Types of strategies

Strategies can come in various shapes and forms and it is virtually impossible to support all kinds of strategies. Having said that,

1. We are trying to make the platform as flexible as possible to build multiple kinds of strategies and

2. Over time, we will keep adding support for different types of strategies

Limitations

Before discussing the types of strategies that ARE supported, let’s first discuss what types are NOT supported.

• Intraday trading strategies are not supported – This implies that currently, all our strategies are designed to take trades only once per day and this also applies to risk management triggers. We are working on launching support for intraday strategies as well.
• Short selling is not supported – We do not support strategies that take short positions.
• Futures and options are not supported – Available instruments are stocks (cash segment) and ETFs for paper trading and Mutual Funds for tracking.

Broadly, we currently support portfolio-based strategies rather than position-based strategies. By portfolio-based, we mean strategies that follow the framework of classic quant investing.

Any strategy that cannot fit into the framework described below is not supported.

But as mentioned above, we will keep adding support for more types of strategies.

Supported strategy types

Now let’s look at the types of strategies you can run on sharpely.

1. Stock baskets

In this, your stock selection model is a fixed basket of stocks. You define weights, rebalancing schedule and other strategy parameters and your strategy runs in an automated manner unless you decide to never rebalance and manually maintain your portfolio.

We talk more about this in Creating a stock basket.

2. Dynamic strategy using stock screener

In this, your stock selection model is a stock screener. You define weights, rebalancing schedule and other strategy parameters and your strategy runs in an automated manner.

We talk more about this in Creating a dynamic strategy using stock screener

3. Dynamic strategy using factor model

In this strategy, a factor model will be used for dynamic stock selection. You define weights, rebalancing schedule and other strategy parameters and your strategy runs in an automated manner.

We talk more about this in Creating a dynamic strategy using factor model

4. Mutual Fund baskets

In this, your MF selection model is a fixed basket of MFs. You define weights, rebalancing schedule and other strategy parameters and your strategy runs in an automated manner.

The workflow is similar to Creating a stock basket. But here some of the modules like risk management and exit model will not be available.

5. ETF baskets

In this, your ETF selection model is a fixed basket of ETFs. You define weights, rebalancing schedule and other strategy parameters and your strategy runs in an automated manner.

The workflow is similar to Creating a stock basket. But here some of the modules like exit model will not be available.

A few things to note:

In paper trading, your strategy will be automatically rebalanced as per your rules. In live trading, you will be notified to carry out the order execution.

For more details on trading modes, read Paper Trading on sharpely.