Setting up a trading platform: The right computer hardware

In order to trade the retail Forex market it is crucial to have a properly configured computer system. The right hardware and software balance is crucial to trade the Forex market profitably. If you are reading this page it is safe to assume that you have a computer equipped with an Internet browser and a connection to the Internet. This is of course the minimum requirement to trade on-line. In the post we will go beyond the basics and look at the components required to set-up a dedicated trading platform.

The most important thing when setting up a trading platform is to define your requirements. Each individual has differing needs so no one size fits all system will suit the needs of everybody. I will provide details about how I have gone about this process, but it should be remembered that your needs may vary.

Trading Platforms
A trading platform is a software interface that allows you to communicate with your broker or market maker. This interface allows you to buy and sell currency modify orders and communicate with your broker. These interfaces can be broken down into two categories, standalone software programs or browser based java programs.

Standalone software programs are separate programs written for a particular Operating System. Nearly all of these require a Windows 2000 operating system or better. These programs are much more stable and provide increased processing speeds.

Browser based programs usually employ Java to make there platform accessible across multiple Operating Systems. These browser-based systems provide improved flexibility, as they do not require a particular Operating System they just require a Java Virtual Machine or a standards compliant browser. I will also include java based platforms in the browser-based category even though they may appear to be a standalone program they do in fact run on a virtual machine and do not have direct access to your computers hardware. These platforms tend to be slower and can become completely inoperable without an Internet connection.

I have a preference for standalone trading platforms, as they are faster more stable and have the ability to work offline. A windows operating system is a necessity for online currency trading.

Requirements
This is a crucial stage it is often very helpful to make a list of things that you require from a trading computer system. I will include my list of things that I require of my computer system:

Secure
Operating System cannot be easily accessed by a third party, as it would hold all my research on my proprietary trading systems. 

Stable
The computer needs to be able to go for 5.5 continuous days without needing to be reset and without crashing.

Dual Monitor Display
The computer needs to be capable of outputting video to two monitors. It is very important when trading that you have all the information required easily accessible.

Large data storage capacity
Multiple back tests using one minute data quickly uses hard drive capacity therefore a large fault tolerant hard drive is required.

Ability to send and receive faxes
This encompasses hardware and software required to send and receive faxes directly from the computer, as opposed to using another third party device.

Broadband Internet Connection  
A fast network connection is imperative in getting your order processed in a timely manner.

Backup and Recovery
I require that important trading documents, my trading journal and other key documents be backed up, in the event of a hard drive failure.

Powerful Financial Analysis Software
I require software to carry out complex financial and mathematical modelling and be able to write further software extending functionality of such a program.

No Excess Bloat
Loosely translated this means that I do not need a top state of the art system with features I will never use. This system will be designed purely for currency trading and online trading.

Redundancy
Failure recovery is crucial when trading during volatile market times.

I am in a position where I have more than one computer (three to be exact); therefore I will be converting one computer to my primary trading system. This will allow me to use this computer solely for Forex Trading and research.

I am currently running Windows XP Professional, however with Vista being released I think the wise thing is to upgrade as I will be using Office 2007 extensively. Vista also has better security and increased functionality.
Now I will go through my requirements that I have listed above and determine if I need to upgrade any components.

CPU
The CPU or central processing unit is the heart of the computer system. Put simply it handles the processing of instructions. The CPU in my computer system is an Intel Pentium 4 running at 1.8GHz. This is more then adequate for trading needs and upgrading to Vista.

Memory
The memory or more specifically the Random Access Memory or RAM is memory that allows data to be accessed in any order and holds running program data. The RAM in my computer system is 1.5GB. This is definitely on the low side for running Vista and I will consider an upgrade.

Video Card
The video card sometimes referred to as the graphics card, outputs data to a monitor to be displayed. The graphics card in my system is a 128MB Radeon 9550. It has dual monitor output. This at the bare minimum level for Vista and I will definitely upgrade this component.

Hard Drive
The hard drive is the primary storage device on the computer. In my computer system I have an 80GB primary hard drive and a 40GB back up drive for increased redundancy.  At this stage 80GB is sufficient for my needs but this component can be upgraded easily.

Fax Modem
A fax modem or modem allows for the transmission of data from a computer via the phone lines. The fax modem in my computer system is an internal 56k modem. This allows me to send and receive faxes and provides a redundancy channel if my broadband connection fails.

Ethernet Card
The Ethernet card allows for a standardized way to connect two devices together. In my computer system I have two 10/100 cards. This is sufficient for connecting to my ADSL2+ modem and a spare for connecting to a second computer.

DVD/CD Burner
A DVD/ CD drive provides read/write access to external media such as CD and DVD’s.  I have a standard DVD drive and CD burner, which is sufficient for my trading system needs.

 In conclusion it is most important when building or buying a computer system for trading you need to clearly define your requirements. This is such a personal and individual process that it is hard to give generalised advice, if you do however choose to run Vista and are splashing out on a new system I would recommend:

CPU: Dual Core 1.8GHz or more this can be AMD or Intel dependent on your preference.
Memory: 2GB of RAM.
Video Card: PCIe 256MB or more, brand can come down to personal preference. Make sure its DirectX 10 compatible. Most cards come standard with 2 monitor outputs check to ensure this.
Hard Drive: Two SATA 160 GB Hard drives with 7200 RPM or higher and 16MB Cache.
DVD/CD Burner any kind.

About the author

Mark - Is a 28 year old form Australia. He has a Bachelor in Economics and a Major in CS. He is currently working towards his CFP. His interests include algorithmic trading systems, artificial intelligence, game theory and poker.