How to Setup Execution Settings

Problem

You need to configure how your algorithm interacts with the market, including execution mode, exchange selection, broker integration, order types, and market-specific settings.

Prerequisites

• Basic algorithm configuration completed (Step 1)
• Position sizing configured (Step 2)
• Entry and exit conditions configured (Steps 3-4)
• Risk parameters configured (Step 5)

Execution Modes

Live Trading

Execute real trades with actual capital through broker integration.

{
  "executionSettings": {
    "mode": "live"
  }
}

Characteristics:

• Real money at risk
• Actual broker orders
• Real market impact
• Transaction costs apply
• Requires broker connection

When to Use:

• After successful paper trading
• Strategy is profitable
• Risk parameters are tested
• Comfortable with capital at risk

Prerequisites:

1. Broker account connected
2. Sufficient capital
3. Strategy backtested
4. Paper trading successful
5. Risk management in place

Paper Trading

Simulated trading with real market data but no real money.

{
  "executionSettings": {
    "mode": "paper"
  }
}

Characteristics:

• No real money at risk
• Simulated order execution
• Real market data
• No transaction costs (optional)
• No broker required

When to Use:

• Testing new strategies
• Learning the platform
• Validating algorithm logic
• Before going live
• Practicing risk management

Advantages:

• Risk-free testing
• Unlimited capital
• Fast iteration
• No emotional pressure

Limitations:

• No slippage (unless simulated)
• Perfect fills
• No market impact
• May not reflect live conditions

Backtest Mode

Test strategy against historical data.

{
  "executionSettings": {
    "mode": "backtest"
  }
}

Characteristics:

• Historical data only
• Fast execution
• No real-time data
• Statistical analysis
• Performance metrics

When to Use:

• Initial strategy validation
• Parameter optimization
• Historical performance analysis
• Strategy comparison

See How to Run a Backtest for details.

Mode Transition Guidelines

Recommended Path:

1. Backtest (1-2 weeks)

   • Validate strategy logic
   • Optimize parameters
   • Check historical performance

2. Paper Trading (2-4 weeks)

   • Test with real-time data
   • Verify order execution
   • Monitor performance
   • Adjust parameters

3. Live Trading (Start small)

   • Begin with minimum position sizes
   • Gradually increase exposure
   • Monitor closely
   • Scale up slowly

Exchange Selection

Choose which exchange to trade on.

NSE (National Stock Exchange)

{
  "executionSettings": {
    "exchange": "NSE"
  }
}

Trading Hours:

• Pre-Open: 09:00 - 09:15
• Regular: 09:15 - 15:30
• Post-Close: 15:40 - 16:00

Instruments:

• Equities (stocks)
• Equity derivatives (futures, options)
• Currency derivatives
• Debt securities

Symbol Format:

NSE:RELIANCE
NSE:TCS
NSE:INFY
NSE:NIFTY24DEC24500CE  // Options
NSE:NIFTY24DECFUT      // Futures

Characteristics:

• Largest exchange in India
• High liquidity
• Wide range of instruments
• Electronic trading

BSE (Bombay Stock Exchange)

{
  "executionSettings": {
    "exchange": "BSE"
  }
}

Trading Hours:

• Pre-Open: 09:00 - 09:15
• Regular: 09:15 - 15:30
• Post-Close: 15:40 - 16:00

Instruments:

• Equities (stocks)
• Equity derivatives
• Currency derivatives
• Debt securities

Symbol Format:

BSE:RELIANCE
BSE:TCS
BSE:SENSEX30

Characteristics:

• Oldest exchange in Asia
• More listed companies than NSE
• Lower liquidity than NSE
• Good for small/mid caps

MCX (Multi Commodity Exchange)

{
  "executionSettings": {
    "exchange": "MCX"
  }
}

Trading Hours:

• Morning: 09:00 - 17:00
• Evening: 17:00 - 23:30 (select commodities)
• Overnight: 23:30 - 11:30 (crude oil)

Instruments:

