IB is not for new future traders

[hurricane_sh]

I made so many mistakes since I started trading futures 4 years ago, I wish I knew this earlier, so I want to tell new traders my lessons.

IB is a very good broker in many ways, but not suitable for new traders, here is why:

1. IB requires high margins, as a new future trader, you will very likely blow up a few accounts. The smaller accounts you open, the better. Trade small, trade tiny, one MES contract only before you can make money consistently.

2. TWS is not convenient to define different strategies, add stop losses, especially if you want to scalp. It's just not natural to do all those things.

3. You can't set a daily loss limit. This is extremely important for new traders.
I lost over $100K, if I can setup a loss limit, even as big as $200, there is no way I can lose so much money.

All of these are not IB's fault, but you may be able to avoid these mistakes if you use a different broker.

 

[FrankInLa]

Competition speaking? Just curious how low the probability that minutes after another thread was opened by a beginner showing interest in IB your thread pops up.

1) disagree. Same contract, different brokers or account sizes, same absolute pnl. It's actually a good thing to enforce a higher account size and higher minimum margin for beginners to prevent them from overtrading. The pnl is identical regardless of account size or margin requirements.

2) I don't see what is inconvenient. I have used TWS and the gateway for over 10 years. You can set stops and target levels manually, or pre-configured and submit bracket orders. You can use a different frontend or your own api that interfaces with IB. You can configure key shortcuts.

3) you don't need a broker to adhere to a daily loss limit. If you can't set your own loss limit and set stops that are in agreement with your own loss limits and act accordingly then you perhaps should not trade yet but rather learn more beforehand. Nobody holds a traders hands. I don't see how this feature you listed as missing is beneficial to traders. Though again, some frontends that interface with IB have it.

I made so many mistakes since I started trading futures 4 years ago, I wish I knew this earlier, so I want to tell new traders my lessons.

IB is a very good broker in many ways, but not suitable for new traders, here is why:

1. IB requires high margins, as a new future trader, you will very likely blow up a few accounts. The smaller accounts you open, the better. Trade small, trade tiny, one MES contract only before you can make money consistently.

2. TWS is not convenient to define different strategies, add stop losses, especially if you want to scalp. It's just not natural to do all those things.

3. You can't set a daily loss limit. This is extremely important for new traders.
I lost over $100K, if I can setup a loss limit, even as big as $200, there is no way I can lose so much money.

All of these are not IB's fault, but you may be able to avoid these mistakes if you use a different broker.

 

[hurricane_sh]

Competition speaking? Just curious how low the probability that minutes after another thread was opened by a beginner showing interest in IB your thread pops up.

I know my thread may look bad, but I speak from my heart. I'm in big trouble financially, if my thread can benefit one person, it's worth it.

I don't want to argue with you, actually your post proved my points perfectly: IB is not for new traders.

 

[FrankInLa]

Definitely not for traders who grow a 200 dollar loss into a 100k loss without cutting positions... Good luck to you.

I know my thread may look bad, but I speak from my heart. I'm in big trouble financially, if my thread can benefit one person, it's worth it.

I don't want to argue with you, actually your post proved my points perfectly: IB is not for new traders.

 

[RubberBand]

With regards to point 1, I think the high initial margin is offset by the high maintenance margin. Right now for MES, the initial is 3.6k, and the maintenance is 2.9k. This should mean that you're automatically liquidated if you drop below this 2.9k of funds in your account if you're in an MES trade. Then, you couldn't even put on another trade anyway since you would need 3.6k in order to open the trade.

But I understand that the micros have only been trading for less than a year, so it wouldn't have helped that much in the past 4 years. If you of course started with 50k in your account, and especially when the margins were lower, then yes, you could have easily lost 45k of this. But by putting in just a bit more than the initial margin, you would be protecting capital since there would be an extra step to always having to deposit more.

But I agree with you that IB TWS isn't that great for day trading in terms of platform usability. Sierra Charts is a million times better, but this on its own will not help make you profitable unfortunately.

 

[southall]

I lost over $100K, if I can setup a loss limit, even as big as $200, there is no way I can lose so much money.

Take some responsibility for your own actions.

You always had the option to stop trading when ever you wanted, you lost $100K because you chose too.

My guess you were gambling and couldnt stop yourself.

 

[NewTraderAdventure]

"But I agree with you that IB TWS isn't that great for day trading in terms of platform usability. Sierra Charts is a million times better, but this on its own will not help make you profitable unfortunately."


ok, show us why

 

[HobbyTrading]

I'm in big trouble financially

That must be the result of your actions. I don't think that you can put that blame on IB (or any other broker for that matter).

 

[maxinger]

1. IB requires high margins,
right. margin requirement is relatively high.


2. TWS is not convenient to define different strategies, add stop losses, especially if you want to scalp. It's just not natural to do all those things.

They have it just that they don't have those ONE CLICK button.


3. You can't set a daily loss limit. This is extremely important for new traders.
I lost over $100K, if I can setup a loss limit, even as big as $200, there is no way I can lose so much money.

You should set hard stop for each and every trades.

---------------------

There are pros and cons using IB.
after 3 decades, I still use IB.

do try other brokers

 

[FrankInLa]

IB has not been in existence 3 decades ago

1. IB requires high margins,
right. margin requirement is relatively high.


2. TWS is not convenient to define different strategies, add stop losses, especially if you want to scalp. It's just not natural to do all those things.

They have it just that they don't have those ONE CLICK button.


3. You can't set a daily loss limit. This is extremely important for new traders.
I lost over $100K, if I can setup a loss limit, even as big as $200, there is no way I can lose so much money.

You should set hard stop for each and every trades.

---------------------

There are pros and cons using IB.
after 3 decades, I still use IB.

do try other brokers