Today the forex market was a bit more active, giving us the chance to fire away 20 scalping trades on the MT4 platform - all but one positive. This allowed us to end the month on a positive note; a much needed jolt in an otherwise very inactive and boring 31-day period. I pray that February brings us many more trading opportunities.
News moves markets - plain and simple.
This is especially true in Forex, which is ultra sensitive to the plethora of daily economic releases and reports around the world. How does a day trader keep track of all this data without being overwhelmed? A tool that we use frequently in our currency day trading is the Forex Calendar from Forex Factory.
The calendar gives you the date and time of each economic release, the currency it might impact, and the consensus forecast. It also provides the result of the previous release and the actual value of the release after it comes out. One of the coolest features of the Forex Calendar is that it color-codes each release based on the probable impact it will have on the given currency: yellow for “low” impact, orange for “medium,” and red for “high.” A currency trader can quickly look at the economic schedule for a particular day and gauge the level of activity that might occur; for example, a day with a lot of red icons (releases) will probably be a lot more active than a day with only low-impact reports (yellow icons). A Forex day trader will also be able to see at what times of the day the market might be the most volatile.
While it is not necessarily true that more high-impact days will make you more money, the more chaotic the market is, the more opportunities there are. Let me know if the Forex Calendar becomes a useful addition to your day trading arsenal.
FXLQ’s new MT4 trading system with multi-bank liquidity might be launched by February 1st (in two days). This is what I was told last week. This might improve the quality of execution of our scalping trades significantly.
While we wait for the above to happen, we continue to trade lightly on the existing MetaTrader system. We are still experiencing a lot of problems with “off quotes” and trade rejections (but at least we are trading). The forex market hasn’t been that great in the last few weeks, but the tide changes quickly when it comes to currencies. Wider market moves might just be around the corner.
Day Trading on Currenex
The progress of our Currenex Trading System (CTS) project has slowed down a bit. The CTS platform wasn’t originally designed with charting in mind. We started testing it the minute the order entry functionality was complete. Now we realize that charts would help a great deal. The problem is that there’s no easy solution to chart Currenex price data and programming is involved. We are working on that now and will let you know how that goes.
The previous article in this series described the ‘engine’ of the trading computer system. The components discussed here will be crucial in allowing you to get maximum performance from that reliable, high-speed ‘engine’ you’ve assembled ‘under the hood’.
PCI, AGP, PCI-Express are all types of video card interfaces. Nearly all systems today are integrating PCI-Express, which is the newest and most scalable type approach with video cards. Nearly all new video cards have dual output for dual monitor display. This is usually in one DVI (digital) and one VGA (analog) flavor. If purchasing a video card with a DVI port and you are not running a digital LCD monitor, then you will need a DVI to VGA converter/adapter. Most DVI capable LCD monitors will have the capability of running VGA (analog), so you will not need to worry about VGA to DVI adapters (they are in the hundreds of dollars).
Another concern is the size of the onboard video memory and graphics processor. Memory on the video card is important to traders and yet isn’t important to traders at the same time. Anything over 128mb will be sufficient, as long as it isn’t hyper-memory. Many video card manufacturers use a trendy term called “hyper-memory” which isn’t as dandy as the name implies. It is a term used when the video card will steal some of the system memory for its own use, which truly defeats the purpose of video RAM. 256mb or 512mb video card versions WILL NOT help populate your charts quicker or give you an advantage, nor will having the latest gaming video card.
The processor on the video card isn’t as important for traders as you may think it is. If the video card has dual monitor support, chances are that the GPU is good enough. The most important aspect of the video card is compliance and reliability. Just because it will fit into a slot in your motherboard does not mean it will be reliable or work the way you want it to. There are hardware and also software conflicts that can arise, which makes the video card selecting process very tedious. General rule of thumb to guide you is to stick with ATI chipset or nVidia chipset, NEVER mix the two as that is a recipe for disaster. Also try to stay with the same manufacturer if you decide to take the “do it yourself” approach.
Microsoft is of course really the only name that traders need to worry about for their new trading computer. Microsoft Windows XP is the operating system of choice because of its ease of use, networking and security features, and the fact that trading and broker software was designed around it. Microsoft is working on a new operating system called “Vista”. I caution early adopters that it may not be very friendly to your broker or charting software. With every new major software product release, there will be bugs galore. I would wait at least 6 months before testing out Vista and try to get confirmation from your software vendors on whether or not their software is Vista compliant.
