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Contributor: Interactive Brokers

Level: Intermediate

This course introduces the user to several algos available in TWS and provides a detailed overview of several complex orders that can help maximize your returns by providing a better fill at the most advantageous destination subject to customized rules.

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Lesson: #1 ScaleTrader

This algo allows the user to determine the number of shares to be bought each time the market drops by a user-defined amount. This lesson teachers viewers the mechanics of buying weakness and selling strength according to the configurability of ScaleTrader. As with other IBKR algos, this order type has the functionality to break down large orders into small pieces and minimize market impact. The ScaleTrader also features a Profit Taker, enabling the user to set up a series of buy orders with opposing sell orders that would trigger in the event that the share price regained a user-defined amount after each fill.

Lesson: #2 VWAP

For investors wanting to track and trade according to price and volume patterns, this lesson explains how to create Volume Weighted Average Price or VWAP orders.

Lesson: #3 Accumulate/Distribute

This lesson will show you the Accumulate/Distribute algo which can help you to achieve the best price for a large volume order without being noticed in the market, and can be set up for high frequency trading. By slicing your order into smaller randomly-sized order increments that are released at random time intervals within a user-defined time period, the algo allows the trading of large blocks of stock and other instruments without being detected in the market.

Lesson: #4 Adaptive

This lesson will explore the Adaptive Algo which is designed to ensure that both market and aggressive limit orders trade between the bid and ask prices. On average, using the Adaptive algo leads to better fill prices than using regular market or limit orders. This algo order type is most useful to an investor when the spread is wide, but can also be helpful when the spread is only one tick.

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