A “Trading Computer” is a very fast, superior piece of technology, designed to maximize the trader’s ability to interface with the markets and make decisions in real time. The key qualities of a great Trading Computer are speed, reliability, after the sale service/support, and multiple monitors.
The most important reason traders absolutely need a Trading Computer is to avoid something called “slippage”. Slippage is when you enter an order to buy or sell, and the price you get filled at is much different from what you expected. Generally, slippage occurs because the trader is using a mass-manufactured, lower-end computer that is not displaying price information in real time. This price data may be off by just a fraction of a second, but it’s enough to throw off your entire trading methodology.
Have you ever been to a sports bar where they are showing the exact same game on both a High Definition TV and an old-school, regular TV; and the game on one TV is actually a second or so ahead of the other? Slippage is a very similar phenomenon, and it costs traders a bundle.
Most traders don’t realize that mass-manufactured computers, and the mainstream processors from just a few years ago, just can’t keep up with today’s mega levels of streaming price data. So if you have a computer that is just 2 or 3 years old that you bought at BestBuy, most likely you are going to have data issues and bottlenecks.
That brings me to an important point: forget about going down to BestBuy, OfficeDepot or Walmart to buy an HP, Lenovo or Dell computer. These mass manufacturers use inferior components, inferior wiring and low-end motherboards in their systems; and their tech support outright sucks (unless you like calling call centers in the Philippines!). You will NOT save money buying one of these mass-manufactured machines. Additionally, most of the mass manufacturers only include a 1-year warranty. As for the kids who work at these retailers, they have NO IDEA what you need as a trader.
Instead, plan on having a system professionally built and customized for you. Believe it or not, having a system built for you will NOT cost you more in price than going down to BestBuy. In actuality, it will cost you less if you consider the cost of slippage, set-up, downtime, headaches and frustration.
SPEED: The biggest contributor to speed in a computer comes from a component called the Processor. The Processor is the engine of the computer.
Traders need the most powerful processors on the market to optimize their trading software! Trading software is extremely resource intensive.
The processor needs to be able to handle the MASSIVE volume of real-time data points and information we take in through our internet connection as traders. Think of all the price data, tick data, time and sales data, historical chart data, as well as the myriad of other information that is streaming to our machines.
Your trading software, besides showing you quotes, has to take these thousands of data points per second and compute analytics, quantitative indicator computations (sometimes dozens) and draw charts that are changing dynamically - in real time.
Additionally, traders use their computers for dozens of other applications that are resource intensive such as online trading/teaching rooms that make use of GotoWebinar and Zoom. Online video streaming such as CNBC, Bloomberg or CNN are also extremely resource intensive.
Now add in any other applications you use such as Excel, Outlook, Chrome, Skype, etc. and you can see your processor has to manage a LOT of tasks.
So as a trader, you never want to skimp on processing power and speed.
Think of the processor as the main engine of the computer. The more horsepower the processor has, the faster it can process data and streaming information, and the less chance you will have for slippage and slowness.
The ultimate measure of computer horsepower is found by running something called a CPU Benchmark Test. This like taking your car down to a special tuning shop and having them test EXACTLY how much horsepower is coming out of the drive train. (In the car world, this is known as a “Dyno Test” on a dynamometer.)
The minimum amount of “horsepower” a trading computer needs (and this is really the bare minimum) is a CPU Benchmark Score of 12,000. This number may mean nothing to you without anything to compare it to.
Just to give you an idea, Dell, as of this writing, is selling their new Inspiron 22 3000 Desktop with the Intel i5-8265U processor which has a disappointing benchmark score of just 7986. This is NOT fast enough for trading.
Remember, the minimum Benchmark Score required to avoid slippage as a trader is 12,000.
Your best bet is to check the EXACT amount of horsepower of your current computer by visiting this CPU Benchmark Test Page ->
https://bit.ly/ezcputest . I think you may be surprised to learn that over-the-counter; store-bought computers are almost always underpowered.
As of this writing, here are my top processor picks for Traders. These are chosen for their power and speed as well as for their value.