This subject made me go to ebay and waste 3 hours browsing for used hardware And looks like I discovered another option: to buy a whole server i.e. an actual server, something like this one (these people seem to be selling whole crates of them ): The only problem with these is the horrendous noise they produce (2U\4U units should be better because they have larger, slower-spinning fans..) But if there's a free space in a dark far-away basement corner, where no one can hear it, I think it's an awesome option! (or convert it to water-cooling..) Maybe I'll actually try that as a small project in the new year, as I do need a backup for my trading computer..
@globalarbtrader @test_user I came across Ernest Chan material on carry/roll returns as a predictor. Instead of using adjacent contract, he carried out regression (on daily basis) across term structure to extract the slope. Would this be a better and more robust approach? Jr
It totally is! but I just want an excuse to play with some cool hardware also the price is hard to beat..
You can consider using it to collect tick by tick options chain data. Those cost a bomb when you purchase it from vendors.
@globalarbtrader Could I check with you - when you develop your trend following strategy in futures. Do you consciously compare your results against the Time Series Momentum (TSMOM) 1 year lookback factor developed by AQR (https://www.aqr.com/Insights/Datasets/Time-Series-Momentum-Factors-Monthly)? I'm still in the midst of developing a trend following strategy using futures (loosely based on your frameworks) and I find the TSMOM benchmark 'hard to beat' even in backtests (with optimized weights from bootsrapping or even equal weights amongst the rules). Keen to hear your thoughts on this. Jr
For live trading cloud makes much more sense. Because unless you have two or three different connections (Fiber/ADSL, 4G/5G, satellite?), connectivity is still an issue. Location is another benefit, lower latency - less chances of anything going wrong (SE Asia -> NJ vs. NY -> NJ in my case). There have been instances where whole countries/continents have been cut off for hours. I don't remember having any unplanned downtime with my cloud, it's been great and I'd never go back to using my own hardware for live trading.
I believe that the financial risk associated with a connection outage depends on your trading strategy. I trade with a very low frequency: once per day a trade or rebalancing of investments. If this gets skipped one day due to connectivity issues at that moment (or a power outage) the impact on my financial results are rather limited. The intended trade will get delayed by one day. So it is a risk I am willing to take. Low latency is thus also not of importance in my way of trading. Paying the extra money to have it running from the cloud does not compensate for this risk. If your trading strategy is different (much faster paced, having a higher financial risk in case of a few hours of outage) then it might indeed be a prudent decision to put it in the cloud instead of hardware at home.
It's very cheap nowadays though. I pay $10 a month for a single core 2GB instance. This is plenty for IB Gateway and my own Python/IBAPI solution as there's no windowing system, just the terminal.
Thanks. I did not know that the price had come down that much. I was still thinking that it would be a few hundred per month. 2 GB would also be plenty memory for the system I'm running. Anyway, I have my own hardware running and am happy with how it works, so I'm not considering changing it.