High Pings & Latencies in Day Trading?

I'm not sure everyone here understands what a millisecond is, or what exactly is causing the latency. A millisecond is 1/1000 of a second. The speed of light travels at 186,282 miles per second, which is also how fast your data travels unrestricted. A few quick calculations will tell you that in one millisecond, your data should travel 1,862.82 miles. So in a little over 6 milliseconds your data could travel 12,000 miles. Since the earth is roughly 24,00 miles in circumference, 6 milliseconds should get your data anywhere on the planet (assuming it can take the shortest path). All the delays occur when your data travels through the many switches as it makes its way across the internet (all those hops you see on a tracert). Solve all of your problems by getting a direct T-1 connection to your broker. I don't mean a T-1 connection to the internet, but a direct T-1 connection. I use brokers in Chicago and New York, and I am in Florida. When I ping either broker, I see one hop<10ms. A direct T-1 is switched permanently so that one always open path is established between you and your broker. An internet T-1 gets you out of the house reliably, but then it hops all over hell and back on the internet just like your neighbors dial up 28k modem does. The only way to get around the latency for good is to live very close to where you trade (so fewer hops are needed) or fork over the extra dough for a direct T-1.

Regards
 
Taking that response test, I come in at an avg of 500ms. So much for nit picking about 100-200 ms transmission time differences. You guys are trading against Cray's hardwired to the Globex server anyhow, so don't sweat it.
 
Quote from stock777:

Taking that response test, I come in at an avg of 500ms. So much for nit picking about 100-200 ms transmission time differences. You guys are trading against Cray's hardwired to the Globex server anyhow, so don't sweat it.
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hey stock777, thanks for the words, but I have already gone in on exactly all this on this thread - you, the 'executor' being the weakest link.

However, regardless of how fast you are, the guys with the faster ping will clearly get their order in before you do and grab your trade - given they're otherwise (in their brain, decisions) just as fast as you are.

Example:
Your decision time = 500ms + latency 350ms = 850ms total
Enemy's decision t= 500ms + latency 30ms = 530ms total

Is anybody getting my point here, or am I just speaking French? Just looking at this simple logic, there clearly is an advantage in having faster ping, no matter how much faster your brain is (and particularly if it's slower). If you get your order in 320ms, 100ms, 50ms, or 5ms later, it really doesn't matter, right? "Later" is "later", is equal "too late"...

The point is not who's fast, and/or how fast. The only point in trading is who is the fastest - in total execution time.
 
Quote from Joetrader:

The speed of light travels at 186,282 miles per second, which is also how fast your data travels unrestricted. A few quick calculations will tell you that in one millisecond, your data should travel 1,862.82 miles.
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1. Back when I was a practicing electrical engineer, the rule of thumb was that signals on a printed circuit board travel about 1/3 the speed of light.

2. You can calculate the speed at which signals propagate in a long-distance fiber-optic link if you know the index of refraction of the medium.

3. The minimum round-trip transit time to/from a geosynchronous satellite is about 240ms, regardless of where the earth endpoints are located.
 
Quote from prophet:


As far as I know, IB throttles each client’s connection by not sending every tick. This helps avoid individual client overuse of bandwidth, saturation of local connections and server overload during extreme market activity. As a result IB will not lag as much as other data providers who try to push every tick and risk having their servers unable to meet peak demand.

This is why I hope IB does not start sending every tick like many traders have asked for. At least if they do, it should be an option for only those who require it.

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Good point.
 
Quote from Joetrader:

When I ping either broker, I see one hop<10ms. A direct T-1 is switched permanently so that one always open path is established between you and your broker. An internet T-1 gets you out of the house reliably, but then it hops all over hell and back on the internet just like your neighbors dial up 28k modem does. The only way to get around the latency for good is to live very close to where you trade (so fewer hops are needed) or fork over the extra dough for a direct T-1.

Regards
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Excuse my ignorance, but is a direct T-1 the same as a point to point T-1 connection?

How is that priced? Does price increase with distance? For example would it cost more for a direct T-1 from overseas to Chicago or even just CA to Chicago than it would from NY to Chicago?
 
Quote from okwon:

Excuse my ignorance, but is a direct T-1 the same as a point to point T-1 connection?

How is that priced? Does price increase with distance? For example would it cost more for a direct T-1 from overseas to Chicago or even just CA to Chicago than it would from NY to Chicago?
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Yes, but not the same as a T1 to the internet.

Priced by distance and the local loop.

USVI to St. Charles was $20K month.

St. Charles to downtown around $1K month.

Miami to St. Charles $4K month.

Bahamas to St. Charles $15K month.


Got the concept ...
 
You're all missing the point.

The guy with the fastest connection and hand speed doesn't win.

The guy with the best entry and exit strategy does.

If I can identify a bottom 3 seconds before everyone else, then I win.

It's as simple as that.



Runningbear
 
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