Square Off allows customers to replicate their trades based on their algorithms in their own broker account. It means customer’s fund stayed on their own named and SquareOff’s trades got executed.

Minimum Investment: 

There used to be three kind of portfolio plans but currently they are operating only with NIFTY and BANKNIFTY algorithms –

Positional Trading: It’s not Intraday trading. The minimum capital required was 1.5 Lakh but it is currently discontinued as heavy drawdown used to scare investors.

NIFTY Intraday Trading: The minimum capital required is 60K.

Here goes the calculation of such minimum balance –

The margin of NIFTY = 25,000 INR.
Maximum Historical Risk = 20,000 INR.
Assuming 1.5 times the Risk = 30,000 INR.
Total Capital Required = 55,000 INR.
Hence rounding it off, it comes to 60,000 INR.

BANKNIFTY Intraday Trading:  The minimum capital required is 1 Lakh.

Here goes the calculation of such minimum balance –

The margin of BANKNIFTY = 30,000 INR.
Maximum Historical Risk = 30,000 INR.
Assuming 1.5 times the Risk = 45,000 INR.
Total Capital Required = 75,000 INR.
Giving it some room, it comes to 100,000 INR.

“What is your suggestion to a novice non trader who want to maximize his capital?”, I asked Kirubakaran. He replied, “The best of all is Bank NIFTY Intraday followed by NIFTY algorithm. Bank NIFTY has on average 10 trades in a month; NIFTY is on avg only 3 trades in a month.”

Historical Returns: 

I’ll say thanks to Mr. Kirubakaran for their transparency on allowing to share the returns publicly. All the results/metrics are net profits which means that all brokerage charges, STT, Stamp duty, service charge, slippages etc has been considered along with their 20% deductions.

Want the Balance Sheet?

Put you email to get the details of profits and loss separate based on daily and monthly calculations with relevant charts in an excel sheet.

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NIFTY Intraday Trading:
60,000 INR invested with Squareoff will generate profit of 2,15,889 INR for the investor.

Investment 60000
Total Profit in 5 years 215889
Total Returns in 5 years 360
Total no of trades 289
Average trades in a month 4
Average Profit in winning trades 2700
Average Loss in losing trade -1927
Total Average Profit per trade 747
Maximum Draw Down -17331
Yearly Average Returns 60
Lowest Returns in a year 15
Highest Returns in a year 112
Winning % 53
Losing % 47

 

BANKNIFTY Intraday Trading:
100,000 INR invested with Squareoff will generate profit of 6,02,980 INR for the investor.

Investment 100000
Total Profit in 5 years 602980
Total Returns in 5 years 603
Total no of trades 720
Average trades in a month 10
Average Profit in winning trades 4926
Average Loss in losing trade -2661
Total Average Profit per trade 837
Maximum Draw Down -30125
Yearly Average Returns 100
Lowest Returns in a year 41
Highest Returns in a year 197
Winning % 53
Losing % 47

 

Charges: 

They used to charge 2% of the invested amount per year as a management free and 20% of the profits in quarterly basis but They currently charge flat 20% on net profits. There are no other charges. Charges are payable at the end of the year. No monthly charges. No upfront charges.

Currently they’ve waived off their 2% management fee. However, capital with more than 5 Lakh shall be charged 2% management fee for the first year only payable at the end of year.

So 20% on profits only!

Capital Protection Guarantee: No. If there is any flaw and you lose your money. You lose your money. Period. But they’re soon going to input a capital protection plan as I’ve confirmed.

Minimum Holding Period: No bindings but it is recommended to keep 7–8 months.

Broker:

Angel Broking and Composite Edge

Broker Tip: Your earning will vary with the brokerage. I chose Angel Broking as I have a personal grudge over Composite Shitty Edge but I will ask you to choose Composite Edge cause they been partnered with Composite Edge since they provide a competitive brokerage structure of 0.006%.

They’ve currently discontinued Angel Broking. However, they’ll keep their existing investors who’ve already signed up with that platform.

Here is a short conversation with Mr. Kirukaban Rajendran of Square off

Kirubakaran: Angel Broking charges 3 times of what composite edge charges.
Me: Speaking of brokerage charges, all brokers give a percentage to the firm/person who has referred the customer to them. Correct? In such scenario, their charge towards customers will be profitable for you as they split the profit. Right?
Kirubakaran: Yeah, but it also increases the transaction cost. by opting with composite edge, we could reduce the overall cost for the investors which in turn would increase the profitability. if the customers make higher profit, eventually we make more profits. If we focus on brokerage, then we would soon shut shop.

Pros and Cons:

Pros:

  1. No manual intervention required from the customer, they can continue with the day job or business while our Algo would take care of their investments. Its 100% automated.
  2. SquareOff gets no money till they make profit. Period.
  3. No management fee.

Cons:

Drawdown. Quoting from Kirubakaran’s note-

Kevin Daveyauthor of the book Build Algorithmic Trading Strategies is an award winning trader, who is a winner of World Cup Championship of Futures trading. He has made more than 100% returns for 3 consecutive years. But what most of them doesn’t know is the kind of draw down he has witnessed to achieve such a huge returns.

4 BIG drawdowns, in just the first 3 months! Most people would not be to handle these, especially the 49% drawdown. Who can handle losing half of their account? Drawdowns are simply part of the trading game. People that tell you trading drawdown free trading is possible are not being truthful, in my opinion.”

You can read the whole story here at Kevin’s blog. Are you invested with Square off? Share your story below in comments.

QnA:

There has been some doubts I’ve received from the readers. I got those queries clarified from Mr. Kirubakaran.

Q: Are BANKNIFTY and NIFTY algo are based on same strategy or are correlated?
A: No, both are totally different with each other.

Q: What happened to the clients who were in the positional trading system?
A: They have been moved to the NIFTY Intraday algorithm.