Internet speed for day traders is probably one of the biggest misconceptions out there for everyone that wants to start day trading. When I left the United States to travel around the world I knew that I would have problems with internet.
The internet situation in South America and Africa is nothing like more developed countries such as the United States and Europe. Out of the nearly 10 years that I have been day trading, I have used the last two years of day trading around the world to really test internet speeds.
I’ve been able to test internet speeds in 7 countries across 4 continents while traveling.
Understanding Internet Speeds
Internet for day trading relies on two aspects, download and upload speeds. You use both when you are using the internet since you are receiving and sending information. When you day trade you need a high download speed to receive market data and you need a decent upload speed to put in your orders. If you don’t have a high enough download speed then you won’t receive the market data quick enough to make informed decisions.
If you don’t have a good upload speed then you orders will be delayed
This is important because when you are day trading you are making split second decisions about when and where to buy and sell the market. If your information is delayed then you may be getting into the market at the wrong time and more importantly, the wrong place.
Minimum Download Internet Speed Required for Day Trading
The minimum internet speed you need to day trade is 1 mb. When a company tells you the internet speed understand that it is the maximum speed that network will have. That means that you will not have that speed continuously over time. For example, if a company tells you that the internet speed is 1 mb then that means it will fluctuate between .5 mb (or 500 kb) to a maximum of 1 mb. With this speed you won’t encounter any problems unless the internet goes down.
Minimum Upload Internet Speed Required for Day Trading
For upload speed you need a minimum of .5 mb or 500 kb. With this speed you will encounter a small amount of slippage (orders being filled a bit away from the prices that you want) and your orders may be delayed by a few milliseconds. I still have found that I am able to day trade even with this low speed.
Recommended Internet Speed for Day Trading
My recommendation for day trading internet speed is a minimum of 2mb download and 1 mb upload speed for day trading. While the minimum required is just enough the internet always fluctuates with the number of people that use it. That is the reason that the internet always slows down during the evening when everyone gets home.
If you would like to learn more about what you need to get started then click here to see my post about what you need to get started.