This chapter helps you get oriented and comfortable with what ErlangerQuote does and the big picture.
Welcome
This manual is designed to get you up and running with ErlangerQuote. Although you can open to any chapter and start learning, it works best if you read the manual sequentially from beginning to end.
So what will you learn in this manual?
First, you'll learn just what a "quote" is at the stock exchange and how it finds its way to your PC and screen. Along the way you will learn how the Quote.com data feed works, and how to order it. Next you will see how to download ErlangerQuote, install it, set up your name and password, start the program. Once you are up and running you will see how to set up a very simple quote sheet and a chart.
Next we will show how to set up an alert, and how to create
a formula, then scan a market with a simple formula that looks for bullish
breakouts. We'll show you how to access the formula reference, how to use the
line tools on charts, and how to set up a simple portfolio. Once you have
finished this manual you will be well on your way to understanding the finer
points of ErlangerQuote.
To help you understand the overall process, below is a illustration of the flow of information from the action of a trade on the exchange floor to your PC screen in a chart, a time and sales sheet, or whatever way you want to view it. The idea here is that in order to get from the trading floor to your PC screen there are at least 6 major steps that must happen in concert without missing a beat.
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1 |
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2 |
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3 |
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4 |
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5 |
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6 |
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Trade occurs on the exchange floor |
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Exchange Transmits Trade |
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Aggregator (e.g. Comstock) Receives
then Transmits Trade |
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Data Vendor Servers Receive then
Transmit Trade |
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Internet & Your ISP Receive and
Transmit Trade |
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Your PC Receives the Trade |
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Trader |
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NYSE |
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Comstock |
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Quote.com |
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EarthLink |
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You |
Figure 1 The chain of
events from a trade to your PC's quote sheet
The trade takes place in a large group of traders yelling out bids and offers. When a trade is made it is recorded on a piece of paper and run to the computer station where it is entered through a terminal.
The Exchange transmits the information about the trade from its computer over some high speed connection to a group of brokers, data aggregators, vendors, companies and other vendors and government bodies. The aggregators filter and clean up the incoming trade records and add other content like news. There are several such exchanges, the NYSE, NASDAQ, AMEX are a few examples. There are smaller private electronic exchanges as well called ECNs. There are also brick and mortar buildings that house option exchanges, futures, and for commodities.
The Exchanges protect their data fiercely, and to use the data you will have to learn to be comfortable signing long and verbose contracts, that make you promise never to hold the source of the data accountable for its accuracy. You would think from reading these documents that the data was incorrect most of the time, but unless you sign, you no get. So put on your Yoda cap and force yourself to accept these overbearing documents. And let’s all hope that someday the NASDAQ will stop gouging us for $50.00 per month for their quotes.
There are companies which serve one purpose and that is to sell data of all kinds to all kinds of buyers. These resellers buy data from the exchanges and then sell it to other retailers. They are sort of like wholesalers, buying the raw data in quantity and reselling it at a discount. One such reseller is Comstock (www.comstock.com). Comstock merges data from several sources and resells them to quote feed retailers, such as Lycos/Quote.com. Comstock is not the sole supplier of data to Quote.com but one of the largest.
The Data Vendor is whom you buy your quotes from, and that can be Quote.com, DBC, ATFI, DTN, Interquote, and many others. These companies take the data from one or more aggregators, add their own data, be it other indicators or historical data, and then they retransmit it to the client programs that the data vendor supports, or to any programs that have interfaces to the data vendors format. When talking about the program's "feed" this is usually what is being referred to. However now you see there are many more pieces involved. In the case of ErlangerQuote for Quote.com, the data comes from the Quote.com server farm, which is a collection of computers located around the United States. Note the link between the data vendor and the Aggregator is a critical path, and if it goes down, the stream of quotes stops. The data vendor receives the data and puts it on his main server, then he must resend it to the other servers that are mirror images of his main server. This is called load balancing and is the way that data vendors handle the different geographical locations of their clients. The server farm, as it is called, must be balanced so that the data is spread equally among the servers that make up the farm. Finally the data from the servers must be sent to your ISP in response to any request you make of the servers.
Your ISP is your Internet Service Provider and the final link from the data vendor to your PC. An ISP may be any of a gazillion companies, so its impossible to say anything specific, however, there are some general things to keep in mind. If your ISP has outages, meaning its connection to the Internet superhighway fails, and you can't log in, you will have a bad experience with any real time quoting program you use with this service. If your ISP has a noisy line connected between their servers and your modem, your quotes will be unreliable. If your ISP servers get overwhelmed by too many users at 3:00 PM or 5:00 PM during critical usage hours, your quotes will be unreliable. You want to find an ISP that has good, clean connections, and outstanding technical support.
Yes Martha, the computer must be working perfectly for your quote programs to work perfectly. If your PC is flaky, if there is not enough memory (128K min recommended), if the hard disk is terribly fragmented (use Norton Utilities to clean up), or if the processor is one step above an 8 Track Player in power (minimum 300MHz Pentium II recommended), its time to think about upgrading.
The point of all this is that each step is a link in a chain and if any link is broken or unreliable, the entire chain is broken. Its broken because you need the data from step 1, the actual trade on the floor, to reach step 6, your PC almost instantly. If the Internet is faulty your in trouble because no matter how good the flow from point 1 to 4, if the link from 4 to 6 is broken, you get no quotes.
The story is even more complicated. The small arrows pointing to the right in the illustration are actually communication links. There is a link from the exchange computers to the aggregator, it may be satellite, cable, FM radio or the Internet over a T3 or T1 line. It may be a DSL connection since speeds of conditioned lines can be high. Most likely it’s a leased line that cost many thousands of dollars a month and even so such lines are often the target of contractors digging holes at construction sites. We can't of course do much about these events, but they do happen. The more likely places that the linkage is critical is between the Data Vendor, the Internet, and your PC (steps 4 to 6).
Now you are in a position to appreciate what exactly the ErlangerQuote application does, you can download it and try it out. Keep in mind you will need a QCharts trading or investing account before you can use ErlangerQuote.