If you are to trade forex with any measure of success, two important things come to mind. These are efficiency and automation. Successful traders search for the best technology that will help them trade efficiently and without being glued to their monitors 24/7. Trading using VPS is one such way to bring efficiency to your trading strategy. Today, we take a look at what a VPS is and how it can be a great addition to your trading tools/technologies.
What is a VPS?
A virtual private server, or VPS for short, is a virtual machine which performs the same role as a server while you are online. When you have a VPS, you can control or make use of it wherever you may be, unlike a physical computer that may be out of reach when you are on the road. To put it simply, having a VPS is like having a cloud-based computer.
Providers of VPS rent them out to forex traders and other people who need these virtual desktop computers. Users pay a monthly rental fee, making this a SaaS (software as a service) model.
What are the benefits of trading using VPS?
No geographical limits. Trading using VPS removes geographical constraints on where one can trade from. Any internet-connected device in your possession, whether it is a smartphone or other mobile device can be used to access your VPS so that you trade any time you want and from anywhere.
Guaranteed access to your trading platform. Some people may find themselves unable to trade due to power outages and other factors that render their desktop computers incapable of serving as devices from which to trade. With a VPS, you are assured of access to your trading platform since the VPS providers have mechanisms in place to keep your virtual desktop accessible to you whenever you need it.
Minimal slippage. Forex prices can change in milliseconds, and any delay to execute a buy or sell order may result in a different price being locked in. To avoid the effects of such delays in execution, trading brokers try to reduce the latency of their trading platform. VPS providers can be your ally in minimizing slippage since they do everything possible to keep latency low while also providing high internet speeds.
Added security. Trading using VPS usually comes with better security for your personal and trading information. However, the degree of security provided varies from one provider to another, so it is in your best interest to ask around and identify the VPS provider with the best security systems in place.
Greater efficiency. A VPS can allow you to use trading tools that are hosted on different operating systems, such as Windows OS and iOS. In this way, you will not be constrained by the limitations of your physical desktop when you are trying to use a variety of trading tools or software. Expert Advisors (EAs) or trading bots are also very sensitive to connectivity disruptions in their analysis. If there is a power disruption or the connectivity isn’t so great, the EA can return an invalid result. Trading using VPS removes such risks are ensures you will get seamless service from your trading bots.
Factors to consider when choosing a forex VPS
Managed or unmanaged? If you are technically capable, you can choose an unmanaged VPS so that you take care of tasks like patches, updating the server, and other backroom tasks. However, not everyone is equipped with this technical knowledge or is willing to take on the additional work. In such a case, a managed VPS is the better option.
Server location. VPS providers normally have servers located in different states, countries and even continents. It is normally advisable for you to select a provider whose servers are located near you so that you can enjoy better speeds. However, due to security considerations, some people may be more comfortable with a server from a distant location. Whatever your specific reasons, be mindful about location when choosing a VPS provider.
The RAM. Random Access Memory is an important parameter when trading using VPS. This is because the bigger the RAM, the more tasks the VPS can perform effortlessly. This is particularly important if you use several bots or other software to ease your trading.
Bandwidth. Before choosing a forex VPS plan, consider the bandwidth allowance for each of the options before you. You want as much bandwidth as you can get while also keeping in mind that getting too much would be expensive without adding any value to your trading. Go for 10 MB/s for a start and opt for a superior bandwidth if this isn’t sufficient for your trading needs.
Flexibility. Your operating system requirements may vary from time to time, so you want a VPS provider who can allow you to use different operating systems on your virtual computer should the need arise.
In summary, trading using VPS can take the efficiency of your trading activities to a whole new level. However, a VPS on its own will not make you a better trader, so invest in improving your forex trading skills. This improvement will allow you to reap the full benefits of having a VPS.
High-Risk Investment Warning: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial adviser if you have any doubts.