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Are horse powers important if you normally use a car (not racing)? YES - but it depends on how many you have . a 20 horse pwoer car iis terribly (I was once running my sports car 600km with around 35 horse powers in emergency mode of the engine, painfull on the highway, at least in germany).
Latency is important, but only if it gets in the way of your trading strategy. Trade from europe on US and you ahve 120ms. That is signal to you, order back = 240ms. Automatic trading makes that a real 240ms delay for stops and even when trading slower that CAN be nasty at times (getting out when the market gets crazy, for example). For limit orders that is a 240ms delay to get at the end of the execution queue at the exchange.
If latecy is ok for you, then it is ok. Depends a lot on what you have.
All that hard wired etc. stuff makes no difference , btw. - latency within a building when the network is not overloaded (as in: Use cables, use a switch) makes that a 1ms delay anyway maximum. ALL the latency you have does not come from your local setup buy simply from modem + cable + the stuff behind.
You never said what your latency is to begin with, btw.
My general feeling is that if you have to ask if latency is important, then no - latency is not important to you.
For 99% of discretionary/manual traders, latency is not going to make much of a difference.
Generally those who need reduced latency already know it, and are paying dearly for the privilege.
That said, I do advocate the use of a VPS solution for a lot of people, even discretionary traders. It has the added benefit of reduced latency, but the primary benefit in my opinion is the self-contained, highly reliable, always-on and 100% stable solution to act as a container for all of your trading needs. You would then just remote desktop to the Chicago box, and do your trading. Connect to it from your iPad, or Transformer Prime. etc etc.
I think that latency is a very important and whether you are conscious of that is just a matter of time.
I will put it this way: The window of opportunity for a trade to be profitable is small, and latency reduces slippage and puts you ahead in the queue for a limit order. If you are the 51 order and there are only 50 orders outstanding, then those who had the privilege to be ahead will be filled. first in, first out
Most define a profitable trade in terms of $$ but I define it further like this:
a profitable trade in an anomoly in price in relations to your methodology (price action, volume analysis, etc) and the subsequent correction of price to your expectations.
The window of opportunity (on price corrections) will become smaller and smaller in the future because of algos. Those who have the fattest latency will take advantage ahead of anyone else.
In an IDEAL world you should have one millisecond per 100 miles and although many cant achieve that you can use that as a point of reference.
Trading futures and options involves substantial risk of loss and is not suitable for all investors. Past performance is not necessarily indicative of future results. You may lose more than your initial investment. All posts are opinions and do not claim to be facts. Please conduct your own due diligence. Use only Risk capital when trading Futures.
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