Setting up an Ubuntu 24.04 EC2 instance for algorithmic trading with Interactive Brokers

This article walks you through the steps of setting up a new EC2 instance for algorithmic trading using Ubuntu 24.04 and Interactive Brokers. Running your trading algorithms on EC2 can offer scalability, reliability, and cost efficiency—ideal for managing both paper and live trading accounts.

Inspired by Dimon's How to setup IBC (3.8.1) + TWS (build 976) on headless Ubuntu 18.04 LTS to run TWO accounts (paper + real) in 10 minutes, this guide has been updated for the latest Ubuntu release.

Initial User Setup

Create a new user, set the password and give him sudo privileges.

useradd -d /home/ubuntu -s /bin/bash -m ubuntu && passwd ubuntu && adduser ubuntu sudo

vim /etc/sudoers and add the line: ubuntu ALL=NOPASSWD: ALL

Next, we will authorize only the ubuntu user to connect via ssh.

sudo su - ubuntu

mkdir ~/.ssh

vim ~/.ssh/authorized_keys and paste your public key

sudo vim /etc/ssh/sshd_config and add AllowUsers ubuntu

sudo systemctl restart sshd

Finally, we update ubuntu:

sudo apt update

sudo apt -y upgrade

Also, make sure that the clock is properly synchronized with NTP: timedatectl status

Optional: install zsh and ohmyzsh

Install zsh: sudo apt install zsh

Edit sudo vim /etc/passwd and set your shell to /usr/bin/zsh

Install ohmyzsh: sh -c "$(curl -fsSL https://raw.githubusercontent.com/ohmyzsh/ohmyzsh/master/tools/install.sh)"

Installing xvfb and VNC

To create a virtual display environment for TWS and IBGateway, install the required packages and set up a virtual framebuffer and VNC server:

sudo apt install -y xvfb x11vnc x11-apps metacity zsh

Start the Virtual Framebuffer: /usr/bin/Xvfb :2 -ac -screen 0 2048x1536x24 &

Prepare the Log File for x11vnc:

sudo touch /var/log/x11vnc.log

sudo chmod a+rw /var/log/x11vnc.log

Run the VNC server.

/usr/bin/x11vnc -ncache 10 -ncache_cr -passwd your_password -display :2 -forever -shared -logappend /var/log/x11vnc.log -bg -noipv6

Use VNC Viewer to connect to your server on port 5900. You can also check that the display is functioning correctly by running:

DISPLAY=:2 xeyes &

DISPLAY=:2 metacity &

You should see something like this:

Installing and configuring TWS

Download the latest offline TWS version (the URL might change, you can get the latest one here:

wget https://download2.interactivebrokers.com/installers/tws/latest-standalone/tws-stable-standalone-linux-x64.sh -P /tmp/

chmod +x /tmp/tws-latest-standalone-linux-x64.sh

Run the installer: DISPLAY=:2 /tmp/tws-latest-standalone-linux-x64.sh

Installing and configuring IBGateway

Get the latest offline IBGateway version (the URL might change, you can get the latest one here:

wget https://download2.interactivebrokers.com/installers/ibgateway/stable-standalone/ibgateway-stable-standalone-linux-x64.sh -P /tmp/

chmod +x /tmp/ibgateway-stable-standalone-linux-x64.sh

Run the installer: DISPLAY=:2 /tmp/ibgateway-stable-standalone-linux-x64.sh

And run IBGateway: DISPLAY=:2 ~/Jts/ibgateway/1030/ibgateway

IBKR forces customers to restart the software once a day.

In order to do this, go to Configure > Settings > Lock and Exit. Check Auto Restart and set the restart time (I recommend to choose a time during the Server Reset Times window)

Securing your server

Firewall

Allowing Loopback Connections:

sudo ufw allow in on lo
sudo ufw allow out on lo

Allow Outgoing Connections on the Internal Network:

sudo iptables -A OUTPUT -o ens5 -j ACCEPT

Open ports for SSH (22) and VNC (5900), then set the default policy to deny incoming connections:

sudo ufw allow 22/tcp
sudo ufw allow 5900/tcp
sudo ufw default deny incoming

Enable the firewall: sudo ufw enable

Conclusion

This guide has taken you through setting up an Ubuntu 24.04 EC2 instance for algorithmic trading with Interactive Brokers.

By following these steps, you'll have a robust, secure, and scalable platform for your algorithmic trading needs. As you move forward, consider exploring additional monitoring tools and automation scripts to further streamline your trading operations.

Happy trading and coding!