In this article, it will be presented the basics of a computer and something a bit more technical like the fetch-execute cycle. We will also present a variety of computers branded with different names created solely for marketing purposes. Trading computers aim to catch the attention of a specific niche that may think an Intel i9 or i7 may bring better trading results than an Intel i5, which probably won’t. Unless you use heavy coding/decoding tasks, buying a branded “trading computer” will have an up to 50% price increase with the same computer components. Is it worth paying 50% more for the band “trading computer” on the product?
Before you proceed, I must warn you that if you have money to spare and don’t care about if you need or not a trading computer, I advise you not to read this article. Just skip all of this and just get the fancier computer money can buy. But, if you want to understand how a computer works and to find out if you REALLY need a “trading computer”, it’s time for us to get going. Have a nice read.
The basics of a computer
The main components of a regular computer are:
- CPU (Central Processor Unit): It executes mathematical instructions;
- RAM (Random Access Memory): Volatile and fast access temporary data storage;
- Motherboard: The backbone that connects all parts;
- Hard drive: Persistent data storage;
- GPU (Graphics Processor Unit): It executes mathematical instructions as well as the CPU, but is mainly related to graphics. This one is responsible to generate the video signal that will be sent to a computer display. It can be built on the CPU or it can be an external device attached to the motherboard;
- Power supply: Responsible to convert the power from the electric source to computer components;
- Computer case: Unless you don’t bother to mount your computer on the table, you’ll need a “box” to settle the parts in;
- Monitor: No explanation is needed here. You need to see something, right?;
- Basic peripherals: Mouse, Keyboard, Headset, Microphone, Webcam…your choice here.
Before you decide IF you need a “trading” computer, you need at least to understand how the fetch-execute cycle works. Well, actually you don’t have to… but I strongly advise you to.
What my computer has to do?
The “fetch-execute” cycle is known as the basic operation of a computer. You can read more about it here. The CPU needs to fetch instructions from the RAM in order to decode and execute it. It looks like you when your wife asks you to throw the garbage out. The only difference here is that the CPU would execute this instruction immediately.
Basically, the CPU will fetch instructions from RAM. If you have just a few gigs of RAM, then the CPU will have to look for these instructions somewhere else (on its cache memory that is very small). If the RAM and the Cache aren’t enough to store all the data needed, the CPU will fetch instructions from the hard drive that is way slower than RAM and Cache. So, it’s clear what will happen if you have a small amount of RAM and a slow CPU that will have also a small cache. This is like an orchestra where everybody works together.
To open a Microsoft Word or Excel is completely different than to open multiple browser tabs or run a complex Python code. Every one of these activities will send instructions, but the complexity of them will take different computing times.
Tom Scott provides a great explanation of how this cycle works. Check it out.
Do you really need a different computer for each task?
If the fetch-execute cycle is the same, why would we need a different computer for each task? The main problem is that specific activities will require the computation of complex instructions.
Some specific trading strategies like day trading or leveraged trading need to rely on computers capable of handling an enormous amount of data. But do you really need a “trading computer”?
Let’s take a closer look at the different kinds of computers that the companies are creating:
- Gaming computer: This is a computer that is able to perform well the “fetch-execute” cycle related to gaming activities. A computer game will rely heavily on the GPU. Due to its unique capacity to perform calculations, they’ve been widely used in the academic field and also in cryptocurrency mining as can be seen here;
- “Your profession” + computer: This one is very cool. You may have also seen a specific computer made for “architects”, “engineers” or “doctors”. Since I’m an economist, I believe they wouldn’t work with me;
- “Office and productivity” computers: These are the slower ones. They focus on ordinary office and productivity activities like internet and Microsoft Word;
- “Ultrabook“: This is related to a notebook that is lighter than an ordinary notebook, but it can be equipped with the same high-end processor as the other ones. The problem is that nobody tells you that these notebooks will probably come with slower CPUs that will hodl the “U” designation at the end meaning “Ultra-Low Voltage”. You thought that less weight would come without a price, huh?!?!
- “Netbook“: A very simple notebook that should only be used for the internet and some productivity.
- Notebook: Regular portable computer. There are thousands of models here.
- Specific computer: We can understand this one as a special category. Here comes the “trading computer”. As the name says, a trading computer it’s equipment that should supposedly be able to perform better tasks related to numerical calculations for stocks or cryptocurrency trading.
The greatest truth of all is that companies can make an enormous amount of money by segregating their products into multiple niches. Do you want to use Microsoft Office? Get our “Microsoft Office Computer”. Do you want to use the internet? Get our “High-end internet computer”. If you want to use Microsoft office AND the internet, then you’ll need to get a “Hybrid Office/Web computer”. People usually don’t understand the difference between a Ryzen or Intel CPU, 32GB or 64GB of RAM, Radeon or Nvidia GPU, so the companies can help you by just branding the computers with a seal of “Trading”, “Gaming”, “Productivity” and charging much more for it. Instead of buying a product that will fit all of your needs, the companies drive the consumer through a labyrinth. Why? Because they can and marketing is not a crime. Ask yourself this: What specific calculation a trading computer will need to do that an ordinary fast computer with premium components can’t?
