Recommended Internet Speed For Trading

Recommended Internet Speed For Trading


Hey, guys, it’s IT Nate here. Welcome back to another tech vlog. Today we’re gonna talk
about internet speed. Alright, so lately I’ve
had a lot of people ask me about internet speed. Namely, what do you
need to actually trade? So there’s a couple things
that go into internet speed. So I’m gonna kinda explain what
an actual internet speed is and what you’re looking for, and then I’m gonna hop
onto my desktop here. I will do a screen share, and I’ll actually kind of show you test, and we can get you figured out. So first off, internet speeds. What does everybody see? All the internet
companies, they advertise, what, 10 megabits per
second, 15, 20, 50, 100, 1 gigabit per second. So what does that actually mean? Basically, that’s just your raw speed. Like that’s what the maximum that you’re actually gonna get is. But another huge factor
that goes into that is actually latency as well. So latency is how long does it take you to get from your home computer
to the internet, basically. So an analogy that’ll kinda work is basically, I’d say
we have a road, right? You can drive down the road. There’s no problems. So what’s your speed limit? You’re speed limit’s gonna be
say, 60 miles an hour, right? Well, if you’re going to a neighbors house at 60 miles an hour,
it’s gonna take you what? Like a half a second. You can’t even get up to 60 miles an hour. But say you’re driving
from California to New York at 60 miles an hour, it’s gonna
take you a long time, right? So that’s basically how it works. So if you got that super long distance, and you increase your
speed to 120 miles an hour, you’re gonna get there a lot faster, but it’s still a really long distance. It’s not gonna take you
a long time to get there. Whereas, from my house
to my neighbor’s house, whether I go 25 miles an
hour or 500 miles an hour? It’s really not gonna
make a big difference in the grand scheme of things of how long it takes me to get there. So really, when you’re looking
at internet connections, you need to look at both. You need to look at internet speed, and you need to look at what
you’re latency’s gonna be. So one of the biggest
problems with mobile trading, either on a cell network or
via satellite connection, or something like that, is you’re gonna have a much higher latency than if you’re gonna be
hardwired into DSL, or cable, or fiber network, whatever it may be. So let’s take a look and see what kind of actual bandwidth you need. I have Thinkorswim opened right here. So hop over here. I have Thinkorswim opened
on my computer here. You can see I have a bunch of charts. The market’s actually closed today. So this was really poor timing. So I have a currency pair
pulled up now, the Euro USD. So maybe not quite as much
volume as what you typically see, but it’s gonna be enough
for what we do today. So you can see we have four
different charts opened, a whole bunch of SMAs,
and some Bollinger bands. We got some Level 2s going over here. We got some trader stuff
going on over here. So we got lots of information. So basically, what is this
all taking to load, right? So I have this program here, and it’s basically telling
me, and these graphs, how much data is being
pulled at any given time. So you can see this whole chart is at 30 kilobits per second. So as we’re running here, it
doesn’t give me exact number, but I don’t know, say what? This is 5 to 10 kilobytes per second. And we’re talking internet speeds are in the 10, to 20, to 50,
to 100 megabits per second. So I guess I should probably explain what the difference
between bits and bytes are. A bit is one item, and that’s like the smallest integer you could get. And a byte is eight bits. So right now, what we’re
talking about here is in bytes. So eight bits. And your internet speed
is given to you in bits. So you kinda gotta do
a little bit of math. So basically, you had
to multiply this 30 by 8 to get what you’re actually gonna do. So 30 times 8, that’s
240 kilobits per second. Well, you could probably do that over, I guess, you couldn’t quite
do it over a dial connection. That’d be a little too slow. But basically, the slowest DSL connection you could possibly get, would still be able to
handle the amount of data that we have here without a problem. So, yeah, ’cause we’re talking kilobits, and there’s 1,000 kilobits in a megabyte. So, I don’t know. You guys are probably
getting all confused. But basically, any internet
connection you’re gonna have is gonna be more than fast enough to get this small amount of data. So I’m gonna go ahead and
change charts here once, and then we’re gonna
see what it looks like to actually load a new chart. So let’s just pull up
the Tesla chart here, but we’re not trading. But you can see here
it’s actually going out and pulling that data,
loading the Tesla chart, or it’s supposed to be
loading the Tesla chart. Well, that was a total fail, huh? Let’s try a different one. There you go. It loaded GM for us. So here you go. Here’s the actual data that it pulled in. It looks like it got up to maybe about two megabytes. So for internet speeds
that would be times eight. You’d be about 16 megabits per second. You would need to get
that, and get it like (snaps fingers)
now. And get it in one second. If you had an eight megabit per second, it could actually only take
you two seconds to get it. So that’s kinda how that works. So really, most internet connection speeds are gonna be adequate. I usually tell people
in the 10 to 15 range in terms of speeds, there’s
gonna be more than enough. But the other thing you
have to look at is latency, and how do you test latency, right? So we’re gonna go to speedtest.net here. We’re just gonna run a speed test. I’m just gonna click Go here. And this is gonna tell me
what my internet speed is, and also what my ping
is, our ping, or latency. So you can see here, my
ping is 29 milliseconds. So that’s actually pretty good. If you’re under 100 milliseconds, you’re probably gonna be doing fine. If you’re on a satellite
connection or something like that, you’re gonna be well
over 100 milliseconds. So that’s gonna greatly slow things down. And basically, what happens is when you go out and request that webpage, it’s gonna take a long
time for the request to get to the server and
then get back to you. But then once it gets
back to your computer, it’s gonna load like that
(snaps fingers) because it’s a pretty fast connection. It just takes a long time
to go back and forth, or has a long distance to go. So I also did an internet
speed test on my phone earlier. And you can’t see this, and
it’s not actually, okay. And my ping that I got was 42. So not near as good as my
home internet connection. It’s about, what, 33% slower, in terms of my latency, or my ping. But still adequate. You could still totally trade with that. The only issue you’d have
with a phone or something is you might lose connection, and you’re reliable to
have a problem there. So what does this all mean, right? Do I care how fast it is? Do I care what my latency is? All that good stuff. Well, basically, the more
frequently you’re trading, or the shorter timeframe
that you’re trading, the more important all this stuff is. So if you’re just getting in
and out in a couple seconds, just scalping something, you’re gonna be really concerned, ’cause even a half a second, even, yeah, 29 milliseconds lost
is kind of a big deal. So if your ping here, or your ping’s at like 50 milliseconds, and you’re losing a half a second between what’s actually
happening and what you’re seeing, that can be a big difference between whether or not you get a fill, or get out of trade, or do whatever. So that’s a big deal. You need to make sure
you’re on a very reliable, very fast connection. And by fast, I mean,
low latency connection for scalping, or day trading. Anywhere out to, if you’re
investing long term, 30 year, you could do that on a dial up connection. ‘Cause, really, your entry points aren’t gonna be near as important. I mean they’re still important, but down to the fraction of a second’s not gonna really matter near as much as if you’re day trading,
or scalping, whatever. So I hope this video helped. I kind of spewed a lot of information, or technical jargon, or whatever. So I hope it was helpful. If you have any questions or
need any more explanations, please let me know down in the
comment section down below. I’d be happy to answer them, and try and clarify
anything that I can, thanks.

