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Thomas Bulkowski’s successful investment activities allowed him to retire at age 36. He is an internationally known author and trader with 30+ years of stock market experience and widely regarded as a leading expert on chart patterns. He may be reached at

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Written by and copyright © 2005-2017 by Thomas N. Bulkowski. All rights reserved. Disclaimer: You alone are responsible for your investment decisions. See Privacy/Disclaimer for more information.

My book, Swing and Day TradingSwing and Day Trading: Evolution of a Trader book., shown on the left, describes surveys I conducted about the necessary ingredients of a home office, including hardware.

If you click on this link and then buy the book (or anything) at Amazon.com, the referral will help support this site. Thanks. -- Tom Bulkowski

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With technology changing rapidly, the below information is either out of date or soon will be. Keep that in mind. But you may find some of the tips helpful anyway.

This study looked at 50 trading setups to determine the hardware configuration that traders use most often. It answers the question of how many monitors should you have, what size, how many computers, and so on. The results are listed alphabetically.

 

Trading Hardware Background

For this study, I used Active Trader magazine's The Face of Trading column to determine the hardware and software configuration. The study uses data from June 2000 (1 setup) through February 2008, covering 50 trading setups, with most coming after May 2003. With technology advancing, this is a bit dated.

This would be my preferred setup for a serious trader:

  • Two desktop computers, one for charts and the other for charts and order entry. If one dies, you should be able to complete any open orders on the other machine with minimal effort. Keep that stress low in a crisis. Perhaps practice switching so you know what to do and how things work.
  • At least 2 gigabytes of ram per machine.
  • Get a fast processor (at least 2 gigahertz), but this is not that important. Most of the time, the processor will be twiddling its thumbs.
  • Two or three 22" monitors (one for the order entry machine and the others for drawing charts).
  • Broadband connection with a direct access broker. Speed and low transaction cost are important.
  • UPS (un-interruptible power supply) in case power fails. And make sure it is hefty enough to power your system for several minutes.
  • External backup drives (thumb drive?) for each computer. Make weekly backups.
  • A home office, separate from other living areas. When you're here, you're here to work. Look for office space with few interruptions.
  • Comfortable, ergonomic office desk, chair, and accessories.

For the external hard drive, I have one for each of my two computer systems. I use the USB port to back up each computer weekly and then unplug it (both power and USB cable), so if my system gets hit by lightning, I can recover whereas an internal hard drive (HD) might be fried. You can pick up external HDs for about $1 a gigabyte at Wal-Mart. Be sure the connector supports the computer you have (USB 1.0, 2.0, firewire) and you get a drive large enough to hold all of the information on your internal hard drive.

A better choice than a mechanical hard drive is to use a thumb drive. These "sticks" plug into the USB port and make for handy backup drives. They can crash (go bad), too, so keep that in mind.

If you want to surf the Internet, then do so from a third machine (separate from the ones you trade with). That way, you can disable from your trading systems some of the virus checking software and other crap that clogs today's computers. Avoid having the virus software begin downloading an update in the middle of a trade. Keep a firewall to help prevent others from accessing your machine.

You can also turn off many of the programs loaded at startup (run services.msc or msconfig.exe). Streamline the system for speed. Do you really need the print spooler running on your computer that does not have a printer? Can you live without audio? I have found that www.blackviper.com has a wonderful website to help you sift through the software that runs in the background. Just remember to write down your current settings before changing anything. And if something should break, remember to run services.msc or msconfig.exe to turn it back on (like you may lose the Internet connection if you disable DHCP Client). Lastly, be careful. You can really hose your system if you decide to turn off the wrong stuff. If you use common sense and check both services.msc and blackviper, you can muddle through it without problem. I did.

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The following are the results of the survey I conducted.

Brokers

Who should you use to handle your trades? Here are the top three choices.

  1. Interactive Brokers was used most often (8 setups).
  2. Terra Nova Online got 7 votes.
  3. TradeStation received 4 votes.

Everything after that received only one or two votes. Absent were the big boys: E-Trade, TD Ameritrade, Scottrade, Fidelity. Schwab appeared twice in the list, though. A look at the Bonus Issue 2007 of Technical Analysis of Stocks & Commodities magazine confirms the rankings of brokers. Interactive Brokers and TradeStation appear as the top two in various categories in their 2007 readers' choice awards.

