uTrade Algos

What Is PnL and How to Use It on uTrade Algos

June 26, 2024
Reading Time: 3 minutes

In the world of algorithmic trading, measuring performance goes beyond simply looking at profits. Here strategies are executed at lightning-fast speeds and hence, metrics beyond profits are needed to assess the robustness of it all. Among the various metrics, the PnL aka Profit and Loss is a critical metric that sheds light on the effectiveness of your algo trading strategy. 

The PnL provides valuable insights into your strategy’s risk management, identifies areas for improvement, and ultimately helps you fine-tune your algo for optimal performance. uTrade Algos is one of the algorithmic platforms in India that showcase your PnL on their platform, once you sign up on it. 

In today’s blog, let’s discuss what PnL is and how traders can check it on uTrade Algos. 

Profit & Loss: A Useful Metric for Strategy Evaluation

When we read the words PnL together, the only thing that comes to mind is ‘Profit and Loss.’ However, in algo trading, it means much more than this. PnL or Profit & Loss refers to a metric for evaluating a trading strategy’s performance. It calculates the average profit on winning trades divided by the average loss on losing trades over a specific period. A higher PnL indicates a strategy that makes more money on winning trades than it loses on losing trades.

While you may have understood what PnL means, the question of why it is important for algo traders might be plaguing your mind. Let us answer it in our following section. 

Why is PnL Important in Algo Trading? 

Assessing the robustness of a strategy is important for an algo trader. Using a metric like PnL, this can be done. But, why is it important? Here are the reasons:

Evaluates & Measures Strategy Performance

It helps algo traders visualise how their strategy is doing. A high PnL indicates that the strategy is generating profits, while a low one indicates that the strategy needs adjustments. 

Managing Risk

When algo traders compare the average loss with average profit, they can understand risk areas and make informed decisions regarding risk management. A high PnL allows for larger position sizes while maintaining acceptable risk levels.

Benchmarking

PnL can provide a benchmark to algo traders to compare with their own strategy’s past performance and track progress. 

Strengths & Weaknesses Analysed

PnL is a metric that helps assess the parts where an algo trading strategy is weak and where it is strong. Based on it, traders can make decisions to fine tune them. 

Now that we’ve explained what PnL is all about and why it is important for algo traders, let’s take you through the PnL on uTrade Algos. 

How to Use and Check PnL on uTrade Algos

uTrade Algos is a reliable, robust and modern algo trading platform that offers traders a chance to effortlessly trade in the live market. While there are many features like uTrade Algos strategy builder, uTrade Originals, payoff curves, global exit parameters and more, the platform also offers traders metrics to evaluate the robustness of a strategy. A metric like PnL is easily available to users of uTrade Algos once they sign in to their account on the platform. To access the same, you need to follow the below-mentioned steps:

  1. Login to your uTrade Algos account.
  2. On the main homepage, on the extreme left, you will find an earnings box. In that, you can view your total earnings to date. 
  3. A PnL report button will be visible in that box. When you click on it, you will be redirected to the account details page, where you can see a colour-coded graph. This graph shows you your profit & loss day-wise in a colour-coded manner. 
  4. If you want to change the time period, you can do so by clicking on the days button on the report page. You can also select a specific strategy with the time frame for which you want to check the PnL figures. 
  5. The figures will be displayed below the colour-coded graph. 

 

Here is a video to guide you through the process in a detailed way:

Conclusion

For algo traders, several tools come in handy on their algorithmic trading journey. Be it margin calculators, global exit parameters, payoff curves or PnL, each algo trading feature offered by uTrade Algos will take a trader a step closer to their trading goals. It’s time to switch to the smarter way of trading now. Sign up on uTrade Algos and start your smooth algo trading journey today!

Frequently Asked Questions

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uTrade Algo’s proprietary features—advanced strategy form, one of the fastest algorithmic trading backtesting engines, and pre-made strategies—help you level up your derivatives trading experience

The dashboard is a summarised view of how well your portfolios are doing, with fields such as Total P&L, Margin Available, Actively Traded Underlyings, Portfolio Name, and Respective Underlyings, etc. Use it to quickly gauge your algo trading strategy performance.

You can sign up with uTrade Algos and start using our algo trading software instantly. Please make sure to connect your Share India trading account with us as it’s essential for you to be able to trade in the live markets. Watch our explainer series to get started with your account.

While algo trading has been in use for decades now for a variety of purposes, its presence has been mainly limited to big institutions. With uTrade Algos you get institutional grade features at a marginal cost so that everyone can experience the power of algos and trade like a pro.

On uTrade Algos, beginners can start by subscribing to pre-built algos by industry experts, called uTrade Originals. The more advanced traders can create their own algo-enabled portfolios, with our no-code and easy-to-use order form, equipped with tons of features such as robust risk management, pre-made algorithmic trading strategy templates, payoff graphs, options chain, and a lot more.

From single-leg strategies to complex portfolios, with upto five strategies, each strategy having up to six legs, uTrade Algos gives one enough freedom to create almost any auto trading strategy one likes. What’s more, is that there are pre-built algos by industry experts for complete beginners and pre-made strategy templates for those who want to try their hand at strategy creation.

An interesting feature that uTrade Algos is bringing to the table is a set of pre-built algorithms curated by top-ranking industry experts who have seen the financial markets inside out. These algorithms, called uTrade Originals, will be available for subscribers on the platform.

Algos have the capability to fire orders to the exchange in milliseconds, a speed which is impossible in manual trading. That is why traders leverage the power of algo trading to make their efforts more streamlined and efficient. You can try uTrade Algos for free for 7 days!

Claim your 7-day free trial!

Experience uTrade Algos on the web and mobile app without any commitment.

Knowledge Centre & Stories of Success

In the world of algorithmic trading, measuring performance goes beyond simply looking at profits. Here strategies are executed at lightning-fast speeds and hence, metrics beyond profits are needed to assess the robustness of it all. Among the various metrics, the PnL aka Profit and Loss is a critical metric that sheds light on the effectiveness of your algo trading strategy. 

Algorithmic trading has become increasingly popular among traders looking to automate their strategies and capitalise on market opportunities. With the rise of algorithmic trading platforms like the uTrade Algos algo trading app, traders have access to powerful tools and technologies to execute trades with precision and efficiency. However, to make the most of these tools, it's essential to optimise your algorithmic trades effectively. Let us explore seven essential tips for optimising your algorithmic trades using the app.

In algorithmic trading, where seconds can make a difference, having effective exit parameters is crucial for managing risk and improving the chances of returns. Global exit parameters serve as predefined rules or conditions that trigger the exit of a trade, ensuring disciplined and systematic trading. In this guide, we'll find out about the concept of global exit parameters, explore their significance in algo trading, and understand how they function in real-world trading scenarios.

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