My Journey from Engineering to Algorithmic Trading – A Decade of Lessons

Hi, I’m Midhun Rahul from Tamil Nadu. I graduated from SSN College of Engineering in 2013 and began my career with HCL Technologies. After a few years in the corporate world, I stepped into the exciting — and often brutal — world of options trading in 2018.

From 2018 to 2021, I was burning through my capital, paying my dues to the market while learning the deep mechanics of price action. It was a period of relentless learning, trial and error, and yes — some painful losses.

By 2021, with the advent of algorithmic trading platforms and backtesting tools, I made a shift. I teamed up with a group of skilled coders and began building high-performance option trading systems. We focused on weekly options in Nifty and Bank Nifty.

This led to the formation of an LLP named "Algobyte", where I actively managed a corpus of nearly ₹10 crore, spread across 25–30 client accounts. From 2021 to mid-2023, things were smooth. We delivered 50–60% annual ROI with a minimal drawdown of 4–6%, a performance that most traders only dream of.

For those interested in the deeper workings of my earlier algorithmic trading journey — including strategy design, risk management techniques, return expectations, and capital deployment — I’ve explained everything in detail in a YouTube video I recorded. It covers how we built the systems, managed portfolio-level drawdowns, achieved consistent 50–60% annual ROI, and navigated various market phases using data-driven weekly options strategies in Nifty and Bank Nifty. You can watch it here to get a behind-the-scenes look into the logic and performance of our trading systems during the peak of the algo phase.

However, by mid-2023, the landscape changed.

SEBI revised margin rules, NSE introduced FinNifty and MidCap expiries, and BSE brought in Bankex and Sensex weekly expiries. These changes coupled with market manipulation by US based Jane Street LLP Jane street manipulation led to a spike in volatility, increased manipulation, and overcrowded expiry trades. What once was a smooth 50-60% annual return game became a battlefield. Most algo strategies struggled, and returns started saturating.

Recognizing the shift, I reduced trading volumes and took a break to focus on another venture — scaled  used construction equipment dealer, an another venure of mine. I capitalized on the opportunity and managed to sell around 70–80 trucks during 2023–2024.

Even during this break, I kept a close eye on the market.

In 2025, I made my return — but this time, with a new approach: manual systematic trading, positional cum intraday discretionary models with predefined risk management.  The timing was fortuitous. At the beginning of 2025, SEBI banned Bankex, FinNifty, and MidCap expiries, reverting to just two weekly expiries (Tuesday and Thursday). This change offered some breathing room and a new window of opportunity.

I started small — with ₹25 lakhs — in April 2025 to test my new system. Over the next three months, the system delivered consistent results with controlled intraday drawdowns. All my 5 years of learnings was very useful in designing the trade logistics.

However, positional trading has its own risk — primarily overnight gap-downs of more than 2%, which can severely hurt gains. But since I’m a directional option seller (not non-directional like iron condors or straddles), and I follow trend-based data, 80% of gaps typically favors my positions.

Roughly 75% of my trades are directional bets, and the rest are neutral. Based on my backtesting, most overnight gaps have supported my position. But that doesn’t mean the system is immune to risk. Unannounced terrorist attacks or major geopolitical events could still result in 3–5% gap-downs, potentially wiping out 10–20% of the account overnight if the open positions are against the gaps. Which may happen once or twice in couple of years.

That said, every business comes with risk. In trading, managing that risk — and bouncing back — is part of the game. With the current setup, I believe I’m better equipped than ever to ride this second innings with confidence and discipline.

Connect me @ 99945 39922

• My Performance : Click here
• Who can get benefits from option trading : Click here
• Evolution of Indian Markets & Regulation by SEBI : Click Here
• Started my fitness journey from July  : Strava link
• Previous Algo Trading performance Intro Video : Youtube Link