Retail Algo Trading Framework

The three parties

Every retail algo setup involves three parties: (1) the user (you), who holds capital and authorises trading; (2) the broker, who executes and holds funds under SEBI regulation; (3) the software platform (Sleeping Trade), which provides execution logic via the broker API.

Who does what

You: fund and authorise. Broker: executes, holds funds, reports to SEBI. Platform: decides when and what to trade based on software logic. Each party has defined responsibilities and each party is replaceable — you can switch brokers, we can improve the logic, you can revoke authorisation.

Where liability sits

Trading loss risk sits with the account holder (you). Execution risk sits with the broker. Software risk sits with the platform. This mirrors how institutional trading works — it's not a retail-only construct.

Best practices

Use only one platform at a time to avoid conflicting orders. Monitor your broker's statements weekly. Keep good records for taxation. Treat this like a professional trading arrangement, because legally it is one.

Disclaimer: Educational content. Not legal or investment advice. Regulations change — consult a qualified professional for your specific situation.

What this means for you

The retail algo framework establishes how vendor-operated algos integrate with brokers and reach retail users. It defines vendor responsibilities, broker integration requirements, and user authorisation flows.

For users, the practical impact is that compliant algo services should be reachable through a broker's API marketplace or the vendor's own onboarding flow with broker API authorisation.

How Sleeping Trade stays compliant

Sleeping Trade integrates with brokers through their published API products (Zerodha Kite Connect, Upstox API, Angel SmartAPI, 5Paisa, Fyers). Each integration uses trade-only access and the broker's standard authorisation flow.

We do not bypass the broker. The broker is in the loop for every trade. This is what makes the structure compliant under the retail algo framework.

Frequently Asked Questions

Why does the broker matter under the framework?

Because the broker is the regulated entity. The framework requires that algos integrate through the broker's regulated execution path — not bypass it.

Can my broker block Sleeping Trade?

If your broker disables your API access, our connection breaks. You retain the right to revoke and the broker retains the right to disable.

How does this differ from advisory?

Advisory tells you what to do; algo executes. The frameworks are different. Sleeping Trade is algo, not advisory.

How to verify a vendor operates within the framework

Check that authorisation flows through your broker's standard API consent screen — not through a vendor-side credential form.

Check that trades show up in your broker contract notes with your client code, not pooled into a vendor account.

Check that you can revoke API access from your broker dashboard at any time and that doing so immediately stops the vendor's activity.