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Orders getting rejected

I have an algorithm running live on IB. It started this morning. I am getting Red Toast "Order rejected by brokerage. Potential Pattern Day Trading" or something like that. I admit this algorithm makes a lot of trades. Has anyone else heard of this rejection by the brokerage?
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https://www.interactivebrokers.com/en/index.php?f=4745&p=daytrade1

seems you need to have enough cash in your account.
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Are you trading equity? For accounts under 25k there is the Pattern Day Trading Rule for margin accounts at most (all?) american brokerages. Likewise, you must also keep in mind the T+3 rule for equity. You can get around the PDT by using a pure cash account. You can get around the T+3 rule by buying options instead (which have T+1). However, please note that options have a higher spread and decrease in value over time due to the time-value. Likewise, if you decide to make your account a pure cash account only, mind you that then you are not allowed to short stocks anymore.

I hope that helps you out.

For further reference: https://www.interactivebrokers.com/en/index.php?f=4745&p=daytrade
Note that IB is doing you a huge favour by rejecting your order: the official fine for violating the PDT is a 90-day freeze of your account.

On this topic, IB states the following:

IB has created algorithms to prevent small accounts from being flagged as day trading accounts, to avoid triggering the 90 day freeze. IB implements this by prohibiting the 4th opening transaction within 5 days if the account has less than 25,000 USD in equity.
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@JPB and @Christoffer Thanks for the info.

Yes that is the case. I only funded $10k so that I could make sure the account works and to find out any problems like this one before using a larger amount.

I am stopping the algorithm until I get it sorted out.

Unfortunately, QC is still working on Options.
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For options I think IB only allows this if you have 2 years experience of trading options.

Not sure how they are checking that, I am trading options at another broker because of that rule.
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A few years ago IB wasn't so smart about it :) I was blocked for 90 days once. It gives you lots of time to work on the algorithm! Thankfully they also unblock you by depositing more than $25k.
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The material on this website is provided for informational purposes only and does not constitute an offer to sell, a solicitation to buy, or a recommendation or endorsement for any security or strategy, nor does it constitute an offer to provide investment advisory services by QuantConnect. In addition, the material offers no opinion with respect to the suitability of any security or specific investment. QuantConnect makes no guarantees as to the accuracy or completeness of the views expressed in the website. The views are subject to change, and may have become unreliable for various reasons, including changes in market conditions or economic circumstances. All investments involve risk, including loss of principal. You should consult with an investment professional before making any investment decisions.


@Christoffer When I opened the account, both they and Tradier just asked me if I had 2 years experience. I am not sure how they check further than that.

Are you trading options through QC at Tradier then? I was under the impression that they do not have option trading available.
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Nope, trading manually through a Dutch broker, Degiro.
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@Christoffer You like DeGiro? Heard from a friend that a while back they didn't even have limit orders yet (because they are that young).
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They have limit orders but not say market on close, which IB has.

Degiro is very basic, but cheap. One option is 0.5 eur approx + expenses to the exchange. I trade Danish and Swedish options there.
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@Christoffer After reading the Degiro documentation, it is not clear to me whether they will allow day trading or not. The seem to have a special type of account for day traders. On the other hand, the margin requirements page is not clear as to what the formula is.
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I just wonder whether you can use the paper trading account in IB to test your algorithm?

I haven't done that yet since I am still working on some details in my code.
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I would think you can. In my last experiences the IB paper trading account received its own username & password and was then linked to a primary account for data services (if necessary).
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The material on this website is provided for informational purposes only and does not constitute an offer to sell, a solicitation to buy, or a recommendation or endorsement for any security or strategy, nor does it constitute an offer to provide investment advisory services by QuantConnect. In addition, the material offers no opinion with respect to the suitability of any security or specific investment. QuantConnect makes no guarantees as to the accuracy or completeness of the views expressed in the website. The views are subject to change, and may have become unreliable for various reasons, including changes in market conditions or economic circumstances. All investments involve risk, including loss of principal. You should consult with an investment professional before making any investment decisions.


Yes you can definitely use IB paper trading to test the algorithm -- and you can set your paper trading account to more than $25k so PDT doesn't matter :)
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The material on this website is provided for informational purposes only and does not constitute an offer to sell, a solicitation to buy, or a recommendation or endorsement for any security or strategy, nor does it constitute an offer to provide investment advisory services by QuantConnect. In addition, the material offers no opinion with respect to the suitability of any security or specific investment. QuantConnect makes no guarantees as to the accuracy or completeness of the views expressed in the website. The views are subject to change, and may have become unreliable for various reasons, including changes in market conditions or economic circumstances. All investments involve risk, including loss of principal. You should consult with an investment professional before making any investment decisions.


