Testing latency
Network latency is the amount of time it takes for a data packet to go from one place to another. In general, the lower the latency, the faster a system will send and receive data, resulting in a better user experience.
Lag refers to the latency between the input to a simulation and the visual/auditory response, often occurring because of network delay.
In online trading, lag can cause incorrect chart data and delayed order execution. It is important to have as low latency as possible.
Ping test
Ping and jitter are measures of the speed at which you can request and receive data (ping) and the variation in that response time (jitter). In essence, they are measures of the quality of your connection and are used to diagnose performance of real-time applications of many types, including video streaming and voice over internet (VoIP).
If you have a Rithmic account, to test the latency of your trading connection, log into R Trader Pro with the market data section also enabled on the login screen.
Then select Window –> Preferences –> Performance Tab.
Broker data types
In the Performance tab, there are 3 options for checking latency:
- Order
- Price (market data)
- RMS (risk management server).
The most important ones are Price and RMS. Price is the latency of receiving live market data into your charts.
RMS is the latency to the broker through Rithmic, because all orders first go to RMS to check for things like margin requirements, account balance, etc.
Measurement
The latency Rithmic Trader Pro shows is round trip, but you can divide these numbers in half for one way because you'd only be sending orders one way to RMS, and market data is only coming to you, so the one way trip is the effective number.
For example, if you see 1380μs (microseconds) for round trip, that would be 0.69 milliseconds (ms) for the broker to receive the order through a Rithmic account.