• Crude oil
• Natural gas
• Gold, silver
• Base metals (copper, zinc, etc.)
• Agricultural commodities

Symbol Format:

MCX:CRUDEOIL25JANFUT
MCX:GOLD25FEBFUT
MCX:SILVER25MARFUT
MCX:NATURALGAS25JANFUT

Characteristics:

• Commodity trading
• Extended hours
• High leverage
• Global price correlation

NCDEX (National Commodity & Derivatives Exchange)

{
  "executionSettings": {
    "exchange": "NCDEX"
  }
}

Trading Hours:

• Regular: 10:00 - 17:00 (most commodities)
• Varies by commodity

Instruments:

• Agricultural commodities
• Spices
• Oilseeds
• Pulses
• Metals

Symbol Format:

NCDEX:SOYBEAN25JANFUT
NCDEX:GUARSEED25FEBFUT
NCDEX:TURMERIC25MARFUT

Characteristics:

• Agricultural focus
• Seasonal patterns
• Weather-dependent
• Lower liquidity than MCX

Broker Selection

Choose which broker to use for order execution.

AngelOne

{
  "executionSettings": {
    "broker": "AngelOne"
  }
}

Features:

• SmartAPI integration
• Real-time market data
• Multiple order types
• Good API documentation

Rate Limits:

• 1 request per second per user
• Burst: 5 requests
• See AngelOne Troubleshooting

Connection Requirements:

1. AngelOne account
2. API key
3. Client ID
4. MPIN/Password

Supported Exchanges:

• NSE, BSE, MCX, NCDEX

Zerodha

{
  "executionSettings": {
    "broker": "Zerodha"
  }
}

Features:

• Kite Connect API
• Excellent documentation
• WebSocket support
• Large user base

Rate Limits:

• 3 requests per second
• 200 requests per minute

Connection Requirements:

1. Zerodha account
2. API key
3. API secret
4. Request token

Supported Exchanges:

• NSE, BSE, MCX, NCDEX

Upstox

{
  "executionSettings": {
    "broker": "Upstox"
  }
}

Features:

• Modern API
• Good performance
• Competitive pricing
• Mobile-first

Rate Limits:

• 10 requests per second
• 500 requests per minute

Connection Requirements:

1. Upstox account
2. API key
3. API secret
4. Access token

Supported Exchanges:

• NSE, BSE, MCX

Dhan

{
  "executionSettings": {
    "broker": "Dhan"
  }
}

Features:

• Modern platform
• Good API
• Options analytics
• Forever free

Rate Limits:

• 5 requests per second
• 300 requests per minute

Connection Requirements:

1. Dhan account
2. API key
3. Client ID
4. Access token

Supported Exchanges:

• NSE, BSE, MCX

Broker Comparison

Feature	AngelOne	Zerodha	Upstox	Dhan
Rate Limit	1/sec	3/sec	10/sec	5/sec
API Quality	Good	Excellent	Good	Good
Documentation	Good	Excellent	Good	Good
Market Share	High	Highest	High	Growing
Pricing	Low	Low	Low	Free

Order Types

Configure how orders are placed in the market.

Market Order

Execute immediately at best available price.

{
  "executionSettings": {
    "orderType": "market"
  }
}

Characteristics:

• Immediate execution
• No price guarantee
• Subject to slippage
• Best for liquid stocks

When to Use:

• High liquidity stocks
• Need immediate execution
• Scalping strategies
• Stop loss exits

Example:

Buy 100 shares of RELIANCE at market price
Current Ask: ₹2,500
Execution: ₹2,500 (or close to it)

Slippage:

• Low liquidity: 0.5-2%
• Medium liquidity: 0.1-0.5%
• High liquidity: 0.01-0.1%

Limit Order

Execute only at specified price or better.