@Christoffer I agree with Jared. That is how I missed PDT and T-3. In paper trading I had the account set at the default which is like $1,000,000. The algorithms worked great in paper trade. When I tried to trade with $10k, I got into trouble. If I had a $1MM, I would probably not be here. :o)

@Ray I believe the paper trade is actually a second account, so that you have two accounts. You cannot log into them simultaneously. If you log into regular account with TWS, and then start a paper trade algorithm on QC, you get an error that IB cannot log you in. (and vice versa) If you log into one account on the web site or with TWS, it automatically logs you out of the other.

@Jared Yes the $25K test will pass, but I doubt if paper trade enforces the T-3 margin or 6% requirements. If you fund your live account to say $30k, so you have some draw down room, I believe you still cannot trade more than $20k (4x excess margin) in volume for the day without violating the free ride test. Please tell me I am wrong.
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@Jared, @Ray, @Christoffer I have a follow up to this thread. I contacted IB and asked more specifically about the $25k rule. Here is the reply.

An account with a Securities Net Liquidation Value 25,000.00 USD or greater will automatically be granted un-limited day trading privileges. That being stated, to be designated as a Pattern Day Trader, 4 day trades must have occurred in the account within a five day business period in the past 90 days. A PDT designation remains on the account for 90 day business days. from classification date.

A PDT violation occurs when you have done 4 day trades in a 5 day business period within the past 90 days, AND your Securities Net Liquidation Value is below or has fallen below 25,000.00 USD within that same 90 day period.

A possible liquidation can occur at anytime your Excess Liquidity figure is negative. Additionally, you will need to monitor SMA figure with respect to end of day Reg.T margin requirements. SMA (Special Memorandum Account) can be used as a barometer as to whether or not you can hold new open positions overnight. If the SMA figure is negative, this is the amount you do not have to hold a position overnight. In other words, you do not meet Reg.T margin requirements at end of day, 3:50pm EST. If your SMA is negative, then liquidations will be transacted at or after 3:50pm EST. Therefore, you will need to close positions to bring SMA to zero or positive prior to 3:50pm EST.

Anyone know about SMA and how to monitor it? The 3:50 EOD is also interesting. It appears one has to be flat before 3:50pm EST. I will adjust my algorithm so that my SellAtEOD function starts at 3:45pm instead of 3:50.
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I found this link on IB web site. http://ibkb.interactivebrokers.com/node/66
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Hi,

Is there a way to perform the rounding according to the Symbol requirements before I place the order? 

I mean, instead of hard coding the rounding digits by symbol myself, is there any function that can perform that for me?

Thanks,

Below are two sample warnings:

2017-11-20 09:45:00 Warning: To meet brokerage precision requirements, order StopPrice was rounded to 1.16252 from 1.1625242077330199800

2017-11-20 19:54:01 Warning: To meet brokerage precision requirements, order StopPrice was rounded to 130.585 from 130.58502686162018200
 

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Found the solution to my question. Adjusting to rounding requirements can be done with this code:

var increment = _portfolio.Securities[pair].PriceVariationModel.GetMinimumPriceVariation(_portfolio.Securities[pair]);
if (increment != 0)
{
stopLossPrice = Math.Round(stopLossPrice / increment) * increment;
}
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Erik Bengtson, those warning are telling you that the engine is doing the rounding.
It was introduced because some brokerages only accept rounded prices and we didn't want users to worry about it, so the engine does the job and sends a warning so that the user knows that the price it was calculated was slightly modified.

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The material on this website is provided for informational purposes only and does not constitute an offer to sell, a solicitation to buy, or a recommendation or endorsement for any security or strategy, nor does it constitute an offer to provide investment advisory services by QuantConnect. In addition, the material offers no opinion with respect to the suitability of any security or specific investment. QuantConnect makes no guarantees as to the accuracy or completeness of the views expressed in the website. The views are subject to change, and may have become unreliable for various reasons, including changes in market conditions or economic circumstances. All investments involve risk, including loss of principal. You should consult with an investment professional before making any investment decisions.


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The material on this website is provided for informational purposes only and does not constitute an offer to sell, a solicitation to buy, or a recommendation or endorsement for any security or strategy, nor does it constitute an offer to provide investment advisory services by QuantConnect. In addition, the material offers no opinion with respect to the suitability of any security or specific investment. QuantConnect makes no guarantees as to the accuracy or completeness of the views expressed in the website. The views are subject to change, and may have become unreliable for various reasons, including changes in market conditions or economic circumstances. All investments involve risk, including loss of principal. You should consult with an investment professional before making any investment decisions.


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