How Much Does Speed Matter in Trading?
By Dave Mabe
In this week's episode of Line Your Own Pockets, we take on a topic submitted by Isaac, a trader I work with.
How much does timing matter? Signal to execution time, tick data versus 1 minute bar data for backtest/signals, etc.
This is a great question because technically minded people often tend to over-engineer solutions.
(I find myself doing this frequently!)
These rabbit holes can be huge time sucks for no real benefit.
We discuss:
When timing/speed matters and when it doesn't
The types of trading strategies where latency is likely the bottleneck
How rushing to solve problems can be counter-productive (waiting can reveal simpler solutions)
Concrete steps to determine if latency is really an issue and how to address it
And much more...
Thanks for the excellent question, Isaac!
-Dave
P.S.
Why is every other trader printing money while you’re stuck?