Part I – How to choose a PC
Having previously been fully supported by an IT department, the transition to a retail environment where I had no such backup was a tumultuous one. Trading is a tough game –one where you have to be the CEO, the accountant, the analyst, the trader and IT department. I’ve had to learn the hard way and although I’m not claiming to be an ‘expert’ on the subject, I’m certain that my experiences can make someone else’s journey that little bit easier. There are 3 aspects I want to cover: – How to choose a PC; the latency issue; when technology strikes back. So let’s take a look at the first area and the main factors that need to be considered in order to choose a solid trading PC.
What You Need to Consider
Choosing a PC based on how you intend to use it is very important. You could pay lots of money for the latest most powerful machine but this is rather like “using a sledgehammer to crack a walnut” – it’s just overkill and as I’ll explain later, it doesn’t necessarily ensure that you’ll always have a fast PC. The more you want to do on a PC, the more load on it. But different tasks need grunt in different places. Actually a simple trading box doesn’t need to have that much computing power – I have a more than sufficient Core 2 Duo machine for the job. If it’s clean, well set up and has the power where it counts a trading-only machine doesn’t need to be especially highly spec’d. If you chart, browse, email, Skype, webinar, Excel, Dropbox, Evernote and so on, you’ll need a slightly more capable machine. If you do all this on a PC, then it’s almost certainly better to have a separate trading machine if that’s at all possible – if it’s not then I’d suggest keeping what’s open to a minimum even if the machine is a powerful one.
In spite of my feeling that more charts are not always necessary (and in fact often a hindrance), more screen space is usually welcome. You don’t necessarily need more screens though. Most PC’s will support at least 2 monitors these days and if you have big ones, you’ll have the real-estate you require. But if you do need more monitors it’s not a massive issue these days. There was a time when a “quad card” was pretty pricey, but add-in graphics cards supporting 4 monitors aren’t expensive these days. All you need to know is if your power supply is rated to the minimum requirement (which can be found on the manufacturer’s website), plug it in, do a simple driver installation and you should be good to go. A good example of this is an Nvidia GTX 650 which requires a minimum 400W power supply unit (the rating should be on the back of the PC where the power cable plugs in) which will set you back roughly £80 in the UK or $110 in the US.
Processing Power, Load Times and Stress
Besides graphics the capability of a PC is dependent on a number of different components. Although the CPU is what many look for, a computer is only as good as its slowest part – this is called “bottlenecking”. Although this is dependent on the specific tasks you are asking it to perform, as some will need less of one thing and more of another, the principle is a useful one to assess requirements. So in addition to the CPU you have the memory, the hard disk drive and the network card. In terms of CPU, have to look at your requirements. A trading box is unlikely to need more than 2 cores but a multi-purpose machine would certainly benefit from 4 cores. In terms of Intel CPU’s, the biggest difference between the i5 and i7 desktop chips is that i7 has hyper-threading – basically this doubles the number of physical cores the processor has. For most people, the i5 will be absolutely fine and the extra cash should be spent elsewhere.
More memory is usually a good thing. 8-16Gb is what I’d suggest for a multi-purpose machine and I’d lean towards 16Gb. The chances are you’ll need more down the line and as memory comes in kits and matching kits can cause complications, it’s better to get a 16Gb kit and be done with it. Go for a good make if you can such as Crucial and really 1600Mhz is fine for real-world applications. Just make sure the memory is running in matched pairs. So there should be multiples of 2 physical memory dimms as otherwise the memory will run at half the quoted speed. When considering which hard drive to go for, a solid state drive (SSD) is what I’d go for. The increased performance is very noticeable and when dealing with large files (like tick databases), the benefits are clear. An SSD can be useful as either a boot drive only where you only install Windows and possibly your charting package or as a complete replacement. 120Gb is probably enough space if you have say a 250Gb plus mechanical HDD as a storage drive, but 240Gb is definitely better. You can pick up a Sandisk Extreme II 120Gb for around £80 in the UK or $150 in the US which is a nice price/performance balance and uses higher quality toggle flash. Be aware though, if you want to achieve its quoted speeds, you must have a SATA III 6Gbps controller. All SATA III drives are back-compatible with SATA II but will be limited by SATA II bandwidth (3Gbps). Finally you need to consider the network card. Most motherboards come with a built-in ethernet socket and the network chip will be on-board. But the quality of the chip will vary. This is your first point at which the PC receives price data and so it needs to be right. If you buy separate components, there’s a chance your motherboard’s on-board network chip will suffice. But there are other options. Your best bet is probably to go for a separate Intel card such as the Intel Gigabit PRO 1000CT for £25 in UK or $31 in the US. You could go for a more expensive card, but generally you won’t see a huge increase in performance past a certain point.