{
  "executionSettings": {
    "orderType": "limit"
  }
}

Characteristics:

• Price guarantee
• May not execute
• No slippage
• Better for illiquid stocks

When to Use:

• Illiquid stocks
• Want specific price
• Swing trading
• Take profit exits

Example:

Buy 100 shares of TCS at ₹3,500 or lower
Current Ask: ₹3,510
Order Status: Pending (waiting for ₹3,500)

Execution Risk:

• May never execute
• Price may move away
• Opportunity cost

Stop Order

Trigger market order when price reaches stop level.

{
  "executionSettings": {
    "orderType": "stop"
  }
}

Characteristics:

• Triggers at stop price
• Executes as market order
• Subject to slippage
• Used for stop losses

When to Use:

• Stop loss orders
• Breakout entries
• Momentum strategies

Example:

Stop Loss: Sell 100 shares if price drops to ₹2,450
Current Price: ₹2,500
Price drops to: ₹2,450
Trigger: Market sell order
Execution: ₹2,448 (slippage)

Stop-Limit Order

Trigger limit order when price reaches stop level.

{
  "executionSettings": {
    "orderType": "stop_limit"
  }
}

Characteristics:

• Triggers at stop price
• Executes as limit order
• Price protection
• May not execute

When to Use:

• Stop loss with price protection
• Volatile markets
• Want to avoid slippage

Example:

Stop: ₹2,450
Limit: ₹2,445
Current Price: ₹2,500
Price drops to: ₹2,450
Trigger: Limit sell order at ₹2,445
Execution: Only if price >= ₹2,445

Risk:

• May not execute if price gaps down
• Could result in larger loss

Order Type Recommendations

Strategy	Entry	Exit (Profit)	Exit (Loss)
Scalping	Market	Limit	Market
Day Trading	Limit	Limit	Stop
Swing Trading	Limit	Limit	Stop-Limit
Position Trading	Limit	Limit	Stop-Limit

Slippage Configuration

Estimate slippage for backtesting accuracy.

{
  "executionSettings": {
    "slippage": 0.1  // 0.1% slippage
  }
}

What is Slippage?

Difference between expected price and actual execution price.

Example:

• Expected: ₹500
• Slippage: 0.1%
• Actual: ₹500.50 (buy) or ₹499.50 (sell)

Slippage by Liquidity

Liquidity	Slippage %	Examples
Very High	0.01-0.05%	RELIANCE, TCS, INFY
High	0.05-0.1%	Large caps
Medium	0.1-0.3%	Mid caps
Low	0.3-1%	Small caps
Very Low	1-5%	Penny stocks

Slippage by Order Type

Market Orders:

{
  "slippage": 0.1  // Higher slippage
}

Limit Orders:

{
  "slippage": 0.0  // No slippage (price guaranteed)
}

Impact on Backtesting

Without Slippage:

• Unrealistic results
• Over-optimistic performance
• May not work live

With Slippage:

• Realistic results
• Conservative estimates
• Better live performance prediction

Indian Market Settings

Configure India-specific features and regulations.

Enable Indian Market Settings

{
  "executionSettings": {
    "indianMarketSettings": {
      "enabled": true
    }
  }
}

Auto Square-Off

Mandatory square-off for intraday positions.

{
  "executionSettings": {
    "indianMarketSettings": {
      "enabled": true,
      "autoSquareOff": {
        "enabled": true,
        "minutesBeforeClose": 15
      }
    }
  }
}

How It Works:

NSE/BSE:

• Market Close: 15:30
• Square-off Time: 15:15 (15 minutes before)
• All intraday positions closed automatically

MCX:

• Market Close: 23:30
• Square-off Time: 23:15 (15 minutes before)

Example:

Time: 15:10
Open Positions: 3 intraday positions
Action: System starts closing positions
Time: 15:15
Status: All positions closed

Configuration Options:

{
  "autoSquareOff": {
    "enabled": true,
    "minutesBeforeClose": 15,  // 5-30 minutes
    "orderType": "market"      // or "limit"
  }
}

Product Type

Specify the type of trading product.