Danny Hutson

12 thoughts on “Recommended Internet Speed For Trading

  1. Thanks for the video. I’m paying an insane amount for internet speeds. Getting 300 mbps. Looks like I can save some money and still have a fast connection.

  2. Great video. I tested my speed and latency and my speed is 120mbps and latency is 11ms…however lately since i upgraded my pc to a much much more powerful one at times on youtube the videos will freeze for a few seconds if i go to another window. I will still hear the sound but the video will be frozen. Its odd because the pc i have now is an amd threadripper

  3. I am concerned about latency. I will have to use Satellite internet while in Colorado. I use a two minute chart when trading. Do you think it will be too slow?

  4. A good video: 76.99 Mbs (download) and 19.48 Mbs (up load), my ping is 28ms plus I am only about 80 miles from the UK stock exchanges, so that's good for a day trading scalper. 🙂

  5. As expected the bandwidth doesn't really matter its just all about the latency. If you truly want the best connection you are going to have to do what all the quant firms do and live in NY or NJ near the actual servers.

    Also when testing the ping you should have tested to a server location near the actual stock exchange datacenters. Testing ping to a server close to you isn't really relevant, since someone in California could have a 1ms ping to a server in California, but 300+ ms ping to the actual trading servers on the other side of the country.

  6. Good to know, I plan on traveling in an RV in a couple years and will have to depend on cell towers or if Elon Musk gets this new satellite internet system up, I might be able to leverage that. Will miss the house based internet at 100 MB download. 🙁

  7. clay bro please tell us when people go different countries is there any a broker authentication login problem

  8. Wait! Who is this imposter? Who are you and what have you done with Clay? BTW, my internet speed depends on the direction of winds, too much sun, too little sun, too many trees…etc…I live in booney ville! So basically you're saying I'm screwed and will lose a lot of money when I do eventually start to trade because my internet WILL cut out!

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