Loading
Market Intelligence › Basic Terminologies
API, automation and approval — what is allowed and what is not
Published by The Retail Trader · AUG 08, 2026 · Compliance & Regulation
Running your rules by putting them in code seems simple, but it is also possible. But the rules surrounding it are stricter than is often stated.
Sending orders through Broker's API is a regulated activity. The exchange must know that the order is automated, and there is a framework of approval and unique identifier for the strategies.
Its purpose is that wrong running programs do not shake the market, and the source of every order remains traceable.
These things are important:
• Taking a ready made algorithm from a third platform does not end your responsibility.
• Selling algos with "guaranteed profit" is one of the oldest scams.
• Backtest results are not live results — slippage and charges do not occur in most backtests.
• A bug can do damage in a second that you wouldn't do manually in a month.
Before automation, it is necessary to execute the strategy manually. If the rules aren't clear enough that you can follow them yourself, putting them into code will only accelerate mistakes.
This article is for educational purposes only. It is not a buy or sell recommendation, a claim of guaranteed returns, or advisory guidance. Exchanges, SEBI and RBI change rules, rates and procedures from time to time, so verify every figure with your broker or an official source.