Computer Memory (ram)

How much memory should your computer have? Clearly, the more memory the better, and it varied from the early days (2003) to now, but not by as much as you would think. No system had more than 2 gigabytes.

It seems that new operating systems have an obesity problem. Two gigabytes may not be enough, so consider more. As I said, this information is dated.

  1. 1 gigabyte was the top choice. It was used in 20 setups.
  2. 512 megabytes was second. It appeared in 16 setups. Many tech-savvy traders will tell you that this is too small for today's computer systems.
  3. 2 gigabytes was third, appearing in 9 setups. This will probably be the memory size of choice for future systems.

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Computer Speed

As new computers are introduced, the cpu (central processing unit: It's the brains behind the computer system) speed will also increase. Many knowledgeable about personal computers will tell you that speed is no longer an issue. CPUs are plenty fast, in other words. Nevertheless, I have loaded up an Excel spreadsheet with 60 to 150 megabytes of data and waited for 20 to 40 minutes for the numbers to crunch. My system has 1 gigabyte of ram and 2.40 gigahertz Celeron processor. Of course, the Excel software could be the cause. I often had to reboot because the program seemingly froze. Anyway, look for a fast processor. The fastest setup used a 3.6 gigahertz cpu .

  1. Speeds between 2 and 3 gigahertz were chosen by 18 traders
  2. In second place were CPUs with speeds of 1 to 2 gigahertz (17 traders)
  3. In last place were 6 systems with CPUs over 3 gigahertz

The cpu speed was probably a function of how old the machines were. Older machines worked at impulse power while newer ones were equipped with warp drive (that's a metaphor, so don't go looking for a computer with warp drive. People will point at you and laugh).

Computers

How many computers should you have? No trading setup had more than 4 computers. Few laptops appeared in the survey. Many systems used the same desktop make/model in multiple computer setups. Desktops accounted for 43 systems, 13 were laptops, and 2 were hand held computers.

  1. 26 of trading setups had 1 computer.
  2. 22 had 2 computers
  3. The remainder (3 sites) had 3 or 4 computers

Connection

Only 3 out of 50 systems had more than one connection to their broker. The telephone was not counted. Clearly if your main line goes down, you will want to have another way to contact your broker. Have your broker's phone number handy. From the list below, a fast connection is almost mandatory for serious traders.

Forty-four percent had direct access. What in the world is direct access? According to Stocks & Commodities magazine, "Direct-access stock brokerages route orders through electronic communications networks (ECN) or through small order execution systems, getting trades directly to market, often resulting in better prices and better execution for stock traders." Now you know.

  1. 28 used cable modems
  2. 20 used DSL (17) or broadband (3)
  3. 3 used broadband satellite
  4. 2 had T-1 lines (I am told these are hideously expensive)
  5. One had dial up (she called her location "internet challenged." That was in 2003.)

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Monitors

How big and how many monitors should your setup have? None of them had more than 5 monitors, and that included laptop screens.

  1. 15 trading setups used 1 monitor.
  2. 12 had 4 monitors (2 for each eye!)
  3. 11 used 2 monitors
  4. 10 had 3 monitors
  5. 3 used 5 monitors

What size was the monitor? The smallest was 15" (8 trading setups) with the largest being 24" (one lucky person had that, but when he turns it on, the lights dim!). Expect the size to grow and as size grows, you will need fewer of them.

Things to check when ordering a monitor: Make sure it is compatible with Vista and that the video card supports the resolution. You will need special video cards for multiple monitor setups being run from one computer. I have a 22" monitor and I love it. It's big enough that I rarely use my second, 15" CRT.

  1. 33 setups used 17" monitors.
  2. 28 used 19" monitors
  3. 28 had 20" or larger monitors

Software

The number of software packages were varied with many setups having several different applications/vendors. Here are the most popular.

  1. 17 use TradeStation
  2. 8 use RealTick
  3. 6 use eSignal

-- Thomas Bulkowski

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Written by and copyright © 2005-2017 by Thomas N. Bulkowski. All rights reserved. Disclaimer: You alone are responsible for your investment decisions. See Privacy/Disclaimer for more information. AM stands for "Ain't Moving."