Last Updated on 13 January, 2021 by Samuelsson
The trading computer is every trader’s workhorse. Regardless of whether you are into swing trading, day trading or algorithmic trading, having a trading computer that can handle your daily tasks is essential. However, the needs of a swing trader are quite different from those of a daytrader, and even more so from those of an algorithmic trader. In this guide, we will first go through what parts of a trading computer that are important to consider, and then go into more specific advice for swing traders, daytraders, and algorithmic traders. We will also cover what monitors you need to use, software limitations and the importance of backups.
The Parts of a Trading Computer
A trading computer is not much different from a normal computer. However, knowing what parts of the computer that are used the most by trading software makes it easier to choose a trading computer that is suited for your trading, be it swing trading, daytrading or algorithmic trading. Below we will go through the most important parts of a trading computer that will be used a lot when loading trading software and charts and performing backtests.
The CPU is one of the most significant determinants of the speed of a trading computer. The faster the CPU is, the more calculations the trading computer will be able to execute. In algorithmic trading, the difference between a slow and a fast CPU can be like night and day. At the Robust Trader, we often run optimizations of trading strategies or research that may take the whole night to complete. In such cases, having a quick CPU can speed up the process considerably and free up valuable time for trading strategy development and research.
When choosing a CPU for your trading computer, you are looking for two things. The first one is single core performance, and the other is multi-core performance. For those of you who are not very much into computers, the following paragraph will give a brief explanation of the difference between the two.
A single core processor, as its name suggests, has one core. Multi-core processors, on the other hand, have multiple cores. Therefore you could say that a multicore processor consists of several small processors that are packed into one chip. The first multicore CPU was introduced in 2001 to continue the high rate of performance increments, in a time when increases in single core performance were stagnating. Since then, the number of cores has increased up to where we are today, where computers with 16-32 cores are becoming more and more common even in the lower price ranges.
Limitations of Multicore CPUs in Trading
However, as with many types of software, many trading platforms struggle to utilize all the core efficiently. Some are better than others, and in general, the support is becoming better and better with time. In “Trading software and hardware limitations,” we take a closer look at this and go through multicore support for the most common trading platforms.
The graphics card is often overlooked when traders buy their trading computer. While you do not need anything powerful, you will most likely need a solution with many ports so that you can connect several monitors.
Many traders would agree that if there was one thing you cannot get enough of, it would in fact be screen As your trading grows in complexity with higher numbers of charts and other trading software, you will soon realize the benefits of having two, three or even more screens.
One thing that is important to understand, is that you do not need a powerful graphics card for a trading computer to run smoothly. The only thing that a graphics card in a trading computer will be used to, is to render the screen. Therefore, this is one area where you can save quite a lot of money by buying the cheapest option you can find, that still satisfies your needs in terms of numbers of ports.
Many times the CPU will have inbuilt graphics that is enough if you choose to only have one monitor. Later, if you want, you could add a graphics card to your trading computer if you find that the screen space is not enough for your needs.
Having enough RAM is critical to ensure that your trading computer runs smoothly. Ram is a short term memory that holds the information that needs to be quickly accessible by the CPU. The more programs and charts you have open simultaneously, the more RAM will be used up by the system.
Once the ram is depleted, the trading computer will resort to storing the short term information on your hard drive, which is much slower than the RAM. Once this happens your trading computer will become sluggish and unresponsive, which is why you want to have enough RAM for it never to run out.
The amount of RAM that you will need depends on your trading style and use of software, but generally, 8 GB will suffice for most basic users. However, those keeping many charts and programs open at the same time will benefit from having 16 or even 32 GB.
Even if the hard drive will not have a significant impact on the performance once everything is up and running, it will have a huge impact on loading times!
There are two types of hard drives that you need to know of. The first is HDD, which stands for Hard Disk Drive, and the second is SSD, which stands for Solid State Drive.
When choosing a trading computer you want to make sure that it has an SSD drive. SSDs are much faster than HDDs and will cut your loading times into practically nothing.
Still, it could be good to have an HDD installed as well since they are much cheaper for storing large files. Then you may have your Windows and programs installed on the SSD to ensure that they run blazingly fast, while larger files that you seldom access can be stored on the HDD.
