Internet Service Provider (ISP) minimum to day trade

[Ryan W 76]

Hi everybody! This has been a commonly asked question, so I am going to highlight some benchmarks in this thread to hopefully help those who aren't sure of what type of internet connection they need to day trade successfully.

Please feel free to go to http://www.speedtest.net and post your results for us to review and confirm your connection will be able to handle day trading.

 

Latency (Ping): Latency (or ping) is the amount of time it takes for a data packet to travel from your computer, across your internet connection to the receiving computer (or server). This is measured in milliseconds (ms) and is the most important component to your internet connection if you wish to day trade.

Ideally, you want a latency below 20ms; the lower the better. Most high-speed, wire-based broadband connections like cable, DSL, Fiber (FiOS), and T-1 will offer low-latency connections.

You want to avoid any type of satellite based internet service provider, or a provider that uses wireless transmission (such as an antenna on your roof that you point at a tower). You also want to avoid cellular based internet (3G, LTE, etc.)

Only in an emergency, such as your primary internet connection is down should you ever rely on a cellular or other wireless based connection to place an order.

The more time it takes for data to travel from your computer to your broker's server, the longer it will take for your orders to execute and the possibility the data you are seeing may be delayed.

 

Bandwidth Speed: The amount of bandwidth often measured in Megabits per second (MBPS) is the speed at which data can travel across the internet connection from your computer to your broker's server. The higher this number, the more bandwidth you have available. Think of bandwidth as a multi-lane highway; the more lanes you have, the more cars you can pack onto the highway without slowing everything down.

There are 2 pieces to bandwidth: upload and download. The download speed (which is often higher than the upload) is the speed at which your computer can RECEIVE data from another computer or server.

The upload speed is the speed at which your computer can SEND data to another computer or server. The upload speed is often half or a quarter of the download speed.

In the United States, more and more ISP's are offering higher levels of bandwidth. many cable companies are offering 100MBPS service in urban and suburban areas. The upload speeds are usually around 15-50 MBPS on most cable internet connections.

When it comes to what is acceptable for trading, ideally you want to have bandwidth (speed) that is greater than 15 MBPS download, and at least 2.5MBPS upload. This will rule out T-1 and many DSL providers, but it will ensure you will have the bandwidth required to properly run and execute your trading platform. The higher you can get these numbers, the better. You DO NOT need a gigabit internet connection to trade successfully. If it is available and affordable, then definitely do it. But you do not need this amount of bandwidth if you are JUST trading.

 

I have 2 internet connections here at my house. I have Cablevision (Optimum) with 100MBPS download and 35 MBPS upload, and I have Verizon FiOS with 60MBPS download and 60MBPS upload. I have my network configured so that my trading computer is the ONLY computer to use the Verizon internet connection so I get all the bandwidth available. However, if the Verizon internet connection goes down, I can easily switch over to the Cable connection with a minor change on my trading computer.

 

Things that can affect speed/bandwidth and latency:

Streaming audio or video: The chat room can sometimes be a pinch point because there is both audio AND video running. These both consume high amounts of bandwidth. If you only have 1 chatroom running it will be ok, but more than one will cause a problem.

 

Streaming music services: Sites like Pandora, Spotify, even YouTube stream the data which means your computer is constantly receiving information to provide the content like music and video. If you don't have these running, then you won't kill your bandwidth.

 

Cloud Backup Software: Software like Carbonite, CrashPlan, Jungle Disk, etc. will be sending data as it is being modified on your computer constantly to the backup server. Most of these applications will allow you to set a schedule of when to backup. I would recommend setting the schedule of these programs to backup outside of market hours.

 

Websites with streaming data (including social media): Many sites like StockTwits, Live charting sites like TradingView, Facebook, etc. all stream data to your computer. While not as intensive as audio and video streaming, these will impact your bandwidth consumption.

 

Cloud Sync Programs: Programs like Microsoft OneDrive/SharePoint, Google Drive, iCloud, etc all synchronize with the server whenever files are being changed. If you have a lot of data or synchronization going on, this will affect your bandwidth.

 

Windows Update: Microsoft Windows Update (especially on Windows 10) seems to always like to run in the background. You can change the setting to only check for updates during specified times, but often your computer will still check and occasionally download these often large update files during random intervals. There is no SAFE way to stop this from happening (short of disabling Windows Updates which I DO NOT RECOMMEND). Just be mindful that if you experience an internet slowdown, it may be a result of Windows Updates being downloaded.

