On Sun, Feb 2, 2020 at 12:59 AM, Francois G wrote:
On Sat, Feb 1, 2020 at 09:06 AM, Edward wrote:
the Paper account is VERY similar to the real execution
Edward, I would not be as optimistic as you... Maybe with SPY, or one cent bid/ask spread, but when dealing with stocks, a midpoint limit order is likely to be filled on real trading, while paper trading platform still waits for the bid/ask (worst) price to be filled...
My experience with IB's paper trader is that it is pretty useless for simulating order execution.? The real wonder of the paper trader is not that it works well, but that it works at all.? When you think about what happens in the marketplace during execution, especially in the highly fragmented environment of USA stocks, it becomes more apparent.? If you have a marketable order working, nobody can see it but you because it doesn't really exist. The paper trader needs a trade-through, or at least a number of trades at your price, to make a reasonable guess whether you get a fill.
For pretty much the same reason, the paper trader is also not very useful for testing if a system is profitable.? The one exception I would make is that if paper trading shows a loss, it's probably time to scrap the system.
[rwk]