Keep in mind that a trading computer, especially one for algorithmic trading, will be used to its max for prolonged periods of time. A lot of heat will be generated, and if it is not diverted efficiently, your CPU will eventually slow down to avoid overheating. This is the reason why a solid cooling system is very important to have.
When you choose a cooling system, you have two choices:
- Air Coolers
- Liquid Coolers
Air coolers are often included with the CPU, but in most cases, you should upgrade to another model. The ones that are included are typically very noisy and tend to not be able to handle the massive amounts of heat that come when performing long backtests or market studies. There are air coolers on the market that operate well and at lower noise levels. However, these tend to become massive and need to fit into your computer case.
The second alternative is liquid coolers which are much quieter, and use water to cool the trading computer. Liquid Coolers are much more efficient than air coolers and operate at much lower noise levels. If you are going to have your trading computer somewhere where noise levels could become an issue, like in your bedroom or living room, liquid cooling is probably the best option for you. Just keep in mind that liquid cooling is a lot more expensive than air cooling.
Trading Computer for Algorithmic Traders
Algorithmic traders will require a trading computer with a lot of power in order to be able to run demanding backtests within reasonable time limits. Even a slight increment in speed could save you some valuable time that you could spend working on finding trading strategies, instead of waiting for a backtest to finish. Sometimes you might even want to do other tasks while running a backtest in the background, which requires good multi-core performance.
These intense requirements of algorithmic traders make it important to not compromise on the power of the trading computer. You need to have a powerful multi-core CPU to handle the backtests and a lot of RAM. To load the large amounts of price data that you will need when backtesting you will also benefit from having an SSD as the primary hard drive in your trading computer.
Algorithmic Trading Computer Recommendations
Even if you will need a powerful trading computer as an algorithmic trader, there is no need to go overboard. A modern mid-range multi-core CPU together with a healthy 8 or 16 GB of ram will probably be all you need, at least for the beginning.
These are our recommendations for those beginning their algorithmic trading career:
If you choose a trading computer with many cores, just make sure that it is supported by your trading platform. TradeStation, for example, will not use more than 16 cores. You can read more about this under “Trading Software and Hardware limitations”.
Trading Computer for Day Traders
A day trader must ensure that his trading computer has enough power to run and update all charts simultaneously. It is paramount that there is no lag since a delay or inability to send orders could result in losses or missed opportunities. You will have a lot of graphs running in the background, maybe together with web browsers to keep you updated on what is happening right now. Thus, you will benefit from having a lot of RAM, so that many programs can be open simultaneously.
Day Trading Computer Recommendations
Trading Computer for Swingtraders
Swing trading is a less fast-paced trading form, and therefore the speed of the trading computer is not as crucial. The typical swing trader scans the market once it is closed, and sends the buy or sell orders for the next market open. Thus, there is no hurry to quickly come up with the candidates, and a slower trading computer is not an issue.
Still, you want your trading computer to have some power. Especially since you sometimes might want to pull up many charts at the same time while still keeping the interface responsive. These are the minimum specifications we recommend for a swing trading computer:
Swing Trading Computer Recommendations
Can I Use a Gaming Computer As a Trading Computer?
Yes, you can. Gaming computers tend to have powerful CPUs and enough ram to run demanding games. Therefore they work very well for trading. Just keep in mind that you may be paying extra for the brand with some gaming computers. Also, you are nearly always getting a graphics card that has more power than you will ever use, which basically is like throwing money out the window. Especially considering that high-end graphics cards can cost over $1000.
You will find that many computers, not only those geared towards trading, come with too powerful graphics cards for your needs. Therefore we would recommend you to have a look at Falcon trading computers. They are experts in the field of trading computers and offer everything from custom built laptops to typical trading computers. What is so good about Falcon trading computers is that they build your computer using solid parts with redundant capacity to ensure that your trading computer runs as smoothly as possible. At their website, they claim that they manage to squeeze out some extra 10-15% of power by using the right components that enable the CPU to run at its turbo speeds for longer periods of time.
The Robust Trader we use Falcon Trading computers due to their great customer service and high-quality products
Building Your Own Trading Computer
Building a trading computer is not too hard, and most people can learn to build their own trading computer with relative ease. However, a trading computer is going to constantly be performing around its peak performance, so it is important that you keep cable management in the computer clean and organized so that air can run through and cool the trading computer.
