Trading rule number 3: always have a backup plan
When we trade, we must give ourselves the best chance possible and the technical aspects are often overlooked. Of course, we will always be at the mercy of financial market quotes completely stopping, an internal problem for the broker ... but that leaves traders completely powerless. We must minimize the technical risks which we can control as much as possible, often with simple and inexpensive techniques.
Rule number 3 is therefore to check, each morning, if your trading system is operational and if back-up alternatives are at hand. These rules have been established as a result of several thousands euros worth of losses. I was night trading on N225m Futures, and I was heavily positioned. I lost my ADSL connection, I rebooted the internet box twice, I rebooted the computer, nothing, then I decided to call customer services, I had not stored the broker's number... by the time I had found my mobile phone, recharged it... long minutes had elapsed... Now, I can contact my broker or change my computer in less than 10 seconds if I have a problem.
What are the key technical risks for a trader?
The main risks for an active trader are computer hardware problems, technical software bugs, a power cut and / or losing internet connection. Statistically, over the next 10 years, you will experience all these problems when trading, do you have a solution for every eventuality?
How to minimize these risks when trading?
Computer failure can happen at any time, you always need an alternative which is rapid to implement. For example, I always have a spare laptop on hand which is put on standby on my broker's sign in page. If I have a problem on my main computer, I can be reconnected with my broker in under 5 seconds. Everything is predicted, coming out of standby takes two seconds, my login and password have already been entered in advance.
This solution is also extremely effective for a technical software bug. More and more brokers offer web interfaces for placing orders, you should also consider having several Web browsers installed on your computers. If you have problems with Firefox, you can switch to Chrome or Internet Explorer. If you surf the internet and trade at the same time, it is better to devote one browser exclusively to the trading interface. A bug on a site that you view with your browser will not impact (slowdown, freeze, etc.) on your trading interface.
The ideal solution for a power cut is a spare battery. For a handful of euros, you can have your computer, your screen and your internet box (otherwise there is no point) connected to the spare battery. The one that I have lasts for 15 minutes in the event of a power cut, the time it takes to place a stop (check that your broker stores your stop on its servers and not on yours (sic)), or close a position safely, etc.
For the loss ADSL / Cable connections, you should always have a mobile phone on hand (battery charged, I had a bad experience with an iphone only 1% charged in an emergency situation). All brokers now offer an interface for your smartphone, you can then follow your positions without panicking.
To strengthen security, if you are part of a couple, I urge you to have two subscriptions on two different networks: if your operator has a problem or if you are in an area with poor reception (there is still a lot of France where we run on GPRS or EDGE), use your partner's phone. Of course, you have to install your broker's interface on their smartphone so that you do not waste time.
At worst, learn your broker's phone number by heart so that you can call customer services. (and regularly check that the number has not changed.)
How to technically optimise your trading?
A small " bonus " technique for your trading:
I strongly urge you to do speed tests with different Web browsers, some are less responsive than others for placing orders, according to brokers.
In addition, you can optimise your ADSL connection by changing your browsers' DNS (domain name server), this is very effective, particularly for scalpers. Test the DNS and select the most responsive. It takes less than a minute to set your browser to a new DNS.
For example, in a city located in the Paris region with more than 25,000 inhabitants..
..it is better to use Google's DNS than that of any other internet access provider in the area. You can increase speeds by up to 40% and packet losses are halved. This can change everything for a scalper... Of course, you need to do this test each time you change location to find the most effective DNS and so have the fastest possible connection to place your orders.
Rule number 3 is therefore to check that your hardware is operational each morning and, in particular, make sure you have all your back-up alternatives on hand. It is also important for your peace of mind that you know how to react quickly and effectively in the event of a technical problem, you do not panic...