How to Build Algo Trading Strategy using Zerodha API – Technical Indicator & Price Action Strategy

Algo trading is rapidly transforming the way traders and investors work in the stock market. With Zerodha’s powerful Kite API and platforms like Findnex, you can fully automate your trading strategies using technical indicators and price action.

You can follow below guide to learn step-by-step on how to build trading algo.

• What Zerodha API is

• How algo trading works

• How to build a real trading strategy

• How to automate it using Zerodha API

• How Findnex simplifies the entire process

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What is Algo Trading?

Algo trading (algorithmic trading) is a method of executing trades automatically using pre-defined rules based on:

• Price action

• Technical indicators

• Volume

• Market structure

• Risk management

Once programmed, the system monitors the market and places trades automatically without human emotion.

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What is Zerodha API?

Zerodha provides Kite Connect API, which allows traders to:

• Fetch live market data

• Place buy/sell orders

• Track positions

• Automate strategies

• Build trading bots

Zerodha API supports:

• Python

• Java

• NodeJS

• PHP

But building a full algo system from scratch requires:

• Coding knowledge

• Server setup

• Strategy engine

• Risk management

• Monitoring dashboard

That’s where Findnex Algo Trading Platform comes in.

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Why Use Findnex for Zerodha Algo Trading?

Findnex provides:

✅ No-code strategy builder
✅ Zerodha integration
✅ Real-time execution
✅ Risk management
✅ Live dashboard
✅ Strategy automation

You focus on strategy. Findnex handles automation.

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Strategy: Technical Indicator + Price Action Strategy

Let’s build a powerful, real-world strategy.

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Strategy Concept

We combine:

• Trend Identification → Moving Average

• Momentum Confirmation → RSI

• Price Action Entry → Breakout

• Risk Control → Fixed SL & Target

This creates a high probability intraday & swing strategy.

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Indicators Used

1. 20 EMA – Trend direction

2. RSI (14) – Momentum filter

3. Previous High Breakout – Price action

4. Volume – Confirmation

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Entry Rules (Buy)

Buy when:

1. Price is above 20 EMA

2. RSI is above 55

3. Current candle breaks previous candle high

4. Volume is above 20-period average

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Exit Rules

• Stop Loss = Previous candle low

• Target = 1:2 Risk Reward

• Trailing Stop using EMA

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Strategy Logic (Simple Explanation)

If:

• Market is trending up

• Momentum is strong

• Price breaks resistance

• Volume confirms breakout

Then:
👉 Enter BUY trade

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How to Build this Strategy using Zerodha API

Step 1: Create Zerodha API Account

1. Go to Zerodha Developer Portal

2. Create an app

3. Get API Key & Secret

4. Enable Kite Connect

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Step 2: Connect Zerodha API to Findnex

Login to Findnex → Connect Broker → Zerodha
Enter your API Key
Authorize account

Now Findnex can trade on your behalf.

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Step 3: Create Strategy in Findnex

Using Findnex Strategy Builder:

• Select Instrument: NSE Stocks / Nifty

• Select Timeframe: 5 min or 15 min

• Add Indicator: 20 EMA

• Add Indicator: RSI(14)

• Add Condition: High Breakout

• Add Volume Filter

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Step 4: Add Risk Management

• Fixed SL: 0.5%

• Target: 1%

• Max trades per day: 3

• Capital allocation: 10% per trade

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Step 5: Backtest Strategy

Run backtest on:

• Last 1 year data

• NSE stocks

• Nifty index

Check:

• Win rate

• Drawdown

• Profit factor

• Expectancy

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Step 6: Go Live with Paper Trading

Run strategy in paper mode for 7–10 days.

Validate:

• Execution accuracy

• Slippage

• Signal quality

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Step 7: Deploy Live with Zerodha

Once confident:

• Enable Live Trading

• Monitor dashboard

• Track P&L

• Optimize rules

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Advantages of Algo Trading using Zerodha API

• Emotion-free trading
• Fast execution
• Discipline
• Scalable
• Works on multiple stocks

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Why Technical + Price Action Works Best

• Indicators confirm trend

• Price action triggers entry

• Volume validates breakout

• Risk is controlled

 

Algo trading using Zerodha API is no longer just for institutions. With platforms like Findnex, even retail traders can build professional-grade trading systems without coding.

If you want to trade smarter, faster, and consistently — automation is the future.

You can try FindNex terminal for free, chick here to sign-up and download.