The most significant benefit of building your own trading computer is that you get to choose all the components. As we have gone into before, the graphics card tends to be over-dimensioned, leaving you both with fewer ports than you might need for your displays and an inflated price tag. When you build your trading computer you can choose to exclude these types of components and save some money.
If you feel like you do not want to risk that anything goes wrong, we either recommend you to contact a PC builder to do it for you, or to buy a trading computer specifically designed for trading through Falcon trading computers.
What Monitors Should I Use?
This is quite a common question among new traders. Here at The Robust Trader, we use up to 8 monitors with a size of 24 inches at a resolution of 1200×1920. We find that Full HD screens (1920×1080) sometimes have too low resolution, which can be frustrating at times. The jump from 1920×1080 to 1920×1200 certainly makes a difference. However, that is just personal preference, and you should be fine with normal 1920×1080 screens.
Now as computer screens with higher resolutions have become cheaper you may also consider choosing a 4k display. Then you may want to size up the monitor size, to make use of all the pixels. Also, keep in mind that your trading platform preferably should support 4k screens, for the best experience possible.
Choosing a Trading Laptop
While a trading computer with a lot of power is great to have at home, you might want to buy a trading laptop for those times when you are on the move.
Choosing a trading laptop is not much different from picking a trading computer. However, it might be even harder to find powerful trading laptops that do not have over-dimensioned graphics cards, since most of the powerful laptops on the market are gaming laptops.
We at The Robust Trader recommend choosing a trading laptop with a screen size of around 17.3 inches, since it will help a lot with reading charts and multitasking. Then if you want, you may buy external USB screens to expand the screen space and boost productivity.
If you do not want to get a gaming laptop, falcon computers offer their own custom built trading laptops.
Trading Software and Multi-Core Support
The advent of multicore CPUs meant that performance now was growing horizontally, with more cores in one CPU for better multitasking performance. However, since then, software, in general, has struggled to make use of all the power that comes with multi-core CPUs. Below we have a look at a few of the most common platforms and how they cope with utilizing all the cores of a modern multi-core CPU:
TradeStation supports a maximum of 16 cores and will leave any additional cores unused. In other words, for TradeStation users, any trading computers having a CPU with more than 16 cores is a waste of money. Here you can read more about how the multicore support is set up in TradeStation.
Multicharts utilizes all the cores of a modern trading computer.
Amibroker’s multi-core support depends on what version of the software you are using. The Standard Edition is limited to two threads per analysis windows, and the Professional edition is limited to 32 threads per analysis window. Here you can find more information about how Amibroker utilizes multi-core CPUs.
Ninjatrader utilizes all available CPU cores, so choosing a multicore CPU should not cause any issues. Here you can read more about how Ninjatrader utilizes multi-core CPUs.
Before making a decision to buy a trading computer based on the information above, always make sure to double check the information provided!
Tips for Choosing Mouse and Keyboard
Keep in mind that you will be sitting a lot in front of your trading computer, backtesting strategies and analyzing charts. Therefore it is important to not forget about ergonomics.
We would recommend you to not go with the typical straight keyboards, but with one that is angled to fit with the positions of your wrists.
For the mouse, we would recommend you to at least have a closer look at mice that use trackballs. Many power users who spend their days in front of their trading computer witness that trackballs have helped them to relieve wrist strain.
Of course, if you experience no issues even throughout long sessions in front of your trading computer, you might not have to make the switch to a more ergonomic mouse or keyboard. Just have the options in mind, in case your wrists or hands start to show signs of overstrain.
The Importance of Backups
Nothing is foolproof and especially not a trading computer. Traders push their trading computers to their limits, and naturally, run a higher risk of experiencing crashes than the typical user. Considering that your trading computer holds your edges and strategies, which are the foundation for your whole trading business, the importance of backups cannot be stressed enough!
Backup everything you do! Backup to external hard drives and use a cloud service to store your valuable information. Make sure to have a backup of the backup placed somewhere else than in your home, in the case of burglary or fire!
The Internet Connection
The internet connection is not only your trading computer’s connection to the Internet but also to your broker. If you are trading from home as an algorithmic trader or daytrader, you want to get the fastest and most reliable Internet connection there is.
Also, make sure to have a backup in the case of internet failure. It could be your smartphone or a mobile broadband. Just ensure that you have a backup plan in case you cannot reach your broker the normal way. Having open positions that cannot be closed could be disastrous!