The days when stock trading was done on the stock exchange’s pits are gone, long time ago. Nowadays, trading is entirely automated and executed by specially-designed trading hardware. As soon as the technological revolution arrived and computer hardware became a tool for the masses, everything became easier. Today, even a process as complicated as stock trading or even professional day trading does not require sophisticated hardware.
All you have to do in order to start trading stocks from home is to invest in the right trading equipment. In this guide, you will find important information about trading hardware, the main characteristics of a good trading system and the most important requirements for a well-working trading computer.
- Why having trading hardware is important?
- What type of trading equipment do you need?
- Which characteristics should your trading computer have?
- What about the characteristics of your trading monitor?
- Other things to consider when setting up your trading hardware
- Tailor your trading hardware to your needs
Why having trading hardware is important?
If you want to participate in the financial markets, it is very important to set aside a budget for trading hardware. Day trading through your phone does not provide you with the same capacity as a good trading laptop or trading computer do. Day trading is a complicated process that requires significant resources in order for your strategies to be applied appropriately. The constant process of buying and selling also requires from you to analyze real-time data, graphs and prices which is why computers and laptops are your best choice when it comes to trading equipment.
What type of trading equipment do you need?
There are various options on the market that you can choose – from a desktop computer with one monitor or a laptop to an entire trading hardware station, also known as “tower”. In order to easily find out what type of trading computer you need, start by answering these questions:
- Do you plan to trade on the go?
- Do you want to spend big on trading equipment now or you are planning to continuously upgrade it over time?
- Have you planned to employ various strategies, requiring significant operational and processing power?
A trading computer is the better choice if you plan to continuously upgrade your trading equipment’s capacity and power. Yet, for most traders and investors, a trading laptop can be the best choice as it is mobile, while at the same very powerful as well. A good internet connection is all you need to be able to trade from anywhere.
Most traders start by investing in a trading laptop and a separate monitor or two. Slowly, as they become more experienced and start employing more sophisticated trading strategies, they start adding additional monitors. If you ask a trader how much monitors are enough, you will probably hear that there is no such thing as “enough”.
Some professional traders prefer having up to 10 monitors in order to be able to analyze real-time data, analyze charts, track portfolios and read the latest news feed. However, if you are on a tight budget and just starting, a powerful laptop and an external monitor can be your best choice. Later on, depending on your needs, you can always add an additional laptop, a monitor or find another way to enhance your trading equipment.
Which characteristics should your trading computer have?
If you are not a tech geek and can’t easily differentiate the characteristics of your computer, make sure to follow the basic rule of thumb: a gaming computer will do the work for you. If you ask for that in the tech shop, you will be offered a machine that will be suitable for professional day trading as well. Gaming laptops are fast and equipped with significant processing power which will allow you execute trades and trading software seamlessly.
Yet, if you want to focus on more sophisticated trading strategies, you may need even more resources. To get into the details and understand more about the best combination of characteristics that your trading hardware should possess, focus on the following:
The processor is basically the brain of your trading computer. It is responsible for the way your commands are being processed. The basic standard for judging the abilities of a CPU is the unit GHz. It shows the number of tasks and commands your processor is able to execute in a single second. You should also know that, nowadays, CPUs usually have multiple cores. That means there are separate units, capable of processing tasks. The more cores your trading computer has, the more tasks it will be able to execute.
The best pick: 4/6-core CPU
The RAM (Random Access Memory) is a very important characteristic when it comes to day trading computers. It describes the capacity and ability of your trading equipment to run multiple programs simultaneously. When it comes to professional day trading, one thing is clear – multitasking is a necessity. The fact that you will be switching from one program to another and running plenty of tasks at the same time, means that you will need enough RAM. That way you will be able to avoid any lag or glitches.
The best pick: at least 16 GB
One of the biggest mistakes that people make when deciding on the characteristics of their trading hardware is cutting costs on the hard drive. That is all because hard drives are assumed only as a place for storage, which is wrong. They are very important for the performance and the functionality of your trading computer as well. Nowadays, the preferred technology when it comes to hard drives is the Solid State Drive (SSD) which is way faster (more specifically – 7x faster) and more efficient when compared to the Hard Disk Drive (HDD).
The best pick: 500 GB SSD
In order to be able to run the whole process seamlessly on multiple trading monitors at the same time, it is important to have an advanced graphics card. The main task of your trading computer’s graphics card is to display the information that comes out as a result of the processes that you are currently running. Graphics cards with own memory (and not shared ones) are the best choice. Also, the bigger capacity, the better visual experience, and the more monitors you will be able to connect.
