Virtual trading
Deploy strategies with virtual funds
Virtual trading - also known as paper trading, this is a method to trade your strategy with no downside risk by using virtual funds. Keep in mind that even though the backtest results may have been excellent, as historic data is known there is a chance that your strategy may have been over optimised to the past therefore it is always recommended to virtual trade for a short time before deploying and trading live with your integrated broker accounts.
Paper trading provides insight and improves skill sets at every step in a trader's journey, from novice to market professional. With no associated risk, traders can observe any flaws in strategy and begin the arduous task of building a well-defined trading edge before any capital is risked.
Step 1: Connect to Alpaca
From the option in the header, click to connect your broker account (Alpaca for virtual trading) with Level2. Signing up on Alpaca is absolutely free of cost and orders from Level2 will be executed on Alpaca. Use this link to signup on Alpaca.
After you fill the Signup form, verify your email and then login to your Alpaca account.
You will be asked to setup a 2FA to your account. Download a compatible authenticator app to comply with the same. We recommend Google authenticator, but you can choose any of your preference.
Once authenticated, you will see the confirmation modal as shown.
Next, Switch to the "Home" tab and then click on "Generate New Keys". The option will generate Access Key and Access Secret. Copy both keys and head over to the Level2 app.
Step 2: Connect Broker on Level2
Click on "Connect to Broker" on Level2 and paste the copied keys.
Step 3: Deploy virtual
Click on the "Deploy Virtual" button whenever your strategy is ready to be deployed. To monitor your virtual deployments head over to the deploy page.
Trades will be automatically executed with your broker using virtual funds whenever your strategy triggers a signal.
We hope this guide was helpful in setting up your Alpaca account and getting started with Virtual Trading. Please contact us in case you have any questions!