IB demo system accuracy

B

biemster

Hi all,

After a small adventure on the forex markets and a break afterwards I'd like to get back in the trading game, so I started paper trading using the IB demo account in TWS. I know there is quite a difference between live and demo trading, but I am a bit worried that the IB demo feed is too far off for my needs. Especially Level II or DOM.

For example, when I look at the Bid Ask spreak for the most active US stocks I see a couple stock with more than 1% spread on a ~$20 dollar value and ~5M volume. A strategy trading this spread like DayTrader10 suggested in
http://www.elitetrader.com/vb/showthread.php?s=&threadid=244373
has high rate of success in this scenario, raking a few dollars every turn, see attachment.

Is this a true market condition or is this caused by the simulation inefficiency of IB demo sytem?
Are there better paper trading solutions around?
 

Attachments

The demo system uses faux data. The paper trading uses real data but in order to use that you need a funded live IB account first. The demo account is used to understand the functionality of the TWS platform, not to demo-trade the market. This has been described many times on this forum previously.
 
JamesL is spot on. Our demo is for prospective customers to test drive the platform. See how they like our order entry options, news and research facilities, and our suite of risk management tools. Market data is old and playing 24 hours a day. You cannot use it to test a strategy.
 
Thanks for your answers. I guess I did not formulate my question clear enough though. I know the demo account uses old data in contrast with real paper trading, but I was under the impression it was real (but old) data nevertheless. So my question was:
Are spreads larger than 1% on such high activity stock a true market condition or is this only in the faux data of the demo system?
 
biemster,

I've been through a week’s worth of our production data. The spread is never larger than $.02 on the TWS and is always consistent with the quote on Bloomberg. The spread is normally $.01. Because there isn't massive liquidity on the stock, a customer can artificially create a wide market in the demo system by lifting the offer or hitting the bid. MM don't react or refresh their prices after an execution in the demo environment. That will leave the market wide until the recorded market data updates.

I strongly encourage you to open an account and do your testing in the paper account which we provide free of cost.

Salvatore
 
Quote from IB Salvatore:

biemster,

I've been through a week’s worth of our production data. The spread is never larger than $.02 on the TWS and is always consistent with the quote on Bloomberg. The spread is normally $.01. Because there isn't massive liquidity on the stock, a customer can artificially create a wide market in the demo system by lifting the offer or hitting the bid. MM don't react or refresh their prices after an execution in the demo environment. That will leave the market wide until the recorded market data updates.

I strongly encourage you to open an account and do your testing in the paper account which we provide free of cost.

Salvatore
More...

I have an IB funded account. Yesterday I wanted to use the paper trading account to familiarise myself with the order entry on TWS. I was not able to get access to the live data feeds I have subscribed to, only delayed data.

Do I have to launch TWS on my real account simultaneously in order to access the live data feed?
 
Quote from justrading:

I have an IB funded account. Yesterday I wanted to use the paper trading account to familiarise myself with the order entry on TWS. I was not able to get access to the live data feeds I have subscribed to, only delayed data.

Do I have to launch TWS on my real account simultaneously in order to access the live data feed?
More...

You have to subscribe to the U.S. quote package on your main account and that should propagate to the paper account also.

It may say $10 a month for inactive users but I believe that is waived for the first 3 months.
 
Quote from comintel:

You have to subscribe to the U.S. quote package on your main account and that should propagate to the paper account also.

It may say $10 a month for inactive users but I believe that is waived for the first 3 months.
More...

Thanks, I have subscribed to that package but when I opened the paper trade account I did not have access to the feed.

I will try launching the real account first and see if that helps. I was hoping to avoid too many software packages running at the same time, they seem to be breeding like rabbits with 2 broker accounts. :)
 
Quote from justrading:

Thanks, I have subscribed to that package but when I opened the paper trade account I did not have access to the feed.

I will try launching the real account first and see if that helps. I was hoping to avoid too many software packages running at the same time, they seem to be breeding like rabbits with 2 broker accounts. :)
More...
no,there is no need for that, what symbol are you trying to access? Maybe it's not covered in the basic package

and the $10/mo is not waived
 
Quote from oldtime:

no,there is no need for that, what symbol are you trying to access? Maybe it's not covered in the basic package

and the $10/mo is not waived
More...

USO, I know it is covered because I can chart it in the real account, but when I try to in the paper trading account it says not allowed or something like that, and takes me to account management to subscribe.

I'm hesitant to subscribe in the paper trading account as I saw in the knowledge base that you can select whatever you want to subscribe to in the paper trading account and you will get charged for it. No sense paying twice for something.
 
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