One trader I know from New England uses just a laptop to manage a portfolio worth close to $800,000. Another trader from Florida trades an even larger portfolio and uses four computers with four monitors and at least four separate Internet service providers. Both tell me they're basically happy with their systems.

What kind of computer should the rest of us use to trade? Here's a somewhat obvious rule: It depends on the kind of trader you are. If you make one or two trades per month and you tend to hold your positions long term, chances are you could get by with whatever computer you're using to read this column. On the other hand, if you're making some decent money as an active trader, a good computer system with multiple monitors and high-speed Internet access can make your work easier and a lot more fun. Plus, if that system helps you avoid crashes, it might even save you a bundle one day. Nobody wants to see his or her computer freeze up when trying to exit a lousy position.

By computer system, I mean the hardware, the operating system (OS) and your uplinks to your broker -- the whole package. Let's take a look at each component part. Then we'll look at a couple of preconfigured systems available on the market. And then I'll try to convince you that a system consisting of several separate computers, not necessarily networked, might be your best bet overall.

The Box

Here the choice is easy. If you plan to conduct all your trading activities via one computer, you'll need one with a fast CPU -- the main chip that powers the computer. Look for one with a clock speed of 500 megahertz or more. Add copious amounts of RAM (random access memory), from 128 to 512 megabytes. And, of course, a high-speed internal bus so all that power can be routed efficiently within the guts of your system.

Why do you need such a high-octane system? Because if you're running just one computer, you'll be running a lot of mission critical applications simultaneously and therefore increasing the chances of a crash. Those applications might include your quote and news provider, along with your broker's trading software. Any of these applications may exist as "thin clients" -- applications that draw and manipulate data from a remote server (see a

previous column for more details). Or, they may simply come through a handful of browser windows you keep open simultaneously.

Either way, you'll need the memory and speed so you can toggle quickly from one application to the other. Something else that wouldn't hurt would be a turbocharged graphics card. This will enable your computer to build screens faster. Some traders who run multiple monitors off a single computer (I'll get to that below) buy graphics cards with as much as 128 megs of dedicated memory -- that's in addition to the memory prescribed above for your system as a whole.

And a final requirement: Again, this sounds obvious, but get a system that offers decent tech support. That either means a name brand or a make backed by somebody local who'll help you untangle any glitches. Personally, I've owned both

IBM

(IBM) - Get Report

and

Compaq

(CPQ)

systems. The IBMs tended to have hardware problems; the Compaqs have had their share of software meltdowns. But both companies answer their tech support lines within a reasonable amount of time.

ZDNet.com is a good place to check out hardware reviews.

The OS

The best trading systems until now have run on Windows NT Workstation 4.0. This is the industrial-strength version of Windows, designed to keep resource-hogging computer workstations from crashing. And it is infinitely superior to Windows 98, which tends to crash if you so much as look at it disparagingly. Before you upgrade to NT 4.0 or -- better -- buy a new system with NT 4.0 preloaded, call your broker or quote supplier to make sure its trading software is fully compatible with NT.

So what about Windows 2000, the successor to NT 4.0? Consider waiting a year for all the bugs to be worked out of Windows 2000. And even then, you'd be better off buying a computer with the OS factory installed. Need more convincing? It'll likely take at least a year for popular trading programs such as

Real Tick and

TradeCast to optimize their software for Windows 2000 and work out potential bugs. Until then, there's no sane reason why you should be a guinea pig, not when your own money's on the line.

Monitors

Ah, yes, monitors. The really cool thing about high-end trading systems is that they use multiple monitors -- sometimes four or more. Active traders use multiple monitors so they can keep lots of windows open on their screens at once. For example, you might have one monitor dedicated to order execution, one that displays general market indicators, one for news and maybe one that contains the level II screen of a stock you're trading at the moment. Windows 98 and Windows NT 4.0 support multiple monitors running off a single PC.

If you didn't get too badly hurt by the crash this spring, why not treat yourself to the ultimate monitor:

Philips Brilliance 42-inch plasma flat screen display, which is about $5,000. It's the one you may have seen in that

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ad on

CNBC

, the one featuring "Hal" the computer. Not so flush with cash? Traders I know like 21-inch monitors. These run about $900 each. Look for resolution in the 800 x 1200 range. The higher the resolution the easier on your eyes -- something to consider if you plan on spending eight hours or more staring at screens just inches from your eyes. Again, check out the reviews at ZDNet.com.

Internet Service Providers

Cable modem or digital subscriber line (known as DSL)? Traders have learned to love and hate the two most popular broadband pipelines. Which is to say, when these services work we love them. But both cable and DSL have their share of problems. Generally, however, DSL is the better of the two. True, it's not as fast as cable. But it's a direct link to the Internet, whereas a cable modem routes you through a network, and it's prone to the usual network slowdowns and outages. DSL is an even better choice if you plan to trade after hours, since cable modem networks slow down noticeably once school and work let out and everyone logs on.

Two even better alternatives are a fractional T-1 line or a direct dialup to your brokers.

A T-1 line is a high-speed connection, transferring 1.5 million bytes per second, which compares with 53,000 for the fastest dial-up modems. A full T-1 line can cost $1,000 a month. A fractional T-1, of course, will cost some fraction of that, but it may not be available in all areas; contact your local phone company.

On-Site Trading and

CyBerCorp.com are among the active-trader brokers that offer trading by direct dialup. A high-speed private network like this can run $1,000 a month, depending on the set-up.

A final word on connections: Sign up for one or more free or low-cost ISPs, even if you have a cable modem, a T-1 or whatever. These other providers can serve as your back up if your primary connection service goes down.

Preconfigured Systems

Two companies I know sell multiple-monitor trader workstations online:

TriKinetic Technologies and

SCI. Prices range from $3,000 to $7,500. SCI factory loads several popular trading software programs, such as

WindowOnWallStreet, as part of its package price -- a definite advantage if one of these programs is what you plan to use. When the software is factory-loaded, it will have already been tested to ensure it has no crash-inducing conflicts with other programs running on the computer.

Do It Yourself

And what do I think is the ultimate trading computer? It's not just one, but three computers. And if that sounds like a major investment, consider that you probably have a couple of outdated machines lying around that could be upgraded and put to work. But before you do that, erase the hard drive and reload the operating system so that you start off with a clean slate. You want to get rid of all the software you've accumulated that'll potentially gum things up.

Here's how the setup would work: Use computer No. 1 for your quote and news feed, and computer No. 2 strictly for order entry. Each computer should have a separate monitor. And of course you can place these monitors side by side.

Load the software for quotes and news and the program for order entry -- and a backup ISP --

onto both machines

in case either should go down. With the help of your local computer consultant or broadband service provider, you should be able to patch both computers into the same Internet connection, be it DSL or cable modem. Otherwise resist the temptation to network these computers, since that will only add an extra layer of complexity, and with it the potential for bugs.

As for computer No. 3, it, too, can patch into your primary and backup ISP. Use this machine for all your other applications, like spreadsheets and

Flight Simulator

. And while you're trading, use it for chat and to surf the Web.

Mark Ingebretsen is editor-at-large with

Online Investor magazine. He has written for a wide variety of business and financial publications. Currently he holds no positions in the stocks of companies mentioned in this column. While Ingebretsen cannot provide investment advice or recommendations, he welcomes your feedback at

mingebretsen@onlineinvestor.com.