Hi, guys, I live in the EU and have an account with IB, using TWS, subscribed to their real-time market data. I am looking to trade mainly US markets due to the high liquidity. The latency to the broker's US server is 120 ms. The style of trading I'm most comfortable with holds positions from tens of seconds to minutes. I am looking to trade mainly with limit orders, stop orders and sometimes market orders to exit positions in very fast market movements. I'm curious of your opinion whether this latency can be used reasonably for the above trading style? Also, are there any improvements that can be made (apart from algo-trading from a US server)? Would you recommend any specific type of setup? Thank you for taking the time to read this.
I do day trading. In most cases, the latency is < 1 sec. Occasionally, during the US session when there was very major US news / event, internet traffic would be extremely heavy and the charting software and trading platform would freeze for a few minutes to half an hour! This is despite the fact that I have a good gaming PC and high-speed internet connection. There is hardly any latency issue during the Asian and European sessions. Well. hope this US election wouldn't create such a bad latency problem.
Yes, but not from a latency perspective (it will actually add a bit more latency). It helps with reliability - you can have your trading environment all nicely running and you can access it from anywhere. Local PC environments can be subject to fun things like Windows Updates, connectivity issues etc. At least with a remote environment you can have multiple external connections driving it (e.g. desktop using your normal internal, laptop using a redundant (4G/5G) connection). If one fails, you simply swivel to the right and continue trading. Of course I'd recommend in such a situation you reduce exposure immediately in case there are other things afoot (such as Internet routing issues where a submarine cable has been severed). If you think your mouse click speed to order placement is a real issue, let me tell you about this little thing called HFT which will beat you every time...
Another bit of advice: Figure out how to call your broker and close out ALL positions. Document it. Teach your wife/husband/significant other how to do this too. Then revise documentation. Practise it every 3 months.
Thanks for your input! We all found out about HFTs thanks to Flash Boys. I was curious if there are other manual day traders using this kind of high latency and whether it can become a significant impediment for the aforementioned trading style (holding time 30s - a few minutes).
Sierrachart, Aurora Server DC3, Limit Orders Right near the match server !!! In the same location (Aurora) So far the best and fastest I've had. SC does a very good job. I live in the EU.
If you're click-trading you shouldn't be concerned with latency at all. Just the time it takes for you to take your trading decision and manually send your order is way beyond any latency you might calculate.