Trading Computers – Processors are the Engine of the Computer
As a trader, you can’t be fed stale, or seconds-old data, so you need a trading computer with a high-end processor. Being behind just a fraction of a second can produce bad executions (usually ruining trading the rest of the day!).
Here’s one example your current processor is puttering along, but it’s not pretty. A market event sends a massive stream of data and then suddenly the quotes on your screen don’t move. Your frozen! Then the quotes burst on, changing faster than you can read them; lighting up with red, green and yellow. Then it freezes again.
When the bell rings each morning on Wall Street, it triggers more than the start of the trading day. It triggers a flood of data on the information super-highway. This stream of data is not constant or consistent either.
During market anomalies, like the “Flash Crash” a few years back, or recently when Apple beat their earnings big-time, the amount of streaming data actually grew.
The markets do not produce a fixed, predictable amount of data like movies.
Streaming data, like movies, is what most over-the-counter, low-end computers are good at. But, the need for streaming, processing and drawing charts in real time is where the real challenge comes in. The stream -> process -> draw cycle has to be repeated over and over.
As a trader, you need to keep up with the data, in real-time, from market open to close. Throughout the day, all that data has to be displayed as charts and indicators on your screen without missing a beat. You count on it to make decisions. Hopefully, making some greenback along the way.
Size of the stream of data changes every minute, depending on events of the day
Traders need to see data in real-time
Low-end processors will find it challenging to keep up with the data stream
Stale data can come from processors that can’t keep up with the demanding task of processing (your trading can also be effected if you don’t have the minimum amount of Internet speed… but, I’ll talk about that in a different post.). Your processor has to keep up with the “process-analyze-draw the chart” cycle
Do you have enough power in your computer’s hardware to be a successful trade? There’s a way you can test it.