IBKR with BackTrader – Part I" width="" />
This post is a part of the series “Building Your Automated Strategy with IBKR: From Back Testing to Paper Trading to Live Execution”.
Backtesting assesses the viability of a trading strategy by discovering how it performed using historical data.
Backtrader is a Python library that allows backtesting and strategy development before live trading. (see: https://www.backtrader.com/docu/) .
It is an open-source framework that enables strategy testing using historical data. Furthermore, it can be used to optimize strategies, create visual plots, and can also be used as a trading engine for actual trading in the market. It has an active community providing support and help for people using the platform (see: https://community.backtrader.com)
Backtrader has a robust integration with Interactive Brokers for historical data, paper trading and live trading. But the current implementation has not been updated for many years.
This article presents an updated integration, and describes how it can be seamlessly installed into Backtrader so that it can be used with the latest version of the IB Native API.
The Interactive Brokers Python TWS API allows you to trade via a running TWS (or IB Gateway) using Python code.
Acting as a bridge, the API allows for sending of orders from custom software or scripts, receiving live or historical data. Note that all the orders are reflected in the TWS frontend.
There are four basic steps to getting started:
Open the account at Interactive Brokers (using https://www.interactivebrokers.com/en/pagemap/pagemap_newaccounts_v3.php) and download and install TWS.
You can download the TWS API by navigating to Technology – Trading APIs – Get API Software, or by following this link – http://interactivebrokers.github.io/
Create a directory named back_testing, and copy the downloaded file twsapi_macunix.1016.10.zip into this directory, unzip and it will create the IBJts directory.
Create And Enable A Python Virtual Environment within the back_testing directory
python3 -m venv ./env source ./env/bin/activate Drill down to the directory back_testing/IBJts/source/pythonclient and run:
python setup.py install
To check if it is installed correctly, open a Python terminal and type:
Python 3.8.10 (default, Jun 22 2022, 20:18:18) [GCC 9.4.0] on linux Type "help", "copyright", "credits" or "license" for more information.>>> import ibapi >>> If no errors appear, the install was successful!
There is no special requirement for installing the BackTrader library. It also doesn’t have any dependencies. You can install this library by using the package manager “pip”.
pip install backtrader
Now you can use backtrader with its full functionality.
To check if it is installed correctly open a Python terminal and type:
Python 3.8.10 (default, Jun 22 2022, 20:18:18) [GCC 9.4.0] on linuxType "help", "copyright", "credits" or "license" for more information.>>> Import backtrader as btIf no errors appear, the install was successful.
Download and Install the updated IB TWS integration
Either clone the github repo:
git clone https://github.com/atreyuxtrading/atreyu-backtrader-api.git Or download a released version:
wget https://github.com/atreyuxtrading/atreyu-backtrader-api/archive/refs/tags/v1.0.zipUnzip file, and install the Atreyu Backtrader API.
unzip v1.0.zipcd atreyu-backtrader-api-1.0 ; python setup.py installCheck Settings of Locally Running TWS
Example: Download Realtime Bar Data from TWS
Stay tuned for the next installment in this series to learn how to set up Backtrader with the latest TWS API.
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This material is from Atreyu Trading Services and is being posted with its permission. The views expressed in this material are solely those of the author and/or Atreyu Trading Services and Interactive Brokers is not endorsing or recommending any investment or trading discussed in the material. This material is not and should not be construed as an offer to buy or sell any security. It should not be construed as research or investment advice or a recommendation to buy, sell or hold any security or commodity. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.
The order types available through Interactive Brokers LLC's Trader Workstation are designed to help you limit your loss and/or lock in a profit. Market conditions and other factors may affect execution. In general, orders guarantee a fill or guarantee a price, but not both. In extreme market conditions, an order may either be executed at a different price than anticipated or may not be filled in the marketplace.
Throughout the lesson, please keep in mind that the examples discussed are purely for technical demonstration purposes, and do not constitute trading advice. Also, it is important to remember that placing trades in a paper account is recommended before any live trading.
IBKR ForecastTrader lets you use exchange-listed Forecast Contracts1 to trade your opinion on Yes or No questions on economic and climate indicators, plus you’ll earn 4.83% APY 2 on your investment with an incentive coupon.
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Securities or other financial instruments mentioned in the material posted are not suitable for all investors. The material posted does not take into account your particular investment objectives, financial situations or needs and is not intended as a recommendation to you of any particular securities, financial instruments or strategies. Before making any investment or trade, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice. Past performance is no guarantee of future results.
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