{
  "executionSettings": {
    "indianMarketSettings": {
      "productType": "intraday"
    }
  }
}

Product Types:

1. Intraday (MIS - Margin Intraday Square-off)

{
  "productType": "intraday"
}

Characteristics:

• Higher leverage (5-20x)
• Must close by EOD
• Auto square-off
• Lower margin requirements

Margin:

• Equities: 5-10x leverage
• Futures: 1.5-2x leverage

Use Case:

• Day trading
• Scalping
• Quick profits

2. Delivery (CNC - Cash and Carry)

{
  "productType": "delivery"
}

Characteristics:

• Full payment required
• No leverage
• Can hold overnight
• Delivery to demat account

Margin:

• 100% of trade value

Use Case:

• Long-term investing
• Swing trading
• Holding positions

3. BTST (Buy Today Sell Tomorrow)

{
  "productType": "btst"
}

Characteristics:

• Buy today, sell next day
• T+1 settlement
• Partial leverage
• No delivery to demat

Margin:

• 50-80% of trade value

Use Case:

• Short-term trading
• Overnight positions
• Quick swings

Rules:

• Minimum holding: 1 day
• Maximum holding: T+1 settlement
• Cannot sell before T+1

4. Futures (NRML - Normal)

{
  "productType": "futures"
}

Characteristics:

• Futures contracts
• Leverage (5-10x)
• Can hold till expiry
• Mark-to-market daily

Margin:

• SPAN + Exposure margin
• Typically 10-20% of contract value

Use Case:

• Hedging
• Speculation
• Leverage trading

5. Options (NRML - Normal)

{
  "productType": "options"
}

Characteristics:

• Options contracts
• Premium payment (buying)
• Margin requirement (selling)
• Can hold till expiry

Margin:

• Buying: Premium amount
• Selling: SPAN + Exposure margin

Use Case:

• Hedging
• Income generation
• Speculation

Circuit Breaker Handling

Configure behavior during circuit breaker halts.

{
  "executionSettings": {
    "indianMarketSettings": {
      "circuitBreakerHandling": "pause"
    }
  }
}

Options:

1. Pause

{
  "circuitBreakerHandling": "pause"
}

• Pause algorithm
• Keep positions open
• Resume when trading resumes

2. Exit All

{
  "circuitBreakerHandling": "exit_all"
}

• Close all positions
• Exit at market price
• Pause algorithm

3. Continue

{
  "circuitBreakerHandling": "continue"
}

• Keep algorithm running
• Wait for trading to resume
• Continue normal operation

Circuit Breaker Levels:

Level	Trigger	Action	Duration
10%	Index drops 10%	Halt 45 min	Before 1:00 PM
15%	Index drops 15%	Halt 1h 45min	Before 1:00 PM
20%	Index drops 20%	Halt rest of day	Any time

Avoid Pre-Open Session

Skip the pre-open session (9:00-9:15 AM).

{
  "executionSettings": {
    "indianMarketSettings": {
      "avoidPreOpen": true
    }
  }
}

Why Avoid:

• High volatility
• Price discovery
• Unpredictable moves
• Wide spreads

Recommendation:

• Enable for most strategies
• Disable for opening range breakouts

STT/GST Calculation

Include Securities Transaction Tax and GST in calculations.

{
  "executionSettings": {
    "indianMarketSettings": {
      "includeTaxes": true,
      "sttRate": {
        "intraday": 0.025,  // 0.025% on sell side
        "delivery": 0.1     // 0.1% on both sides
      },
      "gstRate": 18.0       // 18% on brokerage
    }
  }
}

STT Rates:

Product	Buy	Sell
Intraday Equity	0%	0.025%
Delivery Equity	0.1%	0.1%
Futures	0%	0.0125%
Options (Buy)	0%	0%
Options (Sell)	0.05%	0.05%

GST:

• 18% on brokerage
• 18% on transaction charges

Example Calculation:

Intraday Trade:

• Buy: ₹1,00,000
• Sell: ₹1,02,000
• Profit: ₹2,000
• STT (0.025% on sell): ₹25.50
• Brokerage: ₹40
• GST (18% on brokerage): ₹7.20
• Net Profit: ₹2,000 - ₹25.50 - ₹40 - ₹7.20 = ₹1,927.30

