Use Algoritms instead of Stop loss

AI & Machine learning
1

Hello, there:



I am starting with Algo trading, and I wonder… Is it possible to send orders to interactive brokers using algoritms?? 



I wonder that because… As many of you would probably know… Market Makers can see the stop loss orders that you place when you trade… so, I don't like to be using them… instead of that… I wonder maybe it is possible to use an algoritm instead… so that If one trade goes below certain level (let's say 97% of the entry price), then use an algoritm to place an order to close your position on that ticker… Is it possible to do so??



Thanks

2

Hi Ghery,



You can definitely make use of various algorithms to send out buy/sell orders to the Interactive Brokers platform.



We do cover the same in our course on Automated Trading with IBridgePy using Interactive Brokers Platform.



However, here are some additional resources that you might find interesting:



Webinar on Backtesting and Live Trading with Interactive Brokers using Python



Article on Algorithmic Trading with Python 



Youtube playlist on building an Algorithmic Trading System in Python



I hope this helps!

3

Thank you very much, But if you can actually send order using algorithms …



can you actually get around the manipulation of market makers??



I suppose the answes is yes…right??

4

Hey Ghery,



I'm assuming that by "getting around the manipulation of market makers" you imply that you do not want your pending buy/sell orders to be visible in the order book for a long duration.



If that is the case then yes, using algorithms can be very helpful as your buy/sell orders will be sent to the broker's platform and then to the exchange only once the strategy conditions you set have been successfully triggered.



For the order execution part, if you have set the order type as a "market" order, the order will be immediately executed and is not likely to be visible in the order book.



However do note, if you set your order type as a "limit" order, it may still show up on the order book for a certain duration. And the duration would depend on various factors such as the difference between the 'current market price' of the asset and the 'limit' price you've set, overall liquidity in the asset, etc.



I hope this clarifies your doubt.