Download/Upload Speed - Latency - Scalping?

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EminitraderDM

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I have been paper trading for the past 6 months and it has gone really well. I am looking to scalp trade for 2 - 4 ticks at a time using limit orders for entries and exits.

I have read a lot over the past few weeks about latency issues when taking short term trades. I did a speed test and included the link below. Are these speed results sufficient for my strategy?

http://speed.io/pics/1504/6211/speed.io.png
 
Why are you concerned about speed when you are trading with limit orders? Doesn't make sense.
 
I guess I shouldn't be worried as long as the orders are pre- set. Unless I want to get out of a trade fast and hit the market order button.
 
EminitraderDM said:
I guess I shouldn't be worried as long as the orders are pre- set. Unless I want to get out of a trade fast and hit the market order button.
Click to expand...

The ping time is the most interesting figure. You need to ping your brokers servers. Pinging a speed test server is not much use. 21 msec is good, but the speed test server may be 50 metres down the road for all I know.

Be aware that ping times are not the be all and end all. There will be other latencies including processing time at your broker (eg check your margin, route your order to the exchange), latency between your broker and the exchange and processing time (eg order matching) at the exchange. And probably some other delays that I've not mentioned, including random delays due to congestion at your ISP or in other parts of the net.
 
dcraig1 said:
The ping time is the most interesting figure. You need to ping your brokers servers. Pinging a speed test server is not much use. 21 msec is good, but the speed test server may be 50 metres down the road for all I know.

Be aware that ping times are not the be all and end all. There will be other latencies including processing time at your broker (eg check your margin, route your order to the exchange), latency between your broker and the exchange and processing time (eg order matching) at the exchange. And probably some other delays that I've not mentioned, including random delays due to congestion at your ISP or in other parts of the net.
Click to expand...

Phil Mibbutz said:
Broadband speed is going to be the least of your worries, IMO...
Click to expand...

This is actually really good stuff. Alot more helpful then on elitetrader haha.

I guess the best thing I can do is speak to the broker and get as much information I can about internet requirements to get the best fills. Additionally, it may be easiest to go live with a contract and find out first hand how fast my orders get filled and whether or not im comfortable with it.
 
EminitraderDM said:
This is actually really good stuff. Alot more helpful then on elitetrader haha.

I guess the best thing I can do is speak to the broker and get as much information I can about internet requirements to get the best fills. Additionally, it may be easiest to go live with a contract and find out first hand how fast my orders get filled and whether or not im comfortable with it.
Click to expand...

EminitraderDM, I think you are missing the point. Your order being filled is dependant on there being someone there to fill it and you only trade with limit orders if you are concerned about fill price rather than fill speed. What you are basically saying is that you want to send your order to the market as fast as possible but once it gets there you want it to sit there and do nothing until the price is right. It doesn’t make any sense. There are so many people trading from so many different locations around the world each with different internet connections that you may as well ignore internet requirements as they will cancel each other out. Sure, you may have the dubious honour of getting the 1st order in but what good is that if it's in the wrong direction anyway.
 
I agree with you. What I plan to do is not "true" scalping anyway so ultimate speed certainly isn't important. When I place my limit order I also place a target at the same time and wait for it to get hit. I guess you could say im taking short term trading to the extreme but certainly not scalping.

new_trader said:
EminitraderDM, I think you are missing the point. Your order being filled is dependant on there being someone there to fill it and you only trade with limit orders if you are concerned about fill price rather than fill speed. What you are basically saying is that you want to send your order to the market as fast as possible but once it gets there you want it to sit there and do nothing until the price is right. It doesn’t make any sense. There are so many people trading from so many different locations around the world each with different internet connections that you may as well ignore internet requirements as they will cancel each other out. Sure, you may have the dubious honour of getting the 1st order in but what good is that if it's in the wrong direction anyway.
Click to expand...
 
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