What is a forex VPS?
A forex VPS (virtual private server) is like a permanent link that connects your trading terminal to the wider trading network.
For example, when you use MT4 at home on your computer, you’re plugged into the standard trading network where your trades get executed. But what happens if there’s a power outage that leads to loss of your internet connection? Or a system glitch? Or your computer freezes or simply stops working?
Instantly you lose the ability to open, close or amend your trades, which can have big implications in a fast moving market.
Forex VPS hosting keeps you connected and lets you keep trading, giving you safety and security against unforeseen failures in the system. It is not only an automation tool, but can also be seen as a component of a trader´s risk management strategy.
How does forex VPS work?
Breaking it down in simple terms, forex VPS really is just a cloud-based desktop PC.
A VPS can host a version of an OS (operating system) that can be remotely controlled from basically any other device that is within reach. This is somewhat similar to web hosting servers, except that with the added capability of directly hosting your desktop computer while still being able to function independently as if it were on its own server (think renting out a room in someone’s house).
Although several VPS are created on one computer, they each have their own set amount of CPU power and space so you’re guaranteed on what you need and signed up for every month.
The forex VPS works as a SaaS, where you pay a monthly subscription cost for access to a VPS hosting service from a provider. Continue reading to discover some leading third-party VPS providers.
Why should I use a forex VPS?
The benefits of a Virtual Private Server (VPS) for automated trading include continuous internet connection and faster execution speed. VPS services are powerful, offering CPU speeds up to 20% higher than comparable servers because they have more RAM available to run processes in parallel while minimising usage spikes from other clients on the same server.
Some other important features about forex VPS hosting include:
Forex VPS servers constantly create backups of your entire trading configuration, including the operating system and trading software. No matter what issues you might have with your computer or devices, a VPS acts as a kind of safety net to protect you against issues that arise if a connection is unexpectedly broken. It means you can carry on trading without missing out on opportunities.
Improved latency and reduced slippage
Latency in trading basically describes how fast your trade gets executed. In other words, it’s the time between the moment you hit the ‘OK’ button to confirm a trade and the moment your trade is received in the marketplace.
In trading, latency is measured in milliseconds but in such a fast moving market milliseconds can matter a lot. So, the lower the latency the better. And one way to reduce latency is by having computer servers physically closer to exchanges, which is what a VPS connection gives you.
And with a fast connection, you’re less prone to slippage, which is the difference in the actual price between the moment you hit the button to confirm the trade and the moment the trade is received and completed.
The online world may seem instant, but everything takes some time. A major advantage of using a VPS is that it can be a low cost way to improve your latency and give you more reliable pricing.
Simplicity, security and efficiency
When you’re trading forex online it helps to think of it as a business that you’re running. You’re essentially investing money to try and make more money. So why wouldn’t you choose to implement the best technology to give yourself the best chance of being more profitable?
A VPS is a simple and cost effective way of helping you safeguard your system and reduce your level of risk so you can concentrate on building a path to being a successful trader.