Choosing the Right Computer for Trading

I’ve been asked many times what to look for in a computer for trading. It’s been a long time since I last written about it for someone choosing a laptop for trading, I think it is time to update the information as the development in the technology landscape has changed quite a lot. The original article is still valid with all the points made back then, so refer to that article for more information later.

Android, iOS, Linux and Other Operating Systems

Trading apps popping up on every possible OS platforms since the availability of several cross platform development tools were created. The problem is that these apps are not built properly for heavily duty trading because they are made to attract beginner traders. They are a form of convenience but they cannot replace the well established trading platforms which have matured in functionality and robustness over many development cycles.

In another words, if you plan to day trading or trading heavily, it is better to get a computer with Microsoft Windows where the major trading applications are built for. Keep the portable trading apps on your cell phone or tablet just in case you have to check on your open positions when you are not at your trading desk.

Windows 7, 8.x and Beyond

Windows 7 is now stable and functional as a replacement of Windows XP. 32-bit version of Windows 7 and beyond should be avoided as they are not designed to perform in 32-bit. 64-bit Windows 7 has many advantages over Windows XP that it is now the preferred OS for trading.

Windows 8.x sucks in every way at the moment. Windows 8 is still suffering from bad drivers and random crashes if you happen to have certain hardware that does not have a good driver written for it. In this sense, it is important to stick with Windows 7 whenever possible for production level trading computers.

For those interested in using the Remote Desktop technology to turn one computer into a server powerhouse, you need to get Windows 7 Pro or one of the server versions. I know there are hacks out that that can make the home versions doing remote desktop but it may cause trouble down the road when your Windows is patched.

Although Windows 7 is no longer the version bundled with major brand retail computers, the standalone version can be found at a discount from many software discount stores. It should not be a problem to get it.

For certain releases of Windows 8.x bundled with computers, you can actually downgrade to Windows 7. That is the alternative path to get Windows 7 right now.

Memory Is King

In old days, 32-bit Windows cannot utilize more than 3.5G RAM. That limitation makes it impossible to do many cooperative tasks among the applications running on Windows. Now that 64-bit Windows 7 can address a lot more memory, it is possible to do more cooperative tasks among multiple trading applications. It also means more memory is a necessity for trading computers.

One reason for having more RAM in general is that new programs, including trading applications, written for 64-bit Windows are less thoughtful about memory constraints. Programmers do not feel the need to conserve memory as much since the 3.5G barrier is gone. Hence, the footprint of many applications are using much more memory with the 64-bit version than the 32-bit version.

4G RAM is not sufficient for Windows 7 to run smoothly. Windows 7’s own footprint, including the extended services loaded by Windows, is about 3G. If you operate only a single trading application with maybe one or two browser instances, you can survive on 6G RAM. If you do more than that during trading, 8G RAM is necessary to ensure stability. Having 12G or more RAM will allow you to run multiple trading applications smoothing without worrying about sudden slow down of the computer due to thrashing.

Notice that some lower end computers have a limitation of 8G RAM physically. Make sure you do not buy these computers by mistake as you will not be able to expand the computer with more memory later on even if you want to.

More Cores Is Better

The growth in CPU hardware transistors is no longer doubling every two years as predicted by Moore’s law. CPUs no longer run faster by sheer increase in their horsepower measured by their clock cycles. Instead of chasing after raw speed, the newer CPUs are designed to work more efficiency and with more cores so that they can process more tasks simultaneously.

Newer computer applications finally catching up to take advantage of the multi-core CPUs. Thus it is important to get computers with multiple cores if you expect to run your trading applications smoothly. Windows 7 and beyond consume at least 1 CPU core almost all the time and at times need to use 1 to 2 more cores to handle extra tasks. With just 2 cores, your trading application will be locked up (i.e. not responding from time to time) when Windows is busy handling its background services.

In short, you need CPU with at least 4 cores on your trading computer for trouble free performance. If you plan to run quite a number of applications at the same time, you need to consider getting the computers with 8 cores. The 8 cores CPU is still considered as higher end products with a significantly higher price tag right now.

Summary

The landscape of desktop computers has changed a lot since the phase out of Windows XP. The consequence of having 64-bit OS and multi-core CPUs has changed what we expect as a minimum for business class computers, which is essentially what traders need for trading. It is not a bad thing so far, even though we are looking at significant increase in processing power and physical RAM requirement, the overall cost for acquiring a functional computer dedicated for trading is still following the general principle of buying a middle-tier computer being the sweet spot for balanced functionality and cost efficiency.

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