The importance of 'ping' - latency/connection speed in trading.

[gnome]

Quote from alanm:

Quote from gnome:
... After all, it takes an average .70 seconds (700 ms for you math impared) to execute a voluntary motor response.

Thinking that this number seemed kind of high, I threw together a simple program that prints a timestamp at random intervals, and then prints another one and shows you the difference after you hit a button.

My response time was consistently 300-400ms. Some might say I'm old and slow, too

Sorry, I misstated... I should have said "involuntary motor response"... as in a reaction to something (like seeing a quote and clicking off on it.... or stomping on the brakes when a ball rolls out in front of your moving car). The fastest involuntary response I can recall off-hand was some guy who won a quick-draw hand gun competition.... 0.29 seconds.... measured from the time a light signal came on and the bullet passed through an electronic target. That guy was so fast, he could put a bullet into a fella that "had the drop on him" before the other guy could react and squeeze off a round.

 

[Holmes]

Quote from tomcole:

Cant beat fiber or high end equipment - if you call Cisco and tell them what you're doing, they steer you to $2000 routers and up to grab the few ms you can.

Ask them why big traders tech support always buys the latest and greatest, regardless of cost - cause they have to stay competitive!

This game has changed from cowboy traders to cowboy techs and if you dont "get tech", they'll smoke you every day.

Nonsense. Human psychology has stayed the same over thousands of years and it will stay the same until the end. Trading is the oldest profession.

It is interesting to know that since the advent of the personal computer there have not been any more succesful traders than there were before the introduction of the computer.

 

[Bitstream]

Quote from Holmes:



It is interesting to know that since the advent of the personal computer there have not been any more successful traders than there were before the introduction of the computer.

Exactly, statistics have proven traders that started trading electronically after being successful by simply calling their brokers by phone, following a small period of success they would perform worse overall.

If the link come back to my mind I'll post it.

 

[rufus_4000]

Why I am jumping in I have no idea.

But the 700 ms "involuntary motor response" can be lowered significantly via intensive training. I am in NY, and the World Cyber Games (the video game Olympics) was here this week.

Some of top world ranked players (not one of them over age 22, I think) have shown to have "Action per second" (a manual initiated action) of > 10.

Now, I haven't been playing any video games for 5+ years. But just watching the games have shown to me that the decision making in these games are not simple by any means, there are significant strategies / tactics to be followed, similiar to trading.

Just seeing a weird parallel.

Rufus

Quote from gnome:

Sorry, I misstated... I should have said "involuntary motor response"... as in a reaction to something (like seeing a quote and clicking off on it.... or stomping on the brakes when a ball rolls out in front of your moving car). The fastest involuntary response I can recall off-hand was some guy who won a quick-draw hand gun competition.... 0.29 seconds.... measured from the time a light signal came on and the bullet passed through an electronic target. That guy was so fast, he could put a bullet into a fella that "had the drop on him" before the other guy could react and squeeze off a round.

 

[nononsense]

Quote from Holmes:

Nonsense. Human psychology has stayed the same over thousands of years and it will stay the same until the end. Trading is the oldest profession.

It is interesting to know that since the advent of the personal computer there have not been any more successful traders than there were before the introduction of the computer.

Quote from Bitstream:

Exactly, statistics have proven traders that started trading electronically after being successful by simply calling their brokers by phone, following a small period of success they would perform worse overall.

If the link come back to my mind I'll post it.

Let it be said once more. In practically all cases the impact of internet ping/latency on trading is complete nonsense. This crap comes up regularly on ET threads.
Most of the posters are daydreamers who have never smelled a trading profit in their lives.

 

[tomcole]

I beg to disagree.

The fastest, biggest meanest PC, router etc etc is key to trading. No expense is too great for technology. Those who skimp on their equipment or connection are at a clear disadvantage. If the extra one or thousand means alot to you, you're not that serious about trading.

IMHO, the advent of tech to trading has created a layer of traders who remain silent, somewhat successful and are competing well with their big buck colleagues.

As for talking about profits, IMHO, thats simply bad luck and poor manners.

 

[aPismoClam]

ping means absolutely nothing on the floor.

 

[FredBloggs]

Quote from rufus_4000:

Why I am jumping in I have no idea.

But the 700 ms "involuntary motor response" can be lowered significantly via intensive training. I am in NY, and the World Cyber Games (the video game Olympics) was here this week.

Some of top world ranked players (not one of them over age 22, I think) have shown to have "Action per second" (a manual initiated action) of > 10.

Now, I haven't been playing any video games for 5+ years. But just watching the games have shown to me that the decision making in these games are not simple by any means, there are significant strategies / tactics to be followed, similiar to trading.

Just seeing a weird parallel.

Rufus

LRD did an article on some of the london arcades and prop shops.

many of them now recruit via adds in video games mags. your explanation is one reason, the other is that they want kids who can sit and focus at a screen all day.



lets face it though - this whole thing comes down to 1 issue and 1 issue alone......

whats your strategy?

a scalper is going to need every speed edge he can.

average intraday trader (off 3m+ chart) probably doesnt and can make do with cabl or adsl

swing trader probably get away with 56k dial up (do they still exist?)

eod traders can phone in orders.

warren buffet sends his orders in by getting a lawyer to draw up a contract which could last for months!!! the orders may then be sent via fedex or ups on the overnight!!! hows that for speed?

you get the picture.

 

[nononsense]

Quote from tomcole:

I beg to disagree.

The fastest, biggest meanest PC, router etc etc is key to trading. No expense is too great for technology. Those who skimp on their equipment or connection are at a clear disadvantage. If the extra one or thousand means alot to you, you're not that serious about trading.

IMHO, the advent of tech to trading has created a layer of traders who remain silent, somewhat successful and are competing well with their big buck colleagues.

As for talking about profits, IMHO, thats simply bad luck and poor manners.

I only use the best hardware. It's cheap, so why be stingy about it?
I gave my honest considered opinion about ping/latency nonsense. Has nothing to do with manners.
Tom cole, you don't seem to get the point: trading profitably is all tied up with computers.
Silicon hardware matters a bit, but far more important is the performance of the computer between your ears!

 

[nononsense]

Quote from FredBloggs:

LRD did an article on some of the london arcades and prop shops.

many of them now recruit via adds in video games mags. your explanation is one reason, the other is that they want kids who can sit and focus at a screen all day.



lets face it though - this whole thing comes down to 1 issue and 1 issue alone......

whats your strategy?

a scalper is going to need every speed edge he can.

average intraday trader (off 3m+ chart) probably doesnt and can make do with cabl or adsl

swing trader probably get away with 56k dial up (do they still exist?)

eod traders can phone in orders.

warren buffet sends his orders in by getting a lawyer to draw up a contract which could last for months!!! the orders may then be sent via fedex or ups on the overnight!!! hows that for speed?

you get the picture.

Fred,

I just happened to stumble accross the following not unrelated to the idea of hiring fast kids to take care of the the trading:

Quote from Pekelo:

Here is a maybe novel idea for a trading strategy, based on the fact that 95% of new traders eventually blows out.

So a prop firm or brokerage should just employ a bunch of new traders and let them trade with the firm's money, but they would also take the opposite side of each and every trade, but let's say with twice the money.

...

It may help a few in getting the picture.