The best pick: 4 GB at least (depends on your needs)
What about the characteristics of your trading monitor?
Day traders usually start with one monitor but with the course of time, their number may grow exponentially. That is why it is always important to plan how many monitors you may be willing to add in the near future. The problem is not that you can’t connect additional monitors, it is more about the capacity of your graphics card and whether it will be able to handle all of them.
But let’s focus on how many monitors should day traders really have? The answer is it depends on your hardware and your needs. Some day traders are comfortable using only one trading monitor. Others prefer having as much as 10. The most important thing here is to use your resources to their maximum capacity. There is no need to add additional monitors and enhance your trading equipment if you are not using it to its full extent.
The best thing to do here is to start with one or two monitors and see how it goes. You can always add additional monitors by only connecting them with an HDMI cable. Most day traders usually chose 24″ monitors as they are considered the best fit, both for your basic home trading experience or advanced trading hardware.
But the process of choosing trading monitors does not end with their size and number. There is something else that is responsible for making your day trading experience more comfortable. Monitor rags are basically the spine that holds your monitors. Most of the cheaper ones resemble two arms and are capable of handling up to 6 monitors. The problem with this is that they usually cover a significant area. That is why most traders prefer monitor rags with elbows. That way, the monitors placed on the left and the right side can be pointed towards you.
Other things to consider when setting up your trading hardware
A day trading workstation does not consist only of a trading computer and a few monitors. There are other things that you should consider too if you want to ensure that you have everything needed for successful day trading.
No matter how expensive your day trading equipment is, it won’t provide you with any significant advantages if you don’t have a fast and reliable internet connection. Of course, the speed of an internet connection always fluctuates, but having lightning fast upload and download is essential. That way you will be able to get real-time market data and place a buy or sell order without any lag. By having a fast internet connection, you basically avoid the risk of jumping into a trade earlier or later than planned which will cost you money.
When it comes to internet connections, there are various options available that you can choose from. For example, the cable modem service is a good choice as the speed of the internet goes up to approximately 100 MBps which should be enough for your day trading needs. Yet, if the internet in your area is not stable or you think the provider’s services can hold you back in some way, the best thing to do is to get a fiber optic internet connection.
It’s the fastest and most reliable way that day traders usually prefer. Fiber-optic internet connections are considered the gold standard. The speed here can go up to 1000 MBps but unfortunately, this type of internet connection is not so widely spread yet. If you are lucky enough to have it in your area, don’t hesitate and choose fiber-optics.
One of the worst things that a day trader can experience is a sudden power failure. That is why you should be protected against emergency situations by investing in an Uninterruptible Power Supply (UPS) unit. That way, even if there is a blackout, your day trading computer hardware will continue to operate, thanks to the power back-up. By having a UPS, you practically make sure that you will have enough time to close your positions or save your progress.
Except being a power back-up unit, the UPS has one other important role. It protects you against electrical surges that may harm your day trading hardware. The last thing you want, when you have spent a significant amount of money on assembling the best computer for day trading is to have a part of your configuration damaged due to a sudden sharp power fluctuation. So make sure to have a UPS, it is worth it!
Investing in an additional cooling unit is usually not necessary. Whether you will need extra cooling depends on the complexity of your day trading hardware and the capacity of the one you have at the moment. The basic principle is that if you buy a whole computer unit and later on decide to add additional graphics power or other components, you will need to invest in a cooling unit as well.
Bear in mind that heat is considered as the most aggressive enemy of the processor in your trading station. Although the liquid cooling units are the most efficient ones, you may not need to spend so much. A traditional single or dual fan cooling system may also do the work for you, depending on the size and the complexity of your day trading hardware. You can use software to measure the temperature of the hardware components in your trading station.
Tailor your trading hardware to your needs
You can choose to either buy or build a trading system from scratch. There is a wide variety of options – from $1,500 to more than $10,000 and choosing what is the best choice depends significantly on your initial goals and future plans. For beginners, even a single laptop and a $200 monitor will do the job.
Nevertheless, if you intend to analyze multiple custom indicators or execute complex algorithms, you usually will need a super-fast CPU, solid memory and hard drive, as well as high-end graphics. Finding the best day trading hardware, tailored to your needs is not a hard task – all you have to do is a little bit of research. And the good thing is that you have just started! What are your thoughts on trading equipment and computer hardware for day traders?