How To Open An Interactive Brokers Demo Account

How to open an IBKR Paper trading account

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With the initial 1,000,000 USD of paper trading equity available in Interactive Broker's paper account accounts, you can test out the entire suite of IB trading facilities in a simulated setting with actual market conditions.

Recall that opening an approved regular trading account is a prerequisite for opening a demo account with the Interactive broker. A paper trading account can be opened after your live trading account has been successfully opened. Via the account portal of an active account, you can create an Interactive Paper Trading account. Below are the steps to take when opening an Interactive Brokers demo account.

Step 1: On the live trading account portal, click the heading shoulder icon and select Settings from the dropdown that ensures.

Opening Interactive Brokers demo account

Step 2: On the next prompt, scroll down and click on the paper trading option

Opening Interactive Brokers demo account

Step 3: Since the interactive paper trading account demands separate login details from the live account, enter a new username and create a password. Click Continue

Opening Interactive Brokers demo account

Step 4: The next display is the confirmation section; click okay

Opening Interactive Brokers demo account

Step 5: Set the live account market data subscription to share with the newly created Interactive Brokers paper account. Select the paper trading account to commence.

Opening Interactive Brokers demo account

To avoid paying a separate fee for the simulated account, traders can share their market data subscription for a live account with their paper trading account. If the market data is shared, the user cannot actively use it simultaneously for the two accounts.

Step 6: On the next prompt, select yes to share the real-time market data subscriptions with the Interactive broker's paper trading account. After that, choose the username whose market data you wish to share and click save to continue.

Opening Interactive Brokers demo account

Step 7: Use your preferred trading platform (Trader workstation, TWS, or IBKR mobile app) to begin simulating trading. Before logging in, select paper trading and click on simulated trading.

Opening Interactive Brokers demo account

How to configure an IBKR paper trading account

From the above section, step 6 shows how you can configure your account to share real-time market data with your paper trading account, your username and account number, or reset your password.

Furthermore, a novice trader may struggle to start using the IBKR paper trading account at first because there are a lot of panels and a dark background to the interface. You can change the background color by following the tips below.

Step 1: Ensure you are logged in with your paper trading account.

Configuring an IBKR paper trading account

Step 2: On the  top left menu, click on files and scroll to global configuration

Configuring an IBKR paper trading account

Step 3: Go to Display and select style to change or adjust the application color display, then select apply

Configuring an IBKR paper trading account

Step 4: Change the font size by clicking the font sizing button near the Contact Us button. Adjust to the preferred font size.

Configuring an IBKR paper trading account

You can see the change as the heading panels have a white background color.

To make trading more user-friendly, you can set hotkeys for bracket orders for easy navigation within the trading platform.

1. First, access the hotkey settings. Click on files and select global settings

Configuring an IBKR paper trading account

2. Go to the charts, select settings, and under chat trader, select hotkeys

Configuring an IBKR paper trading account

3. From the options in the Create Orders menu, select any operation to set a shortcut. For example, select buy and click on Create shortcut

Configuring an IBKR paper trading account

4. On the next prompt, select Record, then the key combination you prefer (e.g., ctrl+1)

Configuring an IBKR paper trading account

5. Customize the order depending on your trading strategy and click "ok" to complete the process.

Configuring an IBKR paper trading account

IBKR paper trading account overview

The term "IBKR paper trading" describes the Interactive Brokers' virtual or simulation-based trading environment. Without having to risk real money, users can practice trading strategies, place trades, and get acquainted with the different aspects of the Interactive Brokers trading platform. It is the perfect platform for honing your trading skills.

Advantages of an Interactive Brokers Paper trading account

Below is the top of the interactive broker account.

• Novice traders can gain knowledge about the financial markets, understand order types, track market movements, and get a feel for the trading platform through paper trading.

• Before using actual money, traders can utilize paper trading accounts to see what works and what does not in a simulated setting.

• With paper trading, people can test out various risk management strategies—like stop-loss orders and position sizes—without having to worry about the real financial repercussions.

• In a simulated setting, paper trading enables people to practice self-control, patience, and discipline.

Features of  IBKR paper trading account

Below are the features of the IBKR paper trading account.

• Real-time market data is usually available for paper trading with Interactive Brokers. Demo accounts from Interactive Brokers incorporate risk management tools, charts, and other crucial trading indicators.

• Options, futures, stocks, and more are among the asset classes that can be traded on IBKR's paper trading account.

• Within the paper trading platform, Interactive Brokers may offer instructional materials and resources to assist users in learning about trading tactics, market analysis, and platform features.

• Clients using the paper trading account can ask questions and get assistance from Interactive Brokers by contacting customer support.

Limitations of  IBKR paper trading account

Here are a few restrictions that come with an interactive paper trading account.

• Paper trading is not real money trading, and there might be variations in trade execution and market liquidity from live trading.

• Certain order types are not processable. VWAP, Auction, RFQ, and Pegged to Market are top examples of order types absent in an interactive paper trading account

• In live trading, there is a possibility of slippage, which is defined as the discrepancy between the expected and execution prices. Paper trading accounts might not accurately simulate this aspect of trading on the actual market.