Complete Execution Settings Examples

Example 1: Paper Trading Setup

{
  "executionSettings": {
    "mode": "paper",
    "exchange": "NSE",
    "orderType": "market",
    "slippage": 0.1
  }
}

Use Case: Testing new strategy risk-free

Example 2: Live Day Trading (NSE)

{
  "executionSettings": {
    "mode": "live",
    "exchange": "NSE",
    "broker": "AngelOne",
    "orderType": "limit",
    "slippage": 0.05,
    "indianMarketSettings": {
      "enabled": true,
      "productType": "intraday",
      "autoSquareOff": {
        "enabled": true,
        "minutesBeforeClose": 15
      },
      "avoidPreOpen": true,
      "circuitBreakerHandling": "pause",
      "includeTaxes": true
    }
  }
}

Use Case: Intraday trading on NSE with auto square-off

Example 3: Commodity Trading (MCX)

{
  "executionSettings": {
    "mode": "live",
    "exchange": "MCX",
    "broker": "Zerodha",
    "orderType": "market",
    "slippage": 0.2,
    "indianMarketSettings": {
      "enabled": true,
      "productType": "futures",
      "autoSquareOff": {
        "enabled": true,
        "minutesBeforeClose": 15
      },
      "circuitBreakerHandling": "exit_all"
    }
  }
}

Use Case: Commodity futures trading with evening session

Example 4: Swing Trading (Delivery)

{
  "executionSettings": {
    "mode": "live",
    "exchange": "NSE",
    "broker": "Upstox",
    "orderType": "limit",
    "slippage": 0.1,
    "indianMarketSettings": {
      "enabled": true,
      "productType": "delivery",
      "autoSquareOff": {
        "enabled": false  // Can hold overnight
      },
      "avoidPreOpen": true,
      "circuitBreakerHandling": "pause",
      "includeTaxes": true
    }
  }
}

Use Case: Multi-day swing trading with delivery

Verification

After configuring execution settings, verify:

1. Mode is appropriate

   • Paper for testing
   • Live only after validation
   • Backtest for historical analysis

2. Exchange is correct

   • Matches your instruments
   • Trading hours are suitable
   • Liquidity is adequate

3. Broker is connected

   • API credentials are valid
   • Rate limits are understood
   • Connection is stable

4. Order type matches strategy

   • Market for speed
   • Limit for price control
   • Stop for risk management

5. Indian market settings are configured

   • Product type is correct
   • Auto square-off is enabled (if intraday)
   • Taxes are included

Troubleshooting

Broker Connection Failed

Problem: Cannot connect to broker.

Solutions:

1. Verify API credentials
2. Check broker account status
3. Ensure API is enabled
4. Check rate limits
5. Review broker documentation

Orders Not Executing

Problem: Orders are placed but not executing.

Solutions:

1. Check order type (limit may not execute)
2. Verify exchange trading hours
3. Check circuit breaker status
4. Ensure sufficient margin
5. Review broker logs

Auto Square-Off Not Working

Problem: Intraday positions not closing.

Solutions:

1. Verify autoSquareOff is enabled
2. Check minutesBeforeClose setting
3. Ensure product type is "intraday"
4. Check exchange trading hours
5. Review system logs

High Slippage in Live Trading

Problem: Actual slippage exceeds configured value.

Solutions:

1. Trade more liquid stocks
2. Use limit orders
3. Avoid market orders in illiquid stocks
4. Trade during high volume periods
5. Reduce position sizes

Circuit Breaker Triggered

Problem: Trading halted due to circuit breaker.

Solutions:

1. Wait for trading to resume
2. Check circuitBreakerHandling setting
3. Review positions
4. Adjust strategy if needed
5. Monitor market conditions

Related

• How to Debug Broker Connection
• Understanding Indian Market Specifics
• Understanding Broker Integration
• Execution Settings Schema Reference