Do Professional Day Traders Need Special Computer Equipment

The short answer to this is no, most professional day traders do not need any particular special computer equipment.  A relatively modern desktop or laptop computer has enough computing power for most day traders.  Recommended specifications for the software we use is listed here.  Usually a trader will use more than one computer monitor, but that is a personal preference.  A home computer is more than enough computing power to run sophisticated day trading platforms.

There was a time when a remote trader (defined as a trader not on an exchange floor) who wanted to access all market data feeds  abd enter orders over the internet would need a special station such as a Bloomberg terminal.  Today, with the right software package and data subscriptions a trader can get everything he needs right from a home or office computer.  The most important need for a trader today is a reliable internet connection.  A professional software package with access to all market data will require a decent amount of bandwidth during times of high market volatility, so a strong internet connection is an important requirement.  A home DSL or cable connection should provide plenty of bandwidth, so this is less of a concern today than it was in the past.

To review, the basic requirements are:

-A modern computer with a reasonably fast processor of at least 2 gigahertz and at least 2 gigabytes of RAM.

-At least one, preferably two or three computer monitors to view lots of data simultaneously.

-An internet connection with at least 3 Mbps, but preferably a 10 Mbps connection that is reliable.

There are some trading firms that do require special larger bandwidth internet connections and stronger computer equipment.  These are the high frequency trading (HFT) outfits.  These firms have extremely complex algorithms which simultaneously scan thousands of stocks and can take hundreds of pieces of information and variables into account to generate trades.  Their strategies require information to be processed and executed on in nanoseconds, and HFT firms battle each other to have their orders entered first.  Sophisticated computer equipment and superfast internet connections are tantamount to these firm’s strategies, to the point where many have moved the entire company closer to exchange order centers to have a speed advantage over firms located further away.  A hand trader can never compete with these firm’s speed advantage because they can act faster than a human brain can process information.  This is why human traders must use different strategies than HFT firms, and unless a trader is running his own complex algorithms across thousands of stock symbols a supercomputer will not do him any good.

We use professional software at Howwetrade which accesses all streaming market data with ultra-low latency.  This means that price information can be updated as it changes in fractions of a second.  Good professional software is in our opinion one of the best edges a hand trader can have, and it runs on most home computers.  The most important aspect of your computer equipment is that it is reliable, because there is nothing worse than a computer failure or internet failure that causes a trader to miss out on a chance to make money.

Daniel Major

B.S. Degree in Economics and Finance. Professional day trader. Live and work in Manhattan, NY, NY.

Page Updated: February 19, 2013

One thought on “Do Professional Day Traders Need Special Computer Equipment

  1. I enjoyed reading your reasonable thoughts about computer equipment requirements to trade.
    I tried day trading 8 yrs ago with surprising success but had to stop as I had an inheritance that required
    much a lot of attention.
    Want to try again and am interested your thoughts re brokers eft.
    Bill DeAlba

Leave a Reply

Your email address will not be published. Required fields are marked *