Forex trading is a fast-paced environment that traders need to react to at a rapid pace in order to find the best opportunities. It’s with this in mind that failing to incorporate a VPS into your strategy could end up costing you thousands of dollars.
The forex market has grown into a wildly valuable ecosystem, and all evidence shows that there’s still plenty of room for the FX landscape to evolve further. In late 2022, it was reported that over $7.5 trillion passes through forex markets each day worldwide, and it’s for this reason that traders must act decisively if they’re to execute the best trades on a consistent basis.
So, what are the hidden costs to traders who haven’t yet incorporated a VPS, or virtual private server, into their trading strategy? Let’s take a deeper look into one of the most powerful tools that FX traders can utilize to maximize their portfolio performance:
What Is a VPS?
Virtual private servers, better known as VPS, have the power to host their own operating systems that can be remotely accessed from any other computer. Performing in a similar way to web hosting servers that store masses of data in the form of text, photos, videos, music, and other multimedia, a VPS effectively hosts a digital copy of your machine.
This also means that utilizing a VPS can be highly beneficial in the world of forex trading. Here, traders can keep their systems running and poised to execute trades autonomously without having to stay glued to their trading rig all day and night or even leaving their computer switched on 24 hours a day.
Because a VPS can work autonomously on your PC, it also means that it’s fully accessible from remote locations, which can help forex traders who are always at home or those who would rather spend their time trading from locations like coffee shops or other public places.
While this makes the use of a VPS seem like an added luxury for traders, there’s actually a fundamental need for users to reap the benefits of a virtual private network or else risk losing out on their profit margins and the opportunity to make money from trades that they would otherwise struggle to access.
With this in mind, let’s explore the hidden costs of failing to utilize a VPS for your trading strategy:
Harnessing the Power of Latency
When executing a forex trade, there are many processes that your request needs to follow before the action shows up in your portfolio. In sending a signal from your trading platform , your broker must subsequently receive your request, and respond to it in a manner that’s swift enough to ensure that the deal goes through.
Any delay in the delivery of your request could result in a trade breaking down because of a price change or another mitigating circumstance. It’s this delay between setting up an order and completing it that we know as latency.
When trading directly from your computer, you’re wholly dependent on the speed of your machine and the quality of your internet connection to execute trades. The problem with this is that traditional internet connections can struggle to maintain the same levels of latency over time, and particularly at busy periods, as opposed to a VPS.
Why should you worry about your latency as a forex trader? Because, if a high latency slows your order down for a price to change, your trade will be invalidated and you’ll lose out on your opportunity entirely. If you’re undertaking high-frequency trading, or are looking to trade significant FX volumes, these delays could ultimately cost you a small fortune.
Fortunately, dedicated VPS platforms like MetaQuotes’ MetaTrader 5 VPS service is a secure platform that has recently undergone a massive update to bolster usability and the performance of the server.
With over a dozen hosting points located globally, the MetaTrader 5 VPS offers seamless access with less than five milliseconds latency for as much as 82% of brokerage servers. This empowers traders to gain a crucial edge in bolstering their execution speed.
With 99.99% maximum uptime and 24/7 accessibility, the MetaTrader 5 VPS offers clear insight into how FX traders can avoid the pitfalls of weaker internet connections when it comes to maximizing their potential.
Paving the Way for Autonomous Trading
Another hidden cost of failing to utilize a virtual private server stems from the level of uptime that you’ll lose out on as a result of maintaining only connections through your existing trading apparatus.
Through the use of a forex VPS, you’re able to fully automate your trading processes to execute deals successfully even while your computer isn’t switched on.
These servers are generally more stable and reliable to use than a traditional computer or trading setup, and as a result, you can execute trades around the clock as you see fit. You don’t even need to be at home to buy, sell, or trade currency, and you can connect to your VPS through virtually any internet-connected device like a smartphone or tablet on the go.
Whether you’re seeking to buy and sell currency at a cafe or at a prescheduled event, you have the freedom to connect and trade wherever you like.
This also comes with greater benefits. Not only can you have the power to be perpetually connected to your forex VPS, but so too can trading bots or Expert Advisors that can operate on your behalf, even while you’re asleep and your PC is switched off.
To access these trading bots, simply set up MetaTrader 5 or your favored trading terminal inside your VPS to run or purchase the bots you require from their marketplace.
Again, failing to utilize a VPS to trade around the clock leads to blind spots in your strategy where you’re either unavailable, away from home, or unable to keep running your machine to leverage the performance of your trading bots.
Note That VPS Access Can Be Expensive Too
Although it’s clear that utilizing a VPS can help to save forex traders a fortune in terms of consistent uptime and lower latency to move more decisively on trades, it’s also important to signify that these virtual private servers can be costly to set up also.
The market for forex servers is relatively diverse, and a good VPS can run up a cost of anything from $10 to $100 or more each month.
You’ll also need to have access to a machine with sufficient specifications to support your VPS, although they can be light on disk space. However, a certain level of RAM can be useful to help foster high performance.
With this in mind, you should certainly assess your prospective costs compared to potential profit margins before buying into a VPS. If you’re a high-frequency trader who requires a fast connection to make the right trade at the right time, a high-end VPS is likely to be a perfect solution. However, if you’re a more casual trader, you may want to consider a cheaper VPS to run, or to continue without while you dip your feet into the water.
What’s incontrovertible is that a good forex VPS has the power to transform your trading performance by leveraging trades faster and guaranteeing far greater levels of uptime. By sticking with a traditional trading rig, you risk becoming lost in the sea of the trillions of dollars distributed throughout FX markets daily. It’s only those with the best access to trading tools that can be in a position to reap the rewards of the ever-dynamic world of forex.
