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Good question, good answers. Here are my thoughts. Some of them have already been mentioned, and some may be more than you want to get into, like having a backup internet provider or a generator. Use what works for you.
First, look at your situation and determine where you have a "single point of failure" -- something where if just one thing fails, like the outside power, you are screwed. Then find a way to have a redundant way to provide that, so if one of the ways you can get it (power or whatever) fails, you are not screwed.
Some ideas:
1. Always have a stop loss order in the market so you will have protection independent of your local PC. Most (perhaps all) trading platforms do not keep stops and targets locally for this reason (I know Ninja and Sierra don't). Look into this and be sure in your case. Note that in case of utter disaster, such as the market taking a multi-hundred/thousand point dive, your stops won't help you because they won't get filled. But in normal times, a stop will protect you. If you're not sure where the stop is held, check with your platform provider and/or your broker.
2. Have a landline you can use to call your broker's trade desk. Not just your cell phone. An old-fashioned, wired-in land line. These get power from the phone line itself and will be up if your line power is not (I have had this experience after a hurricane shut down our power.) Also, if the cell towers are out, you will have a problem with your cell phone. Have at least two ways to call out. More is better.
3. Have UPS protection (battery backup) on all components of your local setup, including your cable modem or whatever device connects you to the internet. I have had power go out locally here but the cable company was still providing access. Act quickly in that case, because their power may not last either.
4. To really be sure, have some totally independent way of getting out, such as a satellite internet connection and phone. This does not depend on local power for the components of the network outside your own location (which your cable company does.) Protect your local equipment with UPS. If trouble hits, act fast because the UPS battery will not last forever.
5. In case you need serious protection (and, perhaps, are a little paranoid) and have the physical setup for it (it won't work in an apartment), and the funds, you can have a backup generator. This seems extreme, unless you have gone through a hurricane (as I have in Florida), and noticed with envy those who had one. If the power goes out in a wide area due to a major disaster, don't expect to go down to the hardware store and buy one after it's happened. They will sell out very fast. Also, with no power for the gas station pumps, you won't get gas anyway. If you plan to use this option, get prepared ahead of time.
Companies always have disaster recovery plans based on single point of failure thinking. You can do the same, although your resources may limit you to a degree. But plan as well as you can, for what you can do or want to do. A simple UPS backup, plus always having stops in the market, may take care of much or all of it. You decide what is enough for you.
Some of these ideas may go a little far. It is not necessary to be too paranoid, but you should be paranoid enough for your own risk tolerance.
Bob.
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Update: You could also do something as simple as have a web-based trading platform that you can access via your phone. Some brokers offer a number of different ways to get to your account, and you could use this if it is available, too. It does depend on the cell towers still being up, but it's one more way to get some redundancy.
My current broker, Tastyworks immediately routes these working-orders to the CME as soon as you place them, where they await execution, and I would hope most other platforms/brokers do the same!
(This was their official response, I would check with your personal broker)
"Thank you for your inquiry. If the order has been entered, and in working status, it will remain live even if your power goes out. The actual order is routed directly to the CME, and gets executed there."
OP: I have this incredibly frightening and recurring scenario that plays out in my mind. What do I do?
@matthew28 : thought you were scared before? Thats nothing, hold my beer and imagine this. Kids college fund, all in with a long on the ES, caught in a power failure, major market crash due to a terrorism attack and several weeks of trading suspension whilst you try to explain to your wife what you have done.
Could happen. But it also could be another boring day where nothing happens except for a minor local power failure and the market reverts to the mean anyway.
A lot of other scenarios could also play out. End of the day the answer is an easy one. Trade a higher timeframe where a few hours of outage will make no difference to you, and make sure that the risk is acceptable.
It reminds me that I don't really know what that "routed directly to the CME" pipeline actually looks like in reality, like how the market-makers see that order-flow, etc. I kind of have a rough picture but, its tangential to the current conversation so I will leave it be for now.
those of you who traded during 9/11 how fast did trading come to a halt? What ever that number is I'd cut it in half and that's to time you get to get out of a trade if something big like that happens again.
thats why everyone needs some news source on there desk. at least twitter
-P
"Truth is not what you want it to be; it is what it is, and you must bend to its power or live a lie"-Miyamoto Musashi
If the power goes out in a wide area due to a major disaster, don't expect to go down to the hardware store and buy one after it's happened. They will sell out very fast. Also, with no power for the gas station pumps, you won't get gas anyway. If you plan to use this option, get prepared ahead of time.