If you’re going to trade you’ll probably be forced into running Microsoft Windows in one form or another. XP is a thing of history and Windows 7 is the best currently available. Windows 8 is doable but it’s not as mature as Windows 7 even if there are many similarities. Unfortunately if you’re buying a ready-made PC, they are really pushing Win 8, but Win 7 is available and if you do a fresh install (which you really should) when you buy it, you can use whichever operating system you want to. Some charting platforms (like IRT) can run from Mac OS so this is another option. What I’d love to see is a trading platform being developed which is able to run natively in a Linux distribution such as Ubuntu. The reason for this is that Linux is generally more stable and faster than MS Windows. I’m not convinced this is likely to happen any time soon but hey, I can dream right?
So What do I Buy?
What you probably want to hear are some specifics about a make or model so you can go out and pick a machine up. But I’m not going to do that. The reason for this is that manufacturers are chopping and changing models all the time. So I’ll just give you a few ideas and a kind of checklist for a decent all-rounder. If you’re thinking you want a beast then go for it. But a word of advice before you do – the current top of the range Intel i7 processors are the Ivy Bridge-E line. Next year this is slated to be updated to Haswell-E. It’s possible that they’ll release their first consumer octa-core (8 core) cpu here – currently the highest core count for Intel’s consumer chips is hexa-core (6 core). But the suggestion is that they’ll also be adding DDR4 memory support in this incarnation – something which is likely to see great performance increases.
So the minimum checklist for the all-rounder would be:-
Intel i5 3570 or 4670
8Gb DDR3 1600 memory
Nvidia GTX 650 (or AMD R7 260X)
120Gb Sandisk Extreme II
MS Windows 7 or 8
Quality of Hardware and Level of Support
When considering what to buy you may think the best solution would be to customize a standard off the shelf Dell or HP or Lenovo rather than going down the route of building your own PC from scratch. The latter I have done several times and whilst it’s fun and fulfilling, it is hard if something goes wrong even if you know what you’re doing. Swapping the memory out, installing a new SSD and upgrading the graphics card should be simple enough. But be warned. PC assemblers tend to pare down components to the lowest spec they can get away with in order to maintain profit margins and so not all upgrades will necessarily be compatible. If you want to do this, you need to check a few points before you go ahead and spend your hard earned cash (and hope to not waste your precious time). Check the PSU (power supply unit) has a high enough wattage rating to handle your graphics card. Check that you are buying the correct memory, that the bios can handle the extra RAM and that if you purchased a machine with 4Gb or less they didn’t put a 32-bit OS on it (to use more than 4Gb you need a 64-bit OS – of you buy a 4Gb machine it’ll probably have a 32-bit OS). Check that the PC you are buying has a SATA III 6Gbps controller on it so you can run your new SSD at full speed.
Of course there’s another route to go. If you do a bit of research, there are some very good custom PC builders out there including trading specific companies. The latter usually seem to fleece you on price for the spec’s but the service is meant to be higher. My feeling on this is that if your PC fails, you will be disrupted no matter what so if you can’t face the prospect of being out of action for a day or so extra, get a backup PC. Non-trading custom PC builders if you choose a good one (and some are certainly not), will provide a good range of hardware options, give great support options (at additional cost) and crucially do thorough “burn tests” to rigorously check that all components are operating as they should be. Dealing with hardware issues is pretty unavoidable, but if you can minimize the chances of things going wrong before you get your system, then you stand a much better chance of having a reliable system.
Whilst choosing a PC is an important piece of the hardware puzzle which a retail trader can face, it’s just one aspect to having a solid, well maintained charting/trading platform. In the next post, I’ll go through of these other important aspects.