“Since when marketing is a crime?”
I remember this comic. Intel Corporation had released a Pentium 4-branded processor with the codename “Prescott”. The problem was that the CPU was running hot and performing lower than its competitor AMD.
- Our new chip is slower than our competition’s products. (that is a fact, right?)
- We’ll claim we’re the fastest. If anyone does benchmark tests, we’ll say they used old drivers. (that’s marketing)
- Whenever I talk to you, I feel like I should be wearing a wire. (that’s a fact again.)
- Since when marketing is a crime?
That’s a very nice question: “Since when marketing is a crime?”.
Let’s take a look at what we have available out there.
Shopping for trading computers
This is a very nice buying guide from Blue Aura Computers, but it shouldn’t be understood as a guide to building a computer for “ultimate trading”. This is nothing but a computer with premium components (good cpu and motherboard, nice power supply, a lot of ram, faster hard drive and a great monitor array) that can be used for anything.
The major difference is the monitor array since you won’t need so many monitors for gaming or productivity. What I’m trying to say is that neither Intel, AMD, Gigabyte, ASUS, MSI, Kingston, nor Seasonic is building anything focusing on trading, engineering, or architecture… these are all premium components that can be combined to do anything. Not only trading.
There are no magical recipes, configurations, or components inside this computer. This is why different than auto shops, for example, that build custom automotive creations. In this case, this goes much beyond combining items together. There is the “art” recipe here, not only someone putting PC components together, branding a computer with the name “trading” on it, and charging you 50% more for it.
When the companies claim that they have built “trading computers”, these are just regular computers with premium components and a nice monitor array. If you will pay more for it, then it’s your call. I’m not saying that the product is bad, of course, it’s not. What I’m saying is that they’ve combined all parts together to sell it as a “Trading computer”. This is something that you should do yourself if you like.
Let’s take a look at some products and compare their price to a big and well-known American retailer called Newegg:
- Example: Trader 8000 Extreme “Advanced Intel Trading PC”.
- Intel Core i7 12700K (Newegg retail price: $379)
- Motherboard Asus Z690-P (Newegg retail price: $219)
- Power Supply 850W SeaSonic Hybrid (Newegg retail price: $161)
- Noctua NH-U12A CPU Cooler (Newegg retail price: $110)
- 64GB DDR4 RAM (Newegg retail price: $165)
- nVidia 710GT (3 monitor Support) (Newegg retail price: $94)
- Fractal Design Define 7 Compact (Newegg retail price: $190)
- 1TB Samsung 970 EVO (Newegg retail price: $166)
- Windows 11 Pro (Newegg retail price: $200)
Take a look at this, dear trader:
- TOTAL PRICE ON NEWEGG RETAILER: $1.687 + $0 shipping = $1.687 + tax
- TOTAL PRICE TRADER 8000 EXTREME: $ 2.449 + $35 shipping = $2.484 (+47%)
You need to add the tax to the Newegg price which will depend on your state. Isn’t clear to me if the Trader 8000 price is tax included or not, but it makes no difference. The difference seems huge.
My argument isn’t related to any specific company selling these products. The one we have used in our example has plenty of years of experience in the market. As a consumer, you need to analyze what they are offering. Does the 50% difference include an extended warranty? Do they go to your house to settle the equipment? Is there a 24/7 line to help you if you need it? I don’t know what you will get by buying this specific product, but I know all of this goes into the price. If you have to pay 50% just for a computer with the “trading” branded on it and nothing else, it may be too much.
My argument isn’t related either to the premium components like the i7 12700K and 64GB of RAM, since this product is aimed to be an “Extreme” version. My argument relies on THE PRICE and THE PRICE ONLY.
IMHO, 50% is a LOT of difference just to add the name “Trading” to a computer assembly that is nothing but premium components combined altogether. Don’t think that you’ll be able to do better trading because you are using an i7 12700K instead of an i5 12600K, because YOU WILL NOT.
In addition to that, I personally HIGHLY DOUBT that any common trading applications would fully benefit from an Intel i7 12700K. Not even Blender, a free and open source 3d creation suite or Python with its variety of applications will take a CPU like that to 100% of usage. It will be unlikely to achieve even 50% of usage.
So, if you are not running a high-end extraterrestrial algorithm built on Python or any other fancy language doing 5 trillion calculations per second, I highly doubt you will ever need something like that. This can also be applied to the 64GB of memory which will probably be an overkill setup for a trading computer.
So, my main arguments here for your reflections are:
- Do you really need to pay 50%+ more for a computer with the name “Trading” labeled on it?
Think wise. It’s your money after all. If you don’t like to lose it on trading, I believe you won’t like to lose it on expensive “trading” labeled computers as well. Stay away from labels. Build yourself.