Why is it important to keep your trading equipment up to date?
As a foreign exchange trader, it’s essential that you keep your trading equipment updated at all times. If you don’t, the consequences can be quite serious.
It could, for example, lead to your equipment breaking down at a crucial moment. And it can also have an impact on your state of mind while trading, too, and lead you to finding out the hard way that knee-jerk reactions can have financial consequences.
But how do you do this? How can you ensure that you aren’t left high and dry when it comes to maintaining your trading equipment? Read on to find out.
Conduct an audit of what you have
It’s wise to start with an audit of the trading equipment you currently have in your possession. This would begin with the hardware you own and an assessment of its suitability. You should make a list that includes your computer type as well as any accessories such as a mouse, multiple screens or even your chair. Also included in this list should be your mobile phone, if you use that for any trading purposes at all.
The next step in your audit of trading equipment is to look at the software you have available to use. Most traders use a well-recognised software package like MetaTrader 4 or MetaTrader 5, for example, while some use an in-house package developed by their broker. Sites like The Bull can help you find out which broker offers what forms of the latest trading technology – so it is worth reading some reviews and doing your research.
Act on anything that requires it
The idea behind doing an audit is that it means you get a comprehensive idea of what equipment you have at your disposal – information which you can use as a benchmark. The next step, then, is to do some research into whether or not the equipment you have is the best for the job.
For hardware, you might be able to come to an answer intuitively. If you’re always finding yourself juggling screens and it’s impeding your ability to trade well, for example, it’s likely that you need to invest in a new screen to make the trading process run more smoothly.
On other occasions, however, research might be required. This is especially true for software. If you’re a regular user of MetaTrader 4, you might feel that all of your trading needs are satisfied already. What you might not realise is that MetaTrader 5, the next version up, provides a variety of even better features – such as the capacity for netting, which contrasts with MetaTrader 4’s capacity just for hedging. It’s only through performing this audit and doing your research that you’ll be able to access those added benefits – and hence, hopefully, have a better trading experience.
Why does keeping your equipment up to date matter?
On the face of it, it might seem like the above tasks are just added time drags – and time that could otherwise be spent trading. It’s certainly true to say that keeping your trading equipment up to date is not necessarily the most financially productive task a trader can complete. On the contrary, it’s the sort of job that saps time and falls into the same category as tax returns, administration and more.
But it’s worth spending the time on it, and it’s best conceptualised as an investment. Each time you upgrade your trading equipment, you’re potentially making it easier to secure returns on your investments. Faster software with more features and analytical tools might make it simpler to spot market-beating insights and financial rewards, for example – so it can be worth doing.
If you use the best kit, you may also find that there’s an emotional consequence for you. It’s possible that you’ll feel less frustrated if you’re using a system that is faster, for example – meaning that you have a clearer head for trading and are less likely to make a knee-jerk reaction if something goes wrong in the markets in which you hold open positions. In short, it can potentially contribute to a virtuous cycle which leads to better investment returns.
Overall, keeping your trading equipment up to date is an important part of having an effective trading strategy. By auditing what you have and putting in the research time to act on what you’re missing, you can help raise the chances of meeting your trading goals.