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Successful forex traders often have humble beginnings, frequently trading on aged hardware with screens of various brands and sizes. To an untrained eye, their workspace doesn’t differ much from that of a typical garage tech startup.
Yet beyond late-night work and instant noodle meals, some traders break out on the path to becoming the equivalent of start-up unicorns. Suddenly, they require access to the market around the clock, with backups, lightning-fast internet, and reliable uptime. Fortunately, nowadays, this solution comes in the form of a virtual private server (VPS) that covers all those needs and more.
This article will explain the VPS, how it works and why every successful forex trader should consider having one.
How Does a Forex VPS Work?
A virtual VPS is an emulated server that contains a trading terminal and keeps it permanently connected to brokers’ trading networks. It works as a software-as-a-service, where you pay a monthly subscription for access. VPS is not a dedicated server — which is a more expensive solution — but instead is a single server system that hosts multiple private servers.
For serious traders, a VPS presents a way of running their automated or semi-automated forex trading systems 24 hours per day, 5 days per week. VPS is accessible from any smart device, thus offering a clear advantage for traders who want to monitor the markets without leaving their trading setup unattended.
How Does Latency Affect Forex Trading?
In forex trading, latency relates to the speed of delay between the user's request and the server's response. Latency is a measure of delay.
Institutional traders consider latency as one of the highest priorities. Thus hedge funds often race to purchase a property close to landing spots of subsea internet cables. On that level, having a millisecond of advantage can be a difference between making or losing money.
While inadequate network performance results in communication latency, retail traders face two other forms of latency. Lackluster server processing power leads to application latency. Meanwhile, memory latency arises when trading software needs to access data in memory — hazardous for trading systems that follow many currency pairs.
Benefits of Using a Forex Virtual Private Server
A VPS doesn’t eliminate forex risks, but it represents the next step in trading for serious traders. There are several options on the market, like ForexVPS.net, which you can review below.
Therefore, when you’re reviewing ForexVPS.net and the competition, you’re looking out for:
Digital malware is getting more advanced every day. Using a VPS can mitigate some security risks that arise from using a trading computer for other non-trading activities.
If you’re trading an automated system, you need a technical solution that tracks the market moves through the day. VPS is an affordable solution without the need to have a dedicated system.
VPS is accessible 24 hours per day, 7 days per week. You can access it from anywhere, through any smart device and keep track of your positions.
Drive failures can happen at any time. Holding a copy of your trading system automatically creates a backup copy in case anything goes wrong with your hardware.
Latency measures the response between your system and the server that executes your trades. Usually, this depends on the physical distance between you and the broker’s server. You can improve latency by trading through a VPS closer to the broker’s server.
Slippage is the difference between the price at the moment of the order execution and the price at which the order is filled. Since VPS lowers the latency between the parties, it will improve slippage – resulting in fewer surprises because of price fills far from the point of entry.
No Connectivity Issues
Stable connectivity is a major requirement for trading. Yet, connectivity drops at random times of day can frustrate traders, particularly if they happen at peak market times. A VPS provides stable uptime — an important feature for traders that run automated systems around the clock.
What to Consider When Selecting a Forex VPS
Hosting trading systems on remote servers doesn’t come in one-size-fits-all. Here is the list of specifications that you should keep in mind when selecting a forex VPS.
Although MetaTrader is the most popular forex trading software out there, there are other solutions like cTrader or broker’s proprietary solutions. Before you select a VPS, make sure it can run the operating system using your selected trading platform.
Trading software can require hefty hardware resources. If running an extensive system that trades many forex pairs, pay attention to hardware utilization, especially random access memory (RAM).
Data Center Location
Execution speed is one of the priorities, primarily if your trading system works intraday on a lower trading timeframe. For this reason, you should look for a VPS hosted in a data center close to your broker’s server location. Minimizing this distance will decrease latency and improve trade entries and results.
A VPS server is a cost that will eat into your trading profits. Before jumping into VPS trading, ensure your system is profitable on a large sample size that includes both forward and back-testing.
Start Trading with a Forex VPS
A forex VPS is a virtual private server that allows traders to access their trading platform from any computer or device with an internet connection. The VPS provides a secure and reliable way for traders to manage their trading accounts without being physically present at the computer terminal. It also eliminates the need for additional hardware, such as an extra computer, which can be expensive and inconvenient.
If you're looking for a VPS but don't know where to start, check out Benzinga's favorite Forex VPS!
Frequently Asked Questions
Do I need a VPS for MT4?
If trading anything other than short-term intraday scalping strategies, you should consider using a VPS for MT4.
Why do you need a VPS in forex trading?
VPS helps solve many technical problems with forex trading, like latency issues, 24/5 uptime or memory usage.
What is MetaTrader VPS?
MetaTrader VPS is a virtual server, rentable right from the MetaTrader terminal. It is a built-in virtual hosting designed to provide minimum network latency in a user-friendly format at an affordable price.
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