It is important for traders of every level and type to have a backup plan for their important data. There is a hardware and software approach to backing up. The hardware approach involves having additional hard drives either in a RAID setup or simply to copy/paste files. A RAID 1 mirror mode setup is where you have two identical SATA hard drives setup in a RAID 1 configuration that will mirror each other. What I mean by this is that whatever you do on one hard drive, it will do the exact same thing to the other. This is a redundant backup process in which if one hard drive fails, you have one other physical hard drive with the exact same data and information to boot from. However, if you do get a virus, it will be on both hard drives.
This is where the software approach comes into play. There are software vendors that have backing up software that will “ghost” your hard drive so that you can resort back to a prior date in the future. There are many that will do a bare backup where it will make an exact image copy that you can burn to a DVD or copy to a backup hard drive and then there are some that will give you the ability to boot into that image. For the most redundancy, you would have a RAID 1 configuration with backup ghosting software.
This is the final article in the series. Hopefully you now realize that every computer is not equal and that one computer may work out for person A but not be sufficient for person B. There is definitely a lot that needs to go into the research part of this very important aspect of your trading. A computer is a tool that can give you an advantage and edge in the market place just as your techniques and software does. You owe it to yourself to go through the due diligence process. Ask questions, shop around and make educated decisions on what will be the most important investment to ensure the success of your currency trading.
The author, Jordan Peterson, of Custom Trading Computers, Inc. is a well-known expert in custom built high performance computers, which must be specifically designed for currency traders. Such computer systems can handle heavy volume trading periods with complete success and without any danger of locking up.
As the previous article in this series pointed out, you must be very realistic on the capabilities of the computer system that will support your own currency-trading plan. This article discusses some of the hidden parts of your trading computer system. This will influence what you should be looking for when researching out the perfect computer for your trading needs.
Chances are that unless you already know a lot about the actual different hardware components in a computer, that 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 of a computer, every motherboard isn’t created equal. A quick run-down is that the motherboard needs to be compliant with the other components of the computer, thus the motherboard ultimately should be the first component that you select or know you are going to use. One processor may work on one motherboard but not on the other, and the same is true for the video cards, RAM and even hard drives (for example if it is missing a SATA controller and you are using a SATA hard drive). The most reliable names for motherboards (and I can’t stress enough that it also depends on the model) are Asus, Gigabyte and Intel.
The two major processor manufacturers are Intel and AMD. Technology has come a long way to where we now have dual-core processors, which are extremely useful for currency traders. Dual-core technology is very similar to SMP (Symmetric Multi-Processor) AKA dual-processor technology in that you have two cores to work with but with dual-core processors, it is on one single slab of silicon. Dual-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 dual-core processor product line is called the Core 2 Duo while AMD’s is called the X2. Currently Intel’s Core 2 Duo is the highest-end processor, outweighing the AMD X2 in nearly all categories and benchmarks but comes with a little premium in price. In the future AMD plans to have a quad processor machine using dual-core processors, which should be extremely interesting.
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 importantly 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 inadequate RAM timings (speed). 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 1GB of system memory of any type of RAM. More importantly though are the timings 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 get put into specific categories of which the higher-end, better rating 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. Technology is moving towards the integration of DDR2 memory over DDR with the biggest difference being the higher clock speed and power savings.
This is another component that is nearly always overlooked but is extremely important to the performance and reliability of a trading computer. Most traders believe that they might as well get the highest capacity hard drive as they can because they will be getting more for their money. The fact is that most traders don’t use more than 15GB of hard drive capacity, so what would be the point in getting a system with a 400GB hard drive? Similar to the memory/RAM is the quality over quantity approach. It isn’t how much capacity that is important, but yet again, the timings. When you access a file or write data to the hard drive, each hard drive has specific timings, or how fast it will do the task. Trading applications are constantly writing to the RAM and to the hard drive, so it is important to keep up with the demand. You want to definitely stick with the newer interface technology called SATA (serial ATA) rather than old IDE. I would not recommend looking into a SCSI route, as the benefit factor to traders isn’t enough to justify the overwhelming cost. So again, think quality, not quantity. If you do indeed need storage space, you can always have an external large capacity hard drive or large capacity “secondary” internal hard drive for backing up and storing files that don’t get used often.
In the next article, we will discuss some of the less hidden parts of the trading computer system.
The author, Jordan Peterson, of Custom Trading Computers, Inc. is a well-known expert in custom built high performance computers, which must be specifically designed for currency traders. Such computer systems can handle heavy volume trading periods with complete success and without any danger of locking up.
In the previous article in this series, we pointed out that every currency trader would have his or her own specific needs in terms of software, broker and currency trading information. In the same way, your currency-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 currency trading style. If the same solution applied for everyone, there wouldn’t be a market. Thank goodness for the differences we each possess!