 

 

The bottom line here is if you have a slower or high-latency connection, try to minimize the amount of bandwidth intensive programs that are running to ensure your trading platform data will be optimized and providing you with the most up-to-date information. Also make sure you don't have any other computers, phones, tablets, etc on your home network that are pulling a lot of data. If your wife or kids are streaming NFLX in the other room, well you are going to experience some latency and bandwidth issues. So be mindful of this.

 

Also, make sure your trading computer is hard-wired to your router with an Ethernet cable. DO NOT USE WIFI to connect your trading computer to your internet. WiFi is substantially slower and highly susceptible to interference from other devices. You want a direct connection to your internet router. 1 switch in-between your computer and router is fine, but the more switches (or hops) that you add, the more latency you are adding to the data going/coming into your computer.

 

This should cover most of the internet related questions/issues. As I said at the top of the post, please use http://www.speedtest.net to run a speedtest and post your results if you are unsure if your connection is suitable for day trading.

[ALG 1]

Ping = 21 ms

Download = 88.68 Mbps

Upload = 11.49 Mbps

 

Spectrum

[Mario M 1]

Great post, Ryan, thank you.

I am not in good shape here, but no other choice at the moment. At least I am aware of it and do trade according to the limitations. I monitor my latency in DAS, just one more thing to keep an eye on for whom has a poor ISP.

My ping varies around 150, but I have seen it all the way to 900 ms. Download= 18 Mbps, Upload= 2.30 Mbps.

I am trying to get into positions using limit orders that I establish before the expected move happens, a lot of times it’s not possible so I just go in by my hotkey and risk losing some of the move, the risk/reward is always better when I do get-in in time with limit orders though.

[Ryan Stillions 2]

Mario,

 

A ping latency of 900ms is a red flag that something is seriously wrong. As an extremely loose gauge to go by:

 

20-50ms is extremely good.

50-300ms is average.

300-500ms is indicative of congestion or issues. "Latency sensitive" applications will start to be impacted. Others may not.

> 500ms something is probably wrong, most applications will be impacted.

> 1000ms, stop what you're dong and seek technical support, because something is jacked up.

 

Also, it can be helpful to watch your latency over time. Open a command prompt window (windows) or terminal session (Mac) and run a consistent ping to a remote place on the internet for several minutes. For example:

 

C:\> ping www.bearbulltraders.com

 

Leave that window off to the side where you can watch it for a few minutes. Is your latency fluctuating up and down? Does it stay flatlined for the most part? What happens to it when you join the chat room, or start other bandwidth intensive activities (like Ryan W mentions above) streaming video, etc.?

 

Also while this test is going on, watch for complete drops. Meaning one of the PING attempts did not respond back. This can indicate network issues as well. When you quit the ping session in Windows and Mac it should provide a summary of statistics, telling you if you have any packet loss and what your minimum, average, max, and stddev is.

 

For example, here's what my ping latency looks like when I'm pinging this website from the midwest US.

 

ping www.bearbulltraders.com

PING bearbulltraders.com (162.144.104.203): 56 data bytes

64 bytes from 162.144.104.203: icmp_seq=0 ttl=56 time=77.145 ms

64 bytes from 162.144.104.203: icmp_seq=1 ttl=56 time=76.460 ms

64 bytes from 162.144.104.203: icmp_seq=2 ttl=56 time=79.803 ms

64 bytes from 162.144.104.203: icmp_seq=3 ttl=56 time=87.118 ms

^C

--- bearbulltraders.com ping statistics ---

4 packets transmitted, 4 packets received, 0.0% packet loss

round-trip min/avg/max/stddev = 76.460/80.131/87.118/4.223 ms

 

 

 

And here's what my latency looks like when I reroute my internet traffic so I come from the Ukraine:

 

ping www.bearbulltraders.com

PING bearbulltraders.com (162.144.104.203): 56 data bytes

64 bytes from 162.144.104.203: icmp_seq=0 ttl=47 time=461.353 ms

64 bytes from 162.144.104.203: icmp_seq=1 ttl=47 time=429.296 ms

64 bytes from 162.144.104.203: icmp_seq=2 ttl=47 time=460.202 ms

64 bytes from 162.144.104.203: icmp_seq=3 ttl=47 time=453.565 ms

^C

--- bearbulltraders.com ping statistics ---

4 packets transmitted, 4 packets received, 0.0% packet loss

round-trip min/avg/max/stddev = 429.296/451.104/461.353/12.937 ms

 

 

 

Similarly, here's my latency when I come from Zurich, Switzerland:

