Technical equipment

This article is an abstract of the book:
The Complete Guide to Daytrading

Which hard- and software does a serious daytrader need? Don't cut down on the costs. You will work several hours every day with your hard- and software. If your system is too slow or not stable, it can cost you much money.

Windows NT or Windows 2000
Use Windows NT/2000 workstation instead of Windows 95/98. Windows 2000 is much more reliable and copes much better with system resources. We strongly recommend 2000. If you still want to keep Windows 98, you can install both Windows 98 and 2000 on the same machine if you like. Your computer asks you which system you want to run when you switch on the power.

Dual Display
Use at least one 19" Monitor. We recommend you use two 19" monitors in a multiple display desktop environment. You still only need one computer but your desktop screen will be expanded to two or more monitors.

There are two ways to run more than one monitor with one computer.
1. Use more than one graphic card.
2. Use a graphic card that supports multiple monitors.

In Windows 98 you should be able to add just a second graphic card and run the dual display mode for two monitors. Windows NT doesn't support every graphic card that is available, however, so you will probably need to use two identical cards. Windows 2000 supports different cards like Windows 98. To avoid problems, it is better to choose a single card that supports two or more monitors, such as Matrox G400 DualHead (AGP), for instance. Check the Matrox web site for this card at http://www.matrox.com. This card works just fine with NT. There is also another (PCI) card available from Matrox that supports even more than two monitors, but it is more expensive.

Computer
A Pentium II processor should be sufficient for most traders, even if they run many other programs beside the broker software. However, since Pentium III processors are getting cheaper, there is nothing wrong with going for a Pentium III or higher instead. The faster the better.
We strongly recommend a minimum of 128 MB Ram, especially if you run Windows NT/2000. If you want to add Windows NT/2000 to your current Windows 98 setup, you will need the following:
* about 500 MB for Windows NT/2000
* about 30 MB for DirectAccessTrader
*space for other programs like Internet browsers, e-mail software, chat room software, etc.

To make sure you have enough space, reserve at least 2 GB disk space for your NT/2000 partition.

Internet connection
This is a very important. You must have a reliable connection because it's your line of communication with your broker. You will also be receiving real-time data and placing your orders via the Internet. There are other more expensive ways to connect to your broker, which you can ask him about, but for most daytraders, connecting via the Internet is usually sufficient. It is also the most cost-effective way.

To connect to the Internet you need a modem, a phone line and an Internet service provider (ISP). Modem, phone line ISDN offers a more reliable connection than the usual 56k modems. The technology is better and more efficient. ISDN is also faster and more stable. There is DSL and cable modem technology available but these usually have a larger bandwidth than you get with ISDN. We recommend to use DSL/cable when you can get it.

ISP (Internet Service Provider)
The question of which ISP to choose is much more difficult. There are many ISPs and not all of them offer the quality of service we need for trading. It is important to remember that the Internet is a world-wide network of computers and not every connection is reliable. The way the ISP itself is connected to the Internet is important. The better the connection, the more expensive it is.

Always use an ISPs that is a so-called backbone provider as well, because this will ensure that they have powerful Internet connections. If you are not yet sure how to find the right ISP or which one to choose, check the following URL. It is a list of ISPs sorted by area code: http://boardwatch.internet.com/isp/ac/index.html. Occasionally you can get a test account for a few days to test the connection. Make use of it and test several ISPs.

Ping Plotter is a good program to use for this. Download a shareware version of the program at http://www.nessoft.com/pingplotter/. It shows you the way the data is going from your computer to the destination server (the server of the broker, for instance) and how much time it takes to get there. If there is a problem, you will be able to see where it exists.

To test an ISP, do the following:
1. Start your DirectAccessTrader broker software. Go to the "Config" menu and choose the "Network" menu. There you will find the IP addresses of the quote and order servers. Don't enter the URL of the homepage of your broker. That's not what we want to test. We want to test the data and order servers of your broker and not the server where their homepage is located. That's something completely different.
2. Once you know the IP addresses of the server(s) start Ping Plotter and enter the address there. Set TraceInterval to 1 second and press the "Trace" button. Ping Plotter will then start testing. Let Ping Plotter run for one minute so you can get a good idea of the average delay. Also run the test at different times of the day so that you can see how the ISP works when the markets open and during market hours. Anything below 200 ms seconds delay is good. If you get 400 ms or more, you are in trouble, because it might mean that your broker's software does not work reliably. 400 ms doesn't sound much, but the problem is your data may queue up to the point where the entire software doesn't work reliably anymore.

There is a second detail to check: let Ping Plotter run for at least one minute at 1 second intervals to see if you have a stable connection with less than 400 ms delay at all times. That's very important. Delays can vary from between 0 and 400 ms but never show more than 400 ms. Even a few breakouts far above 400 ms may lead to problems with data flow. The best ISP is the one that shows as little delay as possible, all day, every day. Backup ISP Always subscribe to a second ISP because your main ISP may not work all the time. If your primary ISP is down for any reason, you should have a second ISP to connect to immediately. For example, you may be in a trade when problems occur. Sure, you can call your broker and exit the trade by phone, but supposing there is a bigger problem with the ISP and it takes the whole day for the connection to become available again at the speed we need. This is a very valid reason for having a second ISP.