do faster computers make a difference with slippage? | Forex Factory

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do faster computers make a difference with slippage?

  • #1
  • First Post: Aug 11, 2016 6:10pm Aug 11, 2016 6:10pm
hi guys,

I recently read a pdf file from a company that builds trading computers, and he claimed that having a faster processor and components etc would stop slippage. now I am sure having a fast reliable computer is an essential tool for particularly a news traders, my understanding is slippage isn't caused by a slow computer but because of brokers not being able to fill your order in time. quote me if I'm wrong but would having a i7 processor really make a difference of over an i5 processor? any input would be awesome

cheers!
  • #2
  • Aug 11, 2016 6:56pm Aug 11, 2016 6:56pm
Quoting fxpiprunner
hi guys, I recently read a pdf file from a company that builds trading computers, and he claimed that having a faster processor and components etc would stop slippage. now I am sure having a fast reliable computer is an essential tool for particularly a news traders, my understanding is slippage isn't caused by a slow computer but because of brokers not being able to fill your order in time. quote me if I'm wrong but would having a i7 processor really make a difference of over an i5 processor? any input would be awesome cheers!
I'm new to trading but I can give your question a go. Going from an i5 to an i7 I wouldn't think mattered. If you had an extremely bad PC that couldnt properly handle trading software then I think you would have problems. I'd think an unreliable internet connection would be worse for getting trades placed at the amount you want. I'm new too trading though so what do I know maybe the i5 to i7 is like night and day for slippage. Just thought I'd say my two cents in saying I'm guessing its just a marketing ploy too say their PC's are the best of the best and will help you trade better.
  • #3
  • Aug 11, 2016 7:41pm Aug 11, 2016 7:41pm
Slippage has nothing to do with your pc.
Slippage is caused by the price changing in the time your order is being executed, either because of latency (meaning the price changed in the time you clicked the sell or buy button and by when the order gets filled) or by a lac of traders to fill the order. and of course there is always a chance of broker manipulation with Forex brokers.

There are 2 ways to prevent or control slippage, the first way which eliminates slippage is limit orders.
Another way to control slippage is market range orders, with these kind of orders you will have to enter the maximum slippage you allow on a trade, if there is to much then the order will not be executed.
  • #4
  • Aug 11, 2016 7:48pm Aug 11, 2016 7:48pm
Quoting Subliminal
{quote} I'm new to trading but I can give your question a go. Going from an i5 to an i7 I wouldn't think mattered. If you had an extremely bad PC that couldnt properly handle trading software then I think you would have problems. I'd think an unreliable internet connection would be worse for getting trades placed at the amount you want. I'm new too trading though so what do I know maybe the i5 to i7 is like night and day for slippage. Just thought I'd say my two cents in saying I'm guessing its just a marketing ploy too say their PC's are the best...
thanks for your input subliminal, totally agree with you. if you were using a 20 year old computer compared to an i7 now there could be a big difference but not so much between an i5 and i7
  • #5
  • Aug 11, 2016 7:52pm Aug 11, 2016 7:52pm
Quoting Dkam
Slippage has nothing to do with your pc. Slippage is caused by the price changing in the time your order is being executed, either because of latency (meaning the price changed in the time you clicked the sell or buy button and by when the order gets filled) or by a lac of traders to fill the order. and of course there is always a chance of broker manipulation with Forex brokers. There are 2 ways to prevent or control slippage, the first way which eliminates slippage is limit orders. Another way to control slippage is market range orders, with these...
dkam thanks for your input and advice regarding slippage..i think the guy that was selling computers based on saying a poor performance computer is the reason for slippage was using the phrase purely as a marketing campaign. I have an ea that I use that you can enter the max slippage allowed when the trade is executed which helps a lot. cheers!
  • #6
  • Aug 11, 2016 8:50pm Aug 11, 2016 8:50pm
If you use a EA you can rent a server as close as possible to the execution server of your broker, by this you will have lower execution time and so less slippage.
Another advantage is that your EA still runs if you get a power or internet outage at your pc.

