Introduction
Managing risk and optimizing profits are critical in algorithmic trading. With the new Day’s MTM (Mark-to-Market) feature, Algomojo enhances trade exit strategies by allowing traders to set exit conditions based on daily MTM profits and losses. This provides a dynamic and real-time approach to managing trades.
This guide explains how Day’s MTM works for Target, Stop Loss (SL), and Trailing Stop Loss (TSL) and how to configure it effectively within Algomojo.
1. Day’s MTM Target Type and Target Value
MTM Target is a profit threshold based on accumulated daily MTM values, triggering an exit when reached.
MTM Target Type Options:
✅ Day’s MTM Value – Sets the profit exit condition based on daily accumulated MTM profits.
Example: Using Day’s MTM for Target
- MTM Target Value: ₹2000
- Entry Price: ₹100
- Quantity: 100
- Current LTP: ₹120
🔹 Calculation:
- MTM Profit = (LTP – Entry Price) × Quantity
- ₹(120 – 100) × 100 = ₹2000
- Trade exits when Day’s MTM reaches ₹2000.
This ensures profit booking at a pre-defined MTM value without depending on static price targets.
2. Day’s MTM Stop Loss (SL) Type and SL Value
MTM Stop Loss helps prevent excessive losses by exiting trades when daily MTM losses hit a defined threshold.
MTM Stop Loss Type Options:
✅ Day’s MTM Value – Sets an exit when cumulative MTM losses reach a specified amount.
Example: Using Day’s MTM for Stop Loss
- MTM Stop Loss Value: ₹-1500
- Entry Price: ₹100
- Quantity: 100
- Current LTP: ₹85
🔹 Calculation:
- MTM Loss = (LTP – Entry Price) × Quantity
- ₹(85 – 100) × 100 = ₹-1500
- Trade exits when Day’s MTM reaches ₹-1500.
This approach dynamically adjusts to market movements and ensures risk is capped at an overall loss level rather than per-trade basis.
3. Day’s MTM Trailing Stop Loss (TSL) – Dynamic SL Adjustment
Day’s MTM Trailing Stop Loss (TSL) locks in profits dynamically as the cumulative MTM value increases.
MTM TSL Parameters in Algomojo:
✅ MTM Step (X): Defines the incremental profit required for TSL adjustment. ✅ TSL Adjustment (Y): Defines the amount by which the stop loss moves when profit increases by X.
Example: Using Day’s MTM for Trailing Stop Loss
- Entry Price: ₹100
- MTM Initial SL: ₹-1000
- MTM Step (X): ₹500
- TSL Adjustment (Y): ₹250
🔹 Scenario:
- At ₹100 (Entry Price) → Initial MTM SL = ₹-1000
- When Day’s MTM profit reaches ₹500 → SL moves to ₹-750
- When Day’s MTM profit reaches ₹1000 → SL moves to ₹-500
- When Day’s MTM profit reaches ₹1500 → SL moves to ₹-250
- When Day’s MTM profit reaches ₹2000 → SL moves to breakeven
This mechanism ensures profits are secured while allowing trends to continue favorably.
4. How Algomojo Executes Day’s MTM Target, SL, and TSL
Algomojo continuously evaluates all three exit conditions during the day: ✅ If the Day’s MTM reaches the Target, the position is squared off. ✅ If the Day’s MTM hits the Stop Loss, the position is exited to prevent excessive loss. ✅ If MTM TSL is active, the stop loss dynamically adjusts and exits when hit.
🚀 This provides a smarter, automated, and dynamic approach to trading!
5. Best Practices for Using Day’s MTM Target, SL, and TSL
✅ Avoid Setting MTM SL Too Tight: Normal market fluctuations can trigger premature exits. ✅ Use MTM TSL for Trend-Following Trades: Helps protect gains while riding the trend. ✅ Maintain a Proper Risk-Reward Ratio: Example: Risk ₹1000 to Gain ₹2000.
Conclusion
Algomojo’s Day’s MTM in Target, SL, and TSL provides traders with an advanced exit strategy for automated trading. By implementing this feature, traders can efficiently manage profits, risks, and stop losses dynamically throughout the day.
💡 Test different MTM settings in Algomojo and optimize your strategy today!
📢 Have questions? Drop them in the comments below! 🚀
🔗 Stay updated with new features: https://docs.algomojo.com/releases