Automate Trading strategy for IB on a cash account Limit Order Limitation

O

operationkite

I am looking for a software solution that I don't need to program to handle the following.

IB only let you enter an order if the sum of that order plus all other open orders are less than the settled cash (cash account). I don't think this makes sense since I use limit orders and we don't know if they will execute. Here is an example, say I have $100. I want to buy either Stock A which trades at $110 or StockB which trades at $120. I want to buy 1 share of either Stock A or StockB if they fall below $100. If I am in a cash account, this is not possible. If I enter a limit order for $100 for Stock A, IB will not let me enter in another limit order for StockB since it will state I don't have enough cash. The way it should work IMHO is I can enter in both orders and if 1 executes then the other is cancelled. I have spoken with IB several times and I don't see a way to handle this. Ideally I would scaletrader in IB but that doesn't work. Does anyone know a 3rd party service provider that can place trades on IB where I could place limit orders for an aggregate value greater than the cash on a cash account? ideally this would work like scaletrader.
 
This used to be possible, you could enter a large number of limit orders. There was a limit but it was very liberal. Nowadays it's simply not possible, you will need to monitor the orders in real-time or near real-time and only send the ones closest to execution. It's a lot of work, especially if you're dealing with many names.
On top of this, as this method is very much custom, I don't think a ready-made solution exists. Likely you need to hire an API programmer.
IB works like this, their risk department dictates everything. The needs of traders are insignificant.
 
d08 said:
This used to be possible, you could enter a large number of limit orders. There was a limit but it was very liberal. Nowadays it's simply not possible, you will need to monitor the orders in real-time or near real-time and only send the ones closest to execution. It's a lot of work, especially if you're dealing with many names.
On top of this, as this method is very much custom, I don't think a ready-made solution exists. Likely you need to hire an API programmer.
IB works like this, their risk department dictates everything. The needs of traders are insignificant.
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Thanks. I am concerned about hiring an API programmer b/c I don't want to debug and in the past even using IB's platform I would enter in order mistakes e.g. typos and buy vs sell. Do you have advice on this? perhaps I try with paper trading?
Any suggestions on hiring the API programmer? Thanks. Daniel
 
Why can’t you use margin account? Broker cannot guarantee that both orders will not be executed (like on news events), so they don’t allow you to place more at risk than you have.
 
qlai said:
Why can’t you use margin account? Broker cannot guarantee that both orders will not be executed (like on news events), so they don’t allow you to place more at risk than you have.
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Too risky when using an auto trading tool. If I or the tool make a mistake with buy vs sell or number of 0s the losses can be large. This happened to me before using a margin account and there was a margin call.
 
There’s no such service because you want both orders to be live at the same time, but brokers will not allow you to do that(exceed your buying power).
 
The closest I can think of is to have alerts set for multiple stocks and then send market(able) order for the one that triggers first.
 
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