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Why use a VPS to trade Forex ?

 

What advantages does a VPS give to a trader ?

Price Feed Latency and Order Routing Latency

One of the main advantages a VPS provides to a trader is the performance increase due to the proximity to the broker's MT4 server. By hosting your MT4 client on a VPS close to the broker's MT4 server data can move faster both to and from the MT4 client and the MT4 server.

Trading is a competition between all players in the market. Any advantage or edge that one trader can have over another trader can help a trader win that competition. In the case of latency, the trader with the lower latency will receive price quote data before a trader with a higher latency connection and can also execute orders faster than a trader on a slower (higher latency) connection.

The low latency trading system can react faster to price movement and enter and exit trades faster than the higher latency trader.

A simple example of an EA that will send an order when a certain price is hit.

A trader using a common medium latency time of 100ms will take 100ms to get the price quote from the broker's MT4 server and then another 100ms to get the order sent back to the broker, resulting in a 200ms delay from the time the price quote is sent from the broker until the market order is received back at brokers server.

The order has been receive at the brokers server based on what happened 200ms in the past. It is very possible that the price that was quoted 200ms ago is no longer available resulting in slippage or even more communication back from the server to the client, thus increasing the order execution time by another 200ms and possibly even resulting in a rejected order.

If the latency is 1ms (milliseconds) from the server, it takes 1ms for the price data to be sent from the server to the EA on the MT4 client.


- Once the price level is hit and the EA receives the price, it creates an order and the order is sent back to the server which takes another 1ms.

- Within 2ms the EA has detected the order entry condition, reacted and sent an order back to the server.

The trader with the lower latency is trading closer in time to the current market price and can enter and exit the market faster and with less slippage and reduce or avoid rejected orders. Even if the latency is reduced from 100ms to 5ms the EA will perform 20 times faster between client and server from the price quote to order entry.

Tick Data Rate

Due to our high quality servers and commercial network located close to many broker's servers in New York, the MT4 client can receive more tick data than a lesser computer running on a poorer quality Internet connection. Each tick is a price quote, receiving more ticks means more price information is received into the MT4 client, which can have a beneficial effect on EAs and even the accuracy of the painting of price bars.

Speed, Quality and Reliability of Platform

Our servers use Xeon CPUs, enterprise grade SSD storage, ECC RAM, redundant power supplies, backup power systems and multiple commercial grade network connections to the internet. The result is a system that is faster and more reliable than a consumer based computer system running on a consumer grade Internet connection.

Convenience

There is no need to leave a computer running and working 24 hours a day at your home. You can access your VPS from any location where there is and internet connection, using a laptop computer, a desktop computer a android tablet, Apple iPad or even a smart phone and because the network is commercial quality the speed accessing the VPS is super fast resulting in a smooth and responsive experience. Everytime you log back into the VPS everything is the same as when you left it.

Isolation and Separation of Trading Activities

By using a VPS solely for trading, you reduce the risk of affecting the performance of the trading system from other activities, such as network intensive activities like Youtube, Skype, online games etc that can rob the MT4 client of the bandwidth it needs to perform optimally and even increase the latency further if the bandwidth usage becomes saturated. Other activities like playing computer games or other CPU intensive tasks can also have negative effects on the EA and there is more chance of bugs and crashes using a computer that is being used for multiple purposes rather than a VPS that is designed to solely run MT4 and associated EAs using commercial bandwidth.

 



 

 

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