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Hi Scientist You raise an interesting point as to what it would be like trading where the latency is really low - and whether it would be noticeable. Perhaps if it is noticeable Nitrus is not fulfilling his potential as a trader - having the cushion of low pings - waking up each morning and saying, well my edge is the speed of my execution (just kidding Nitro mate if you read this). I guess Scientist mate the answer would ideally be to trade under both situations and observe any differences, or test whether your two means are significantly different. You raise a good point with regards to style. One can always do some stress testing on their trade distribution: ie if you plot all your trades and look at the histogram then say well if I make my average losing trade a little bigger (and/or perhaps assign it a higher proportion) and vice versa for winning trades - how significantly does it affect my results ? can I survive ? The obvious answer to this is it will vary with one's time frame, the more shorter term you are the bigger the potential effect. This exercise assumes that over a long number of trades the higher latency is consistently costing you, albeit small. In any event there is some endogeneity here - if you're happy with your current distribution and you're not greedy I wouldn't worry about the slightly higher latency. At the limit Nitrus would be correct, but the fact is in this game Ceteris Paribas does not hold (although I am sure some might find it useful to believe it, which is fair enough). I guess my take on it is yes I would love lower latency, but if you reckon you're still competitive playing this game of musical chairs, you would have to have significant and persistent evidence that every time the music stops , or a trade comes up, you miss out or it costs you badly. And if you're not missing out, enjoy what is clearly one of the best places in the world to live , even if it does cost 150-200ms every time we deal ! Cheers
Ah heck, you fellows have it made. I trade via satelitte with pings ranging from 700ms to 1100ms all the time. I can't get cable or dsl where I live and my phone lines are so decrepit that there is no way that I can get dial-up conections to work well enough to handle even the slightest fast market's data feed. I did recently build a pretty fast pc (this baby screams compared to my old one), but I'm still old and slow myself. So, it's simply a matter of adapting a trading style that works for the given situation. IE: 20 round trips on NQ would be an active day for me. Usually somewhere between 5 and 10 is my norm. Would I like to have a faster connection? - obviously yes. Sure I'd love it. Do I have to have a faster connection? - no. As long as my data doesn't stop and I'm not getting it more than a second or second and a half late (usually 1/2 - 3/4), I don't get all worked up over it. Does my slow connection ever cost me money? - obviously yes. Does it always cost me money? I think not. I don't worry with it that's for sure. I just adapt to the situation and trade accordingly. Sometimes being a second late even gets me a better fill. IE: noise - tick - filled - thanks, here we go!
I heard about this and thought it was an interesting approach, but the last time I looked the commissions the participating brokers were charging were outrageous. Has this changed?
Hi Plumlazy, I put your final quote in the header. I think it is high time some fresh air blows through this thread filled with the most extravagant techno babble. In fact a rigorous analysis of the process from initial order release to final fill is a highly complex one. Most of these factors remain completely untouched in all this talk about latencies anywhere from 10 to 1000 milliseconds. I myself have a high speed connection. So I cannot really say anything about your satellite experience. Having gone through a detailed analysis of the whole process, as well as I could, I like the way you put it, let me repeat: "Does my slow connection ever cost me money? - obviously yes. Does it always cost me money? I think not." Whenever I ran into problems with fills, I always came away with the conviction that problems could be bettered - never quite "solved" - with hard work and very little with any superficial computer tweaking. Be good, nononsense
I have no pride. A $100 bill that I took from someone's pocket in the markets looks and spends the same whether I made it through my edge in the use of technology, or made it using my skills as a trader. In trading, there is only one way to keep score... But I will give you a hint, it is _always_ both the use of technology and skill as a trader that defines the modern screen trader more and more. nitro
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Again, some people are missing the point. No one suggests that you need a low latency connection to do 5 rountrip swing trades a day! I don't know how to say this any clearer. _IF_ you are taking advantage of some mispricing, or even a "slow" arbitrage, _THEN_ the limiting factor is how fast you can take advantage of that situation. "Someone", computer or otherwise, beats you to it, you lose. nitro
I wasn't missing the point. I was answering the question according to *my* circumstances. I know quite well that it's paramount to your style of trading to be superfast. Is Latency/Ping An Issue For Your Trading? keyword = *your* I did say that it was an issue - I just refuse to let it beat me That's *my* point. Somewhere in between *not making a difference*and of *paramount importance* is as good as it gets for some of us, therefore we have to adapt our style.