Converting TradingView PineScript Alerts into Interactive Brokers Orders

Introduction

Although Interactive Brokers may lack built-in back-testing or forward-testing capabilities, these features can be incorporated using TradingView's strategy or indicator tools.

TradingView can generate alert messages based on specific trading strategies, which are then dispatched to a trading bot. This bot subsequently transmits orders to Interactive Brokers, thereby establishing a dynamic and efficient trading ecosystem.

TradingView

TradingView's PineScript language allows you to devise trading algorithms for testing and deployment in the markets. After crafting your algorithm, you can send its output to the trading robot using predefined JSON format messages.

To generate the alert messages in JSON from PineScript, you can create a PineScript Library that offers a custom function for constructing a JSON format message.

For instance, I've created this publicly available PineScript library: PineTradingbotWebhook — Library by AlphaCentauri66367

This PineScript Library can generate the following message:

{
    "timestamp": 1680795320618,
    "ticker": "AAPL",
    "currency": "USD",
    "timeframe": "5S",
    "key": "WebhookReceived:123456",
    "contract": "stock",
    "orderRef": "Short#1",
    "direction": "strategy.entryshort",
    "clientId": 1,
    "metrics": [
        {
            "name": "entry.stop",
            "value": 0.0
        },
        {
            "name": "entry.limit",
            "value": 0.0
        },
        {
            "name": "exit.limit",
            "value": 0.0
        },
        {
            "name": "exit.stop",
            "value": 0.0
        },
        {
            "name": "qty",
            "value": 100
        },
        {
            "name": "price",
            "value": 164.59
        }
    ]
}

Trading Robot

TradingView dispatches alert messages using the HTTPS protocol. To receive these alert messages, the trading bot needs an HTTP server. Upon receiving the alert messages, the trading bot decodes them and places orders with Interactive Brokers accordingly.

There are two types of APIs to choose from when placing orders: the TWS API and ib_insync.

TWS API: This official API from Interactive Brokers is used to access real-time market data, manage accounts, and send orders. Though powerful, the TWS API is comparatively low-level, requiring substantial programming knowledge for effective usage. It typically involves the utilization of two threads.

Ib_insync: A third-party Python library that serves as a high-level interface to the TWS API. Ib_insync leverages Python's async and coroutine support to simplify the API's complexities, offering a more Pythonic way to interact with Interactive Brokers.

In summary, the Trading Robot should comprise at least three parts:

1. HTTP server
2. Decoder for alert messages
3. Order Placement tools using TWS API or ib_insync API over IB Gateway or TWS workstation

Additional features including a reverse proxy, message brokers, and messaging applications can make the Trading Robot design more robust and modular.

We can visualize the platform as follows:

I have designed this platform, which I've named TradingBoat You can launch TradingBoat in just 5 minutes. Access it here:

GitHub - PlusGenie/ib-gateway-docker: Docker image with TBOT on TRADINGBOAT

The complete source code repositories for the components inside TradingBoat are also available as follows:

1. TBOT application: GitHub - PlusGenie/tbot-tradingboat
2. Customized TVWB (Flask) for TradingBoat: GitHub - PlusGenie/tradingview-webhooks-bot: a framework for trading with tradingview webhooks!
3. PineScript's TBOT library: PineTradingbotWebhook — Library by AlphaCentauri66367
4. PineScript examples using the TBOT library: GitHub - PlusGenie/tbot-pinescripts

For a user-friendly video tutorial, I highly recommend referring to the comprehensive Udemy course available here: Link to Udemy Course.