Of course the slippage advantage will only help if the EA is high frequency since the difference between the server and your pc will only be milliseconds.
  • #7
  • Aug 11, 2016 9:11pm Aug 11, 2016 9:11pm
Quoting Dkam
If you use a EA you can rent a server as close as possible to the execution server of your broker, by this you will have lower execution time and so less slippage. Another advantage is that your EA still runs if you get a power or internet outage at your pc. Of course the slippage advantage will only help if the EA is high frequency since the difference between the server and your pc will only be milliseconds.
thanks for your input again! is that something similar to a VPS? I looked on fxpro and they have a vps log in that can execute orders in 1-5ms opposed to 300-400ms of a server, by having a server at their execution point like you mentioned.
  • #8
  • Aug 11, 2016 9:19pm Aug 11, 2016 9:19pm
Quoting fxpiprunner
{quote} thanks for your input again! is that something similar to a VPS? I looked on fxpro and they have a vps log in that can execute orders in 1-5ms opposed to 300-400ms of a server, by having a server at their execution point like you mentioned.
A VPS is a server, a private server. That is what i ment with renting a server.
  • #9
  • Aug 12, 2016 12:50am Aug 12, 2016 12:50am
Looks like my assumption was right that your PC wouldn't affect slippage/trading (unless it was an incredibly bad PC unable to run the software). Thank you Dkam for some explanation on all of this. I'm fairly new too forex and thanks too you ive learned a couple more causes of slippage other than broker delay.
  • #10
  • Aug 12, 2016 12:51am Aug 12, 2016 12:51am
Quoting Dkam
If you use a EA you can rent a server as close as possible to the execution server of your broker, by this you will have lower execution time and so less slippage. Another advantage is that your EA still runs if you get a power or internet outage at your pc. Of course the slippage advantage will only help if the EA is high frequency since the difference between the server and your pc will only be milliseconds.
Can you explain to me what an EA is Dkam i'm new too forex and would like to learn as much as possible, Thank You!
  • #11
  • Aug 12, 2016 6:48am Aug 12, 2016 6:48am
An EA is a expert advisor, this can be a trading system which gives you entry signals to enter manually or a fully automated system.
When you have a fully automated system you can rent a server, let the system run on the server and do it wil do everything for you.
  • #12
  • Aug 12, 2016 6:55am Aug 12, 2016 6:55am
Quoting Dkam
An EA is a expert advisor, this can be a trading system which gives you entry signals to enter manually or a fully automated system. When you have a fully automated system you can rent a server, let the system run on the server and do it wil do everything for you.
Based on the developer's trading analysis, the robot works on scanning some trading signals and execute an order.
  • #13
  • Aug 12, 2016 8:26am Aug 12, 2016 8:26am
Quoting Dkam
An EA is a expert advisor, this can be a trading system which gives you entry signals to enter manually or a fully automated system. When you have a fully automated system you can rent a server, let the system run on the server and do it wil do everything for you.
Thank you Dkam! Do you personally use EA's? What are some advantages of using or not using EA's?
  • #14
  • Aug 12, 2016 8:29am Aug 12, 2016 8:29am
Quoting gabanda
{quote} Based on the developer's trading analysis, the robot works on scanning some trading signals and execute an order.
How is that different from what i said above?
  • #15
  • Aug 12, 2016 10:15am Aug 12, 2016 10:15am
In addition to all things Dkam said, it might matter for automated systems, it doesn't for retailers trading manually on their high-latency brokers over a cheap telephone line on windows PCs with hundreds of background tasks.

Explanation: If you have a system that reads prices via FIX (or so) acting to these information by opening or closing trades than yes, theoretically at least, your computing time matters. It'll cut down your own computers response time and might as a consequence give you better execution prices - it's not really slippage though ...
If you trade at home, manually, connected to the internet via a cheap telephone line to a broker at the other end of your country or worse, on a different continent, you've far bigger latency issues to cut first. On top of that, MT4 or 5 isn't made for low latency and your own response time, including your monitors reaction time, is probably already bigger than any gain by buying faster computers.

If you trade manually, you can't compete with HFT and you shouldn't even try.
  • #16
  • Aug 14, 2016 4:04am Aug 14, 2016 4:04am
Yeah Faster computers may change the phase of trading, it would be more beneficial to use faster computers in order to achieve all the opportunities which came across us.
  • #17
  • Aug 14, 2016 4:30am Aug 14, 2016 4:30am
Quoting GodfatherSam
Yeah Faster computers may change the phase of trading, it would be more beneficial to use faster computers in order to achieve all the opportunities which came across us.
I would say the only way you could miss out on a trade based on your computer would be if you had a PC unable to handle trading software. The difference from an i5 processor to an i7 or any AMD chipset would in my opinion be absolutely none. Most people shouldn't have an issue with their PC's affecting trading, unless their software is laggy and unreliable. I am new too trading though so I am always prepared to swallow my words.
  • #18
  • Aug 14, 2016 4:35am Aug 14, 2016 4:35am
Quoting fxpiprunner
hi guys, I recently read a pdf file from a company that builds trading computers, and he claimed that having a faster processor and components etc would stop slippage. now I am sure having a fast reliable computer is an essential tool for particularly a news traders, my understanding is slippage isn't caused by a slow computer but because of brokers not being able to fill your order in time. quote me if I'm wrong but would having a i7 processor really make a difference of over an i5 processor? any input would be awesome cheers!
I think it is a ploy to sell you more....
  • #19
  • Aug 14, 2016 4:53am Aug 14, 2016 4:53am
Quoting mytrader1961
{quote} I think it is a ploy to sell you more....
This is exactly what I said. I have a custom built PC rig and most if not all the custom trading PC's are just running mid to high end hardware like any 12 year old's gaming rig. The builds are similar to the ones you will see on gaming PC's it's definitely just a marketing ploy. I cant think of a way too make a PC specifically tailored to trading which is why these companies confuse me.
  • #20
  • Sep 2, 2016 7:55am Sep 2, 2016 7:55am
I think nothing can stop slippage during the news release time, no super fast computers neither EAs nor any user friendly platforms in my opinion and its better we could trade on "As it is" basis.. I most of the times avoid trading during the NFP or high impact news release time due to the said reason.
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