Your currency 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. You may be thinking “But the minimum specs on their website seem very low“. Usually that is only the specs needed to install the application; minimum specifications listed by brokers and software vendors do not taking 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, for example: In their manual you can read that the minimum specifications are that you must have a Pentium II and 128mb of RAM. How many traders do you know that would ever consider functioning with only 128mb of RAM?
Let’s consider a combined broker and software package for example, Tradestation. Their minimum system requirements are Pentium II 450Mhz and 256mb of RAM. Yet on the very next line, under “recommended system requirements” it states that you want to use the fastest processor available, as much RAM as possible, as large of a hard drive as possible, and the fastest video cards available. Wow, are those recommendations different from the minimum or what? Aren’t they a bit broad? Don’t you love how they aren’t specific at all? Their job is to make sales and develop and grow new accounts, not worry about whether or not their client’s computers are setup properly for their software; that isn’t their problem, it is yours.
The bottom line on all this is that the total system must be able to perform as you wish it and not be running into continuing 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 that you hold a position? 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 truly are for your currency trading computer system.
In the next article we’ll look at some of the important elements in your ideal currency trading computing system.
The author, Jordan Peterson, of Custom Trading Computers, Inc. is a well-known expert in custom built high performance computers, which must be specifically designed for currency traders. Such computer systems can handle heavy volume trading periods with complete success and without any danger of locking up.
Love the site; really as someone hoping to start a career out of day trading, this site really gave me the basic knowledge i needed to know, at first i was all over the web going to a different site to explain each term i somehow read at another site. this was the only site i very luckily found giving me the A to Z of day trading. thank you. thank you for your time and thanks again for making this site; in the tutorial you say one should never consider themselves gods gift to man, but i find it hard to believe that u aren’t just that.
Avi
This is the first in a series of articles to help you choose the very best day trading computer system for your currency trading. Being a successful day trader is all about having as many edges as possible. One edge that many traders are finding to be an absolute necessity is their day trading computer system.
There are only a few elements required for a trader to gain access to the market. First is a strategy and trading plan. Second is a broker to get in and out of the markets. Finally and most importantly is a trading computer to connect to the broker and to fulfill the trading plan.
Computers are fantastic tools and have helped financial markets gain tremendous growth over the years by giving traders access to the markets without being on the exchange floors. Just think for a minute where we were less than five years ago compared to where we are now. There are 100% electronic traded exchanges and the majority of floor trading is dwindling because of the easy access to the currency markets via a computer. A computer is your eyes and ears into the markets and one of the most important aspects of your trading success. However, it is also usually the most overlooked aspect of currency trading.
Why do most traders overlook the computer aspect of their trading? Many traders believe that all computers are built the same and are essentially equal. Ultimately they will just go with whatever is cheapest or on sale. It is worth asking yourself a few questions if you are tempted to fall into this trap:
The answers to the above questions will not be the same for everyone. The reasons may vary drastically between different traders. Some may be price, some may be because of referrals from colleagues, and some may be because the features or information caught your attention the most. The fact is that all trading software isn’t the same. All brokers aren’t the same. All seminars and trading books aren’t the same. The same applies equally to computers: all computers are not the same. Ultimately each of the above will DO the same thing, but each will DO it differently.
How well any given combination works for you will be specific to the needs of your currency-trading plan. In the next article, we will explore what this may mean for you.
The author, Jordan Peterson, of Custom Trading Computers, Inc. is a well-known expert in custom built high performance computers, which must be specifically designed for currency traders. Such computer systems can handle heavy volume trading periods with complete success and without any danger of locking up.
Jordan Peterson, of Custom Trading Computers, Inc. is a well-known expert in custom built high performance computers specifically designed for currency traders. Such computer systems can handle heavy volume trading periods with complete success and without any danger of locking up. Many of our clients have benefited from his advice.
We are pleased to announce that he will be authoring a series of articles describing the different aspects involved in making that best choice. These are the titles of the articles:
This is a most important topic in ensuring your day trading success and we encourage you all to check out his advice.
Dan Alvarez
A Bloomberg article shows that London, the world’s biggest center for currency trading, increased its lead over New York as in the six months through October 2006. Trading ran at $1.06 trillion a day in London during October, up 6 percent from April. Meanwhile New York shrank 7.5 percent to $534 billion in the same period, based on Bank of England and Federal Reserve surveys. “London has always been the centre of foreign-exchange,” said Ian Stannard, a currency strategist in London at BNP Paribas SA. “It’s continuing to grow and extend that lead.”
A growing share of the city’s volume is from currencies other than the euro and dollar as eastern Europe economies expand and investors take advantage of Japan’s low interest rates to sell yen and seek higher yields elsewhere.
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