Your Trading Computer’s Internet Speed May Be Too Slow

For many of us, a high speed always on Internet connection is the key to high performance trading. With so many providers and several types of connections available sifting the wheat from the chaff is more of an art than a science. What you pay for and what you actually receive poses yet another dilemma.

Cable, DSL, Satellite, and even Wi-Max connections are available from almost one side of the planet to the other but you might be stuck with what your local service provider is willing to sell to you. Not that long ago the average household Internet connection used a dial up modem with a connection speed under 0.2Mbps with speeds of 1Mbps often only found at large corporations. If you were really serious about speed you would have to spend thousands of dollars a month on a dedicated T1 line to pump out 1.54Mbps. Times have definitely changed for the better with 20Mbps home lines running around $50 a month.

trading computers internet connection

What you choose will also determine your maximum speeds. Cable is usually at least twice as fast as DSL and can also costs half as much. Cable modem speeds can however vary depending on how “wired” your neighborhood is. Larger cities may offer connections as fast as 300Mbps while some small towns may never be offered anything higher than 50Mbps. A trading computer using a 100Mbps cable modem and a Gigabit Ethernet adapter would see a substantial drop is slippage based primarily on the data transmission rates. Drop a fast processor under your computer’s hood and you may very well be seeing data before others watching the same positions.

In more rural locations DSL is a more popular option since the connection is made through the existing phone lines and does not require a cable company to have run any wire through their areas. Speeds even on “high speed” DSL plans may not deliver faster than 6Mbps connections. DSL is fast enough to trade with but if cable is available, it is always going to be faster.

Others may have no access to a phone wire at all and instead may decide to go the satellite internet route. Dish Network, HughesNet, and ViaSat are three of the most popular data providers and offer speeds up to 15Mbps but your trading computer can be sent offline by a passing rain cloud. For a completely wireless alternative it is possible to trade on your computer using existing cellular data networks and a Wi-Max router. Most speeds top out around 3Mbps but for the trader who is able to work around the limited bandwidth it is a viable option. No matter which option best fits your circumstances any of today’s available connections are far faster than having your trading computer whistling  into the phone line at 14.4k baud.

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