Day Trading Computer – Everything You Need to Start Trading
Like in any business enterprise, equipment is a must and day trading is no exception. Since you are looking for day trading equipment, I assume you are fully aware of the server farms used by the automated trading firms based out of New York and Connecticut. Well, this is not an architecture document for building the next data center; however, you will get all of the basics for what equipment you will need to get started in day trading. One thing I want to point out is after you read the article you can test out your current system speed by using a Trading Simulator.
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What do I need to get started with Day Trading?
Not only will you require a solid approach or technique to day trading, but the day trading computer equipment needs will be just as important when setting yourself up to day trade.
Day trading involves profiting of very fast moves at times, sometimes you will be in a trade for less than 10 seconds. A day trading computer with a fast processor will be required to handle the speed at which you need to execute. I would suggest at least a Pentium 4 with a minimum of 1 gig of RAM and a 40 GB hard drive.
One thing that you want to be aware of is the usability of dual core processors. Dual core does not necessarily mean faster if your trading application does not support it. For example, an AMD dual core running at 2 GHz does not help with Tradestation as that application is not made to take advantage of a dual core processor as of yet. You are better off with a single core Pentium 4 in this situation. Understand the trading platform you wish to use before you spend money on a computer.
And don't forget, use a surge protector to protect your equipment!
I trade with 4 monitors to allow me to track different stocks and other technical indicators at the same time. It is really a personal preference; some traders get away with using a laptop while some need 12 monitors to trade. If your day trading computer requires a multi-monitor setup, you will also need to purchase a video card that will allow multiple monitor setup. ATI and Matrox have some good video cards which will cost anywhere between $250 and $500 to purchase. I would strongly suggest doing some research and then checking the prices on eBay. That is where I bought all of my video cards and I got over 50% off the retail price.
You can also visit websites such as digital tigers, even if you do not buy from them, you can get an idea for what you need. For those of you who are not computer savvy, this is a great site for a fully functional setup. It will cost a bit more but it will give you a peace of mind.
One final note on monitors, make sure you get monitors with a good resolution and keep the brightness low so that your eyes do not strain. Set your monitors up correctly in the beginning and you will literally avoid the headaches of looking at the screen all day.
Finally, you will need at least a cable modem connection. Trading is very fast and your data needs to be faster. The faster, the better. The most effective connection with the highest speed is Verizon's FIOS; however, this is not available to many as of yet. Below are some of the golden rules when dealing with internet connections:
- No Trading at the Library - the networks are not secure and they often go down with littler tech support in sight.
- No Starbucks - go there to drink your coffee, not to show everyone you are a cool trader. You will get more questions and commentary than you can imagine.
- No 3G - 3G is for mobile phones and kids looking to play angry birds. You are a trading professional and your connection speed should be higher than your kid's age.
Day trading obviously will require a real time data feed. You will need to purchase a real-time subscription from your broker. There will be a fee for most of the exchanges that you require real time data from. Also, there will be an additional fee to view the Level 2 information. Real-time news feeds will be a bit more expensive than the stock price data that you are paying for. It may run around $100 a month for a RT news feed.
The worst thing that can happen is that your day trading computer could crash on you while you are trading. It is always important to have a backup laptop or computer which is setup with the appropriate trading software so that you will be able to switch setups pretty fast in the case of a hardware failure.
Equally important to having a backup for your day trading computer is to have a backup internet connection. I cannot even count how many times that my internet connection went down during the trading session on me. This is a huge risk and can cost you quite a bit of money. If you are a serious day trader, I would suggest wiring your location with the ability to handle dual internet connections that can be switched on the fly in the case of a network outage with one of your providers. It is just not worth it to be at risk for the small fees associated with having a backup.
Software should be kept to a minimum with trading computers. You do not want the system resources to be taken up by third party software that is not related to trading. In addition to your trading software, I would suggest running an anti virus software and Microsoft Office, but not much more.
Your day trading command center should be treated with the up most respect and thought out carefully. The goal is to avoid your machine locking up once the time and sales window goes bonkers on a 9:30am breakout. Also, the toggling between multiple screens and windows will prove a bit much for one laptop. So, don't go cheap. Spend the money upfront so you have a shot at success.
When you are ready to take the leap of faith and do not want to spend the time to build your own machine, you should check out the following resources: