Steps to Build a Hands Off Automated Trading Machine - Feedback Please

[up23 10]

I run my own fully automated trading system. It's been running since early 2008. I have a 1U rack mount server with dual processor 3 GHZ (dual core), 4 GB ram and two small 200GB hard drives (with external drive for backup), running 64bit Windows Server 2008. I run my system in a small co-location facility in Maryland and I pay $150 per month for my co-location service.

 

I also pay $75 per month for IQFeed real time data and $20 bucks per month for a End of Day Stock Quote Data and Historical Stock Prices subscription for eod data.

 

I use Interactive Brokers and developed my entire system in Java against IB's TWS API.

 

My system trades only US Equities and does around 13 round turns per day. I blow through around $35K in commissions per year.

 

With all of that said, the last thing to worry about is your PC strength, hard drive size and video card.... Your #1 priority should be developing a positive expectancy, consistently profitable trading system. This step (and nothing else) should be your sole focus for AS MANY YEARS as it takes.... Trust me, this step alone, many never achieve....

 

 

Jason

Thanks for the info! I am looking for a place to host a server that's close to IB's servers. Did you pick Maryland because of that? I think IB's servers are in Connecticut. Can you recommand a colo or dedicated server company?

[sappjason 10]

I picked Maryland, because I live in Maryland. I actually live about 10 miles from my co-location facility. I don't have any need for sub-second execution. My main need was to have a server that is up and running every day without interruption, versus running it from my basement.

 

If you have the same type of needs, I would recommend just choosing a local co-location facility and go with that.

 

Jason

[eqsys 10]

I backtest, run automated strategies with TradeStation.

 

I thoroughly investigated, tested various hosting companies to put TradeStation on their servers. Their virtual servers are slow, so you would have to get the dedicated servers - costs about $150-250 per month to equal the speed you'd get using any computer with the Intel i5 chip running - so this is costly. However, it saves you from most power and internet outages - nothing is 100% reliable. But, if you live in an area with occasional severe weather I'd go with a dedicated server.

 

If you run the software at home, it's more reliable to use a laptop with battery backup. Remember, when your power goes out so does your internet router. You could get your internet data feed using a 3g or 4g card.

 

Even if your power stays on and your computer and internet connection are OK there can still be occasional problems with the exchanges, so no automated system is 100%. You always have to monitor your positions to make sure that what you have is what you think you have.

[Tams 20]

"You know you have achieved perfection in design,

not when you have nothing more to add,

but when you have nothing more to take away."

-Antoine de St. Exupery