs, which can significantly impact profitability. Rather than chasing high returns, he advised traders to focus on maximum drawdown as the true measure of a strategy's sustainability. Finally, he cautioned against curve fitting, explaining that simple, robust systems with fewer rules are far more reliable than overly optimized strategies designed only to perform well on historical data.