Trader Tips: Why You Need a Trading Computer

Professional traders may wonder, do I need a special computer for my trading? Some companies offer specialized “Trading Computers” with the premise it will make you more successful and profitable – but it may cost you thousands and include additions you simply don’t need. So we embarked on a mission to find out the answers to these questions: What is a Trading Computer, and why do you need one? Why can’t you just use your existing machine? And how do you determine what you actually need in a Trading Computer?

To get our questions answered, we spoke with Eddie Z, a full-time trader for over 30 years. He’s a complete geek with a passion for computers. Eddie has spent the last 25 years building and testing hundreds of different computers. His goal? To determine which computer components work the best together, and which configuration will give the reliability and stability that full time traders absolutely need. In 2010, he founded EZ Trading Computers in an effort to educate and help traders everywhere get their hands on the best possible Trading Computer.

So Eddie, what exactly is a “Trading Computer”?

A “Trading Computer” is a superior, extremely fast computer. It is designed and customized to maximize the trader’s ability to interface with the markets and make decisions in real time. There are four key ingredients to a great Trading Computer: speed, reliability, multiple monitors, and post-sale service & support.

That sounds nice and all, but do I really need a separate Trading Computer?

Have you ever been to a sports bar where they are showing the same game on several screens, some HDTVs and some old regular TVs, throughout the establishment? What did you notice? The game on one TV can actually be a second or so ahead of the others! This can cause a lot of frustration during an important game, or when you have a large crowd together.
“Slippage” is a similar occurrence, but instead of just being frustrating, it can cost traders a bundle of money! This is the single most important reason why traders need a Trading Computer. When you enter an order to buy or sell, and the price you get filled at is much different from what you expected, that’s called “slippage”. This usually occurs because the trader is using a mass-manufactured, lower-end computer that is not displaying price information in real time. This price data may be off by just a fraction of a second, but it’s enough to throw off your entire trading methodology. You want to avoid slippage at all costs, and a Trading Computer is a very small price to pay to accomplish this.

Wow, I had no idea it could be such an issue! What about using my existing machine? It’s fairly new and I was told it’s “top of the line”.

If you have a computer with a mainstream processor that you picked up just 2 years ago, you’re probably going to have issues. Electronics retailers, such as Best Buy and Micro Center, sell mass manufactured machines from brands like HP, Lenovo, and Dell. These companies use inferior components, inferior wiring, and low-end motherboards in their systems. These machines just cannot keep up with today’s mega levels of streaming price data. When it comes to the ultimate Trading Computer, it really boils down to what is inside the machine—the individual components. You want to buy top quality components and have a configuration that perfectly meets your needs as a trader.
We never want to think about something going wrong, but unfortunately you also need to think about the tech support that’s included with your purchase. Most of the big-name manufacturers only include a one year warranty. And have you ever tried calling their technical support line in another country? It’s either that, or you’re left in the hands of the “Geek Squad” at these mass electronic retailers. These employees have no idea what you need as a trader. Any money you think you’re saving by buying one of these mass-manufactured machines can easily be made up for in headaches.
You can have a system professionally built for you by picking the components you want and need. With superior components, tech support and warranty, you’ll have what it takes to be successful with your Trading Computer. Considering the cost of slippage, setup, downtime, headaches and frustration, you can acquire a much superior product at a lesser price.

But how do I pick components? I know nothing about computers.

Not to worry! I have published the Complete Guide to Trading Computers to help in this regard. The guide is written in layman’s terms, meaning you don’t need to be a computer geek to understand it, and is jammed packed full of useful information as well as money saving tips to help you succeed as a trader. The guide can be downloaded here: Complete Guide to Trading Computers

Big thanks to Eddie Z for helping us understand the importance of a Trading Computer, and for providing the free guide. If you’re a professional trader (or just starting out), make sure your technology is reliable and stable. And don’t forget your Trading Computer isn’t complete without TradeLog Software for your trader tax reporting needs!

Please note: This information is provided only as a general guide and is not to be taken as official IRS instructions. Cogenta Computing, Inc. does not make investment recommendations nor provide financial, tax or legal advice. You are solely responsible for your investment and tax reporting decisions. Please consult your tax advisor or accountant to discuss your specific situation.