SIMULATED TRADING
The paper trading account allows traders to test the full range of TWS trading facilities in a simulated environment using real market conditions. Use this test environment to:
- Learn TWS features without risk, including different order types and algos.
- Learn market dynamics in new exchanges and products.
- Simulate and test trading strategies.
- Test your Application Program Interface (API) solutions.
Creating a Paper Trading Account
- The PaperTrader is linked to your TWS production account. To create a paper trading account, log into the Account Management and use the Trading Access menu.
- Accounts are created within 24 hours under normal business circumstances. You will be notified by email when the account is ready for trading.
- Paper trading accounts are only available after your production trading account has been approved and funded.
Accessing Your Paper Trading Account
- Once your paper trading account is active, you can log in from the TWS login box using your PaperTrader username and password.
- Please save and protect the PaperTrader user ID and password in the same way you would protect other confidential password information.
How It Works
- The TWS PaperTrader works just like your production account. You can use most TWS order types, trade all contracts available through the TWS, and experiment with almost every aspect of the TWS platform.
- The PaperTrader interface clearly indicates that you are working in a simulated account. If you do not see this, you are trading in your production account and will be liable for all trades that fill.
- Trades entered into this paper trading account will not actually execute on any exchange or settle at a clearing house. However, the price of your executions will be determined by real market prices and sizes.
- Trading permissions, market data subscriptions, base currency, and other account configurations are the same as specified for your regular account.
- A paper trading account statement will be provided each day and is available by logging into Account Management with your PaperTrader login and accessing the Report Management menu.
- All customers will start with USD 1,000,000 of paper trading Equity with Loan Value, and this equity will fluctuate as if the trades had executed in the real market.
- You may reset your cash equity at any time by accessing Account Management for your paper trading account and selecting Trading Access/Paper Trading Account Reset. Your account will be reset to USD 1,000,000. Please note that reset requests should be entered before 16:00 ET in order to take effect for the next business day.
Limitations of the PaperTrader
Although the paper trading account simulates most aspects of a production TWS account, you may encounter some differences due to its construction as a simulator with no execution or clearing abilities. These differences include but are not limited to:
- No support for some order types including: VWAP, Auction, RFQ, and Pegged to Market.
- Fills are simulated from the top of the book; no deep book access.
- Limited combo and EFP trading.
- Stops and other complex order types are always simulated in paper trading; this may result in slightly different behavior from a TWS production account.
- Penny trading for US Options is not supported. You will be able to submit the order but it will not receive a penny fill.
- The trade simulator will reject the remainder of any exchange-directed market order that partially executes. This may or may not match behavior of a real-world exchange. Market orders received while there is no quote on the opposite side will be held until the market data arrives (i.e. until the first partial fill).
- Mutual Fund trading is not supported via IB PaperTrader.