Always have a backup solution, trading rule number 3

27 9 2014 - No comment

When we trade, we must stack the deck in our favour and the technical aspects are often overlooked. Of course, we will always be at the mercy of the stop of Euronext quotes that we knew on the CAC 40 a few years ago, an internal problem to the broker … leaving us completely powerless, but we must minimize as much as possible the technical risks which we can control, often with simple and inexpensive techniques.

Rule number 3 therefore consists of checking every morning if your trading system is operational and if backup solutions are handy. These rules were established following the loss of several thousands of euros … Night trading on N225m Futures, I was strongly positioned. My adsl connection failed me. I relaunched the internet box twice, rebooted the computer, nothing. Then I decided to call customer service. I did not know the broker’s number off by heart … time to find the mobile phone, recharge it … long minutes had passed … Now, I can contact my broker, change the computer in less than 10 seconds if there is a problem.

What are the main technical risks for a trader?

The main risks for an active trader are hardware problems on his computer, a technical bug in a software, power failure and/or loss of connection. In the next 10 years, statistically you will encounter all of these problems as you trade. Do you have a tailored solution for each problem?

How to minimize these risks when trading?

Your computer can break down at any time; you always need a quick backup solution. For example, I always have a laptop handy which is on standby mode on my broker’s login page. If my main computer has a problem, I can reconnect with my broker in less than 5 seconds. Everything is planned, coming out of standby mode takes two seconds, and the login and password are already entered in advance.

For the technical bug in the software, this solution is also extremely efficient. Increasing numbers of brokers are offering web interfaces to place orders, and you must also think of having several web browsers installed on your computers. In case of problems with Firefox, you can switch to Chrome or Internet Explorer. If you are surfing and trading at the same time, it is best to set aside a browser specifically for the trading interface. A bug on a site you are consulting with your browser will have no effect (slowing down, freezing …) on your trading interface.

For power failure, the ideal solution is a battery. For a few dozen euros, you can have your computer, your screen AND your internet box (otherwise it is useless) connected to the backup battery. The one I have lasts for 15 minutes in the event of power failure, which gives you the time to place your forgotten stop (make sure your broker stores your stop on his servers and not on yours (sic)), or to close a position for security reasons etc.

For loss of adsl/cable connection, you must always have a mobile phone handy (fully charged battery, I had a bad experience with an iphone at1% charge in an emergency …). All brokers now offer an interface for your smartphone, so you can then track your positions without panicking.

To enhance security, I urge you to have two subscriptions to two different networks if you live as a couple: if your operator has a problem, or if you are in an area where you do not pick up signals (there are still many areas in France where there is no gprs or Edge signal…), take your companion’s phone. Of course, you must install it on the smartphone interface of your broker not to lose time.

In the worst case scenario, memorise the broker’s phone number to contact customer service … (and check regularly if the number has changed.)

How to technically optimize your trading?

A small technical ‘bonus’ for your trading:

I urge you to conduct speed tests on the different web browsers; some are less responsive than others for placing of orders with brokers.

In addition, you can optimize your adsl connection by changing the DNS in your browsers; it is very effective, especially for scalpers. Conduct a DNS test and choose the most responsive DNS. It takes less than a minute to configure your browser on a new DNS.

A telling example for a town of more than 25,000 inhabitants in the Paris region:

It is better to go through Google’s DNS than the DNS of all the access service providers of the area.  You can earn up to + 40% of speed and packet losses are divided by 2. This can make all the difference to a scalper … Of course, this test is to be conducted every time you move to find the most effective DNS and have the fastest possible connection to place your orders.

Rule number 3 is therefore to check every morning if your equipment is operational and especially if you have all your backup solutions handy. It is also important for your psychological comfort; you know how to react quickly and efficiently. In case there is a technical problem, you will not panic…

List of my 10 personal trading rules:

1) Do not lose money, trading rule number 1

2) Trading rule number 2, reread rule number 1

3) Always have a backup solution, trading rule number 3

4) Only trade when in top form, trading rule number 4

5) Think for yourself, trading rule number 5

6) Control your losses, trading rule number 6

7) Do not force yourself to trade, trading rule number 7

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