Internet Speed Is Essential To Day Trading

By December 7, 2018The Latest
Internet Speed Is Essential To Day Trading - Gigabit Internet

Day trading is a rather risky way of using the stock market to make money.  The safest way is to invest in index funds and bonds and let the markets do all the work for you, and if you know enough about business the best way is to research up-and-coming companies, find the ones with the best plans, and invest in them for the long term.  However, if you’re looking for the biggest risks and biggest rewards, then you should learn how to make money through day trading.

One reason day trading is so risky is that the value of a stock can change dramatically throughout a day even if it starts and ends near the same point.  You need to be able to predict which way the stock will swing in the next few minutes (or even seconds) and either buy or sell at just the right moment to make the best profit you can.  Buying when the price is going up and selling when it goes down will often get you nowhere, and that’s why it’s important to learn how to predict changes and react to them with as much precision as possible.

That’s where your internet speed comes into play.  Computers perform every stock transaction these days, and the transactions take place at fractions of a second because getting your order in before anyone else is as important today as it was back when stockbrokers shouted over each other on the floor of the stock exchange.  Fortunately, you won’t have to worry about your computer hardware because you’ll probably make your orders through a broker, and the broker will have the ultra-fast server rig it takes to keep up with the competition.

Still, your own internet speed needs to be in good shape if you want to deliver messages and orders to your broker fast enough to take advantage of the broker’s lightning-fast server.  Your message can lag thanks to a slow internet connection, and in day trading a second can be an eternity in terms of what can change.

That’s why it helps to invest in the fastest connection you can get, and for many people in San Antonio, Texas that’s a fiber-optic cable with a gigabit internet connection.  A gigabit internet line is 100 times faster than the average 10-megabit coaxial cable connection, and it doesn’t suffer from any slowdown during peak hours since the fiber-optic cable gives you a dedicated connection.  So if you want the best advantage for day trading, get yourself a fiber-optic connection with gigabit internet speeds.