 

ping www.bearbulltraders.com

PING bearbulltraders.com (162.144.104.203): 56 data bytes

64 bytes from 162.144.104.203: icmp_seq=0 ttl=48 time=524.932 ms

64 bytes from 162.144.104.203: icmp_seq=1 ttl=48 time=524.972 ms

64 bytes from 162.144.104.203: icmp_seq=2 ttl=48 time=522.643 ms

64 bytes from 162.144.104.203: icmp_seq=3 ttl=48 time=538.678 ms

^C

--- bearbulltraders.com ping statistics ---

5 packets transmitted, 4 packets received, 20.0% packet loss

round-trip min/avg/max/stddev = 522.643/527.806/538.678/6.347 ms

 

 

 

While we're at it, here's from Hong Kong:

 

ping www.bearbulltraders.com

PING bearbulltraders.com (162.144.104.203): 56 data bytes

64 bytes from 162.144.104.203: icmp_seq=0 ttl=54 time=431.522 ms

64 bytes from 162.144.104.203: icmp_seq=1 ttl=54 time=430.753 ms

64 bytes from 162.144.104.203: icmp_seq=2 ttl=54 time=430.885 ms

64 bytes from 162.144.104.203: icmp_seq=3 ttl=54 time=434.329 ms

^C

--- bearbulltraders.com ping statistics ---

4 packets transmitted, 4 packets received, 0.0% packet loss

round-trip min/avg/max/stddev = 430.753/431.872/434.329/1.448 ms

 

 

 

Notice how when I come from these places my pings require a couple hundred more milliseconds to get all the way around the planet and back. I used these as an extreme example to show that 1.) it doesn't take very long at all for traffic to get all the way around the world, and 2.) if you're having ping latency >900ms then something is wrong.

 

There are also 3rd party tools you can use to monitor latency, such as www.pingplotter.com which allow you to specify multiple destination targets that you can monitor over time.

 

Best of luck,

Uncle B

[True 17]

I'm trying to make sure that my DAS is running fast enough.  When I look at the Network Delay in DAS for the OrderServer and QuoteServer1 they bounce between roughly 90 to 500 ms range or so.  I've tried the suggestions above (Shut down cloud sync type programs, have the computer hardwired, don't have anything else hooked up, etc) and it seems to improved it a bit so that it's generally in the 100-200 range in the first hour or two of trading, but every now and then it spikes into the 300-400+ range for maybe 30 seconds.  It'll then come right back down to the low 100's so honestly I have no idea if that's just normal or something I need to worry about.  The OrderServer is the one that seems to do more of the spiking and have a larger range of times. The QuoteServer1 stays much more consistent in the low to mid 100's range.  Basically I guess I'm just wondering if there's anything else I can do to make it faster, or if those times are just normal for DAS Pro.  I'm in San Diego, CA, have a Mac Pro (late 2013 style) w/ 64GB RAM and 1TB SSD running Bootcamp, a Netgear R6400 router, Motorola SURFboard SB6141 Modem, and my internet is through my cable company (Cox) with 150mbps download and 10mbps upload.  I'm happy to upgrade router/modem/internet package if you think that would help.  Thank you for your help/suggestions.   

Also tried the tests suggested above.  Here's what I got from the tests:

Pinging bearbulltraders.com [162.144.104.203] with 32 bytes of data:
Reply from 162.144.104.203: bytes=32 time=33ms TTL=252
Reply from 162.144.104.203: bytes=32 time=33ms TTL=252
Reply from 162.144.104.203: bytes=32 time=34ms TTL=252
Reply from 162.144.104.203: bytes=32 time=37ms TTL=252

Ping statistics for 162.144.104.203:
    Packets: Sent = 4, Received = 4, Lost = 0 (0% loss),
Approximate round trip times in milli-seconds:
    Minimum = 33ms, Maximum = 37ms, Average = 34ms

 

speedtest.net

PING ms 8 DOWNLOAD Mbps 180.73 UPLOAD Mbps 10.90

 

My Trade Ideas Pro scanner usually has a reading in the 7-9ms range

 

Edited October 8, 2018 by True

[Brendon 146]

True, 500ms is a little high for bounces, im in Sacramento and usually don't spike over 100ms too often (Xfinity). But then again I am not constantly checking my ping... DAS does freeze for a second or two from time to time, freaks Andrew out lol, and that could be what you're experiencing as well, we all get that (just DAS hangs) or that could be something different. Sorry not much help here. I don't know if bootcamp helps any either.

[fjmocke 4]

My latency at best is 300ms from South Africa.  Should I even bother trading?  I could always be one step behind