Warrior Trading
The YouTuber was asked to review Interactive Brokers, but he declined due to a bad experience, which caused him to switch to Lightspeed. He had issues with order execution, and one trade took over a minute to execute, causing him to lose money. He shows reports and a video of the trade, and also mentions the security measures of Interactive Brokers. The YouTuber also criticizes Interactive Brokers’ trading limits on low average daily volume stocks.
Why I Will Never Trade with Interactive Brokers Again
Introduction
Many of you have asked about Interactive Brokers, and whether I would set up an account with them and test them out. Well, the truth is that I have already traded with Interactive Brokers last year, and it was a terrible experience. In this video, I will share my personal experience and explain why I will never trade with them again.
Poor Execution Times
Last year, when I traded with Interactive Brokers, I had the same problem as I had last week with E*TRADE – orders routinely took 20-30 seconds or more to execute. However, the final nail in the coffin for me with Interactive Brokers happened on April 26, 2018 when I had a trade on MTS L that took over one minute to execute.
The trade was a marketable limit order put at $2.50. The stock was trading at about $1.38 at the time. It took over a minute to execute, and finally filled shares at the top at $2.50. I wanted to get in because I believed the stock had the potential to make a move up towards $3.
However, it was very frustrating, and that was just my final straw. After that, I started looking for a new place to trade.
Better Options Available
The only reason I was using Interactive Brokers was because they offered settlement margin on a retirement account, and I was trading in a retirement account at that time. I have since moved that account to Lightspeed and grew it from $25,000 to just about $200,000 in about 18 months.
With Interactive Brokers, it took me four months to grow it from $6,000 to $25,000, and part of that was because of the issue I was having with executions.
Logging into Interactive Brokers
To demonstrate my experience with Interactive Brokers, I will log into my old account and show you the trade. I will also show you five minutes of my recap from April 26, 2018, where I explain in detail why I don’t use Interactive Brokers and why I don’t plan to go back.
Secure Login Process
One thing I will give Interactive Brokers credit for is that they have a very secure login process. I will type my login credentials, and as soon as I press enter, I will get an alert on my phone that I have to tap to authenticate the login.
I have to do it with my face, so until I have authenticated it, it will not let me login. With TD Ameritrade and E*TRADE, they will give you a two-step authentication trigger if you are logging in from an unfamiliar device or a different location. But, it’s not every single time.
Viewing Reports
Even though the account is closed, I can still go in and see my reports and statement. I will go to reports, then to trade confirmations, and then run reports. I will go right into the date that I know was the straw that broke the camel’s back, which is back on April 26.
The Nice Thing about Doing a Recap
Thanks to my $583 challenge, where I did a recap every single day, I can go back to that day on YouTube and go see what happened that day. When everyone was posting comments, I was able to find the video and take a clip of it.
Two Trades on MTS L
I will show you just two of the trades on MTS L – a buy order at $2.41 and a sell order at $2.66. The net profit was around $1,100, but I lost over $700 in slippage.
Buy Order Initiated at 9:40:24
Let’s look at the buy order. I initiated it at 9:40 and 24 seconds, and it took over a minute to fill entirely. That was because it just went extremely slowly for whatever reason. When I turned around to sell the shares, it also took about 20 seconds to sell the position, which is terrible.
Limited Ability to Buy Shares
I did reach out to Interactive Brokers after that because I was incredibly frustrated, angry, and just livid. They said that for stocks with low average daily volume, like MTS L, they limit your ability to buy shares.
It sounded like there was a cap on the number of shares you could buy relative to the previous day’s volume or some algorithm. Because of this, buying 4,800 shares took over a minute, which was problematic for me.
Conclusion
After that happened with MTS L, I was furious. I was angry and lost money in my main account. In my opinion, if I want to buy shares of a stock, I should be able to do that. If Warren Buffett wants to come in and take a position, he should be able to do that.
That’s why I will never trade with Interactive Brokers again. If you want to learn more about my experience with them, watch the video above, and watch my recap from April 26, 2018.
