How Much Memory/RAM Do I Need

One of the most important components of a trading computer is the system memory (RAM). Many traders believe that they need as much RAM as possible to gain an advantage. This is only partially true. It is always wise to have more RAM than needed, but more important is the quality of RAM being used. Processor technology moves much quicker than any other technology in computers so many times “high-end” systems get bottle-necked by having slow RAM. There is no sense in having a processor that is so fast that it has to wait on the other components of the computer. For starters, traders shouldn’t have less than 8GB of system memory of any type of RAM. More important however is the speed of the RAM being used. There are $50 sticks of RAM and $150 sticks of RAM, with important reasons for the difference. When RAM leaves the manufacturing plant, each stick is tested and rated. Depending on the rating, it will be placed into specific categories of which the higher-end better rated RAM is more expensive. The reason is simple: there is a lot less “high rated” RAM in a batch than low performing RAM. Nearly all major computer manufacturers use the generic or low performance RAM in their systems to save on costs and keep their prices low to the end-user.

The Engine

There is a need to examine some of the hidden parts of your trading computer system. This will influence what you should be looking for when researching and creating the perfect computer for your trading needs.

Motherboard

Chances are that unless you already know a lot about the actual different hardware components in a computer, you’ll never really need to do research on motherboards. The motherboard (main board) is the piece of the puzzle that connects everything together. It is the single most important factor of the computer, because like the other components, every motherboard is not created equal. The motherboard needs to be compliant with the other components. Thus the motherboard  should be the first component you select. One processor may work on one motherboard but not on another. And the same is true for the video cards, and RAM.

Processors

The two major processor manufacturers are Intel and AMD. Technology has come a long way. We now have multi-core processors which are extremely useful for traders. Multi-core technology is very similar to SMP (Symmetric Multi-Processor) AKA multi-processor technology in that you have multiple cores to work with on one single slab of silicon. Multiple -core processors are extremely useful for multi-tasking, which is why they should be in your scopes for your trading computer. Intel’s highest end multi-core processor product line is called the i7 while AMD’s is called the A10. Currently Intel’s i7 is the highest-end processor, outweighing the AMD A10 in nearly all categories and benchmarks but comes with a little premium in price.

How Fast of a Computer Do I Need

Your trading computer should have a direct correlation to your trading plan. If you are an investor or swing trader, your computer needs are not as demanding as a scalper or day trader. It’s very similar to how your broker and your trading plan must be supportive of your particular trading style.

Your trading computer must be able to perform (and perform well) during the most crucial and hectic times of the day when you are putting on trades and following your trading strategies. The majority of brokerage software and charting applications take an incredible amount of computing power.  However the requirements on their  websites seem low. Usually they specify only the requirements needed to install the application; minimum specifications listed by brokers and software vendors do not take into account all of the other variables that are different for every trader. What other applications do you have open; how many charts do you have open; how many order entry and level II market depth bars do you have; how many monitors do you have operating; and how many strategies and indicators do you have computing the data and transforming them into easy to read visual and graphical formats.

Consider RealTick, a feature rich software vendor, as an example. On their web site you can read that the system requirements are a Quad Core and 4GB of RAM. How many traders do you know that would ever consider functioning with only 4GB of RAM.

Let’s consider a combined broker and software package for example, Tradestation. Their minimum system requirements are a single core 1.5GHz processor and 2GB of RAM.  For a power user they recommend a multi-core at 3GHz or faster and 4GB or more. TradeStation defines a power user as one that uses any EasyLanguage studies, large amounts of tick or intraday data or an active trader. In other words anyone who is using their platform to follow the markets within the trading day. This is why you purchased TradeStation therefore everyone is a power user. There is a big difference between the minimum and power user requirements and then they indicate “or faster”. How much faster? Their job is to make sales and develop and grow new accounts. Your job is to configure and setup your trading computer system.

The bottom line of all this is that the total system must be able to perform as you wish and not be running into continuous constraints. First, you need to ask yourself what type of trader you are. How many trades do you go through on a monthly, weekly and daily basis? What is the average time frame in which you hold a position? And how many different software applications do you run throughout the trading day? The answer to each of these questions will have a direct effect on what your needs are for your trading computer system.