Preparing for Disaster

Dr. Steenbarger recently wrote about recovering from a disk crash. If you use computers for anything as important as trading, it is vital to have a rock-solid backup plan and stick to it. There's two main parts to this: data protection and connection protection.

Data protection

Here's what I do: I keep all my important data on the primary disk in my PC. This is all replicated on a file server on my local network. Whenever I change an important file, I copy it to the file server. Weekly, I copy the data to a separate laptop PC and make another copy on a removable hard drive. Whenever I visit my summer home, I take that with me and copy it onto the PC there. I have one more copy on a USB stick that resides in my safe deposit box. The key is multiple backups in multiple locations. Having two copies of your data sitting in the same room does you no good if you're struck by a fire, flood, or theft.

Connection protection

Just as bad is if you're about to sell some big position because the market is turning over and your PC crashes. That is very not so good. Here's what I do: I have my trading platform open on two different PC's during the trading day. Both are plugged into a battery backup UPS. I keep a lnadline and have a modem so I can resort to dialup if my cable connection fails. And I have my broker on speed dial so I can phone in an order if all else fails.

Of course none of this will help if Martians land on Wall St. and everyone in America is trying to exit their positions at the same time. But if you're trading for a living it's still important to do as much as you reasonably can to avoid that horrible "uh oh" sinking feeling when the screen goes blue.