Virtual Private Servers (VPS) for Forex Trading
For years now, virtual hosting has only been heard of in relation to the hosting of websites. But, virtualisation has started playing a major role in the financial markets too. Virtual Private Servers (VPS) make financial applications safer and more efficient, allowing users to enjoy benefits like greater privacy, customisation ability and dedicated resources.
The proliferation of VPS technology across various industry verticals has been credited for significant market growth forecasts. According to research by Market Research Future, the global VPS market is expected to grow at a CAGR of 15%, reaching a size of US$7,181.3 million by 2024.
Forex trading via VPS has recently gained much popularity among retail trading communities. There is a large segment of retail traders who are unable to pay the hefty fees, unlike institutional traders, who are able to set up their trading engines in close proximity to servers, from where they get exclusive information.
Hence, the demand for forex VPS services have risen, providing similar advanced trading options, 24-hours a day, at significantly lower costs than co-located facilities.
How Does VPS Work in Forex Trading?
When a forex VPS hosting service is set up, the trader gets allocated an IP address, along with a username and password, to gain access to the system. A programme, called “Remote Desktop Connection,” is provided for a Windows-based operating system, which can simply be accessed using the start menu button. After the login details are entered, traders can access a “virtual desktop,” where they can download the MT4 platform or simply upload Expert Advisors (EAs) to the VPS.
Traders gain huge control over the PC, VPS connection with EAs and the broker’s MT4 server, none of which requires 24/7 uptime at the trader’s end. The installed EAs will send orders to the MT4 servers autonomously, which means that network uptimes are maintained through the day, regardless of whether the trader’s computer is on or linked to an internet connection.
Advantages for Forex Traders
Trading in the fast-paced forex markets requires greater stability and faster connectivity than any other financial instrument, and this is where virtual hosting offers multiple benefits. VPS provides traders with a complete virtual Windows desktop that they can access and use from anywhere in the world, round the clock, allowing them to maintain connectivity with their trades at all times. Traders can access their VPS systems on mobile devices as well, providing a high degree of flexibility to them.
Those who opt for automated trading can continue to trade even during power outages. The system can continue to trade 24/7, without them monitoring it. Moreover, forex VPS systems are stable and reliable platforms to launch an automated trading strategy.
The hosted servers will be continuously monitored to ensure continuity of operations. This means lesser chances of missing out on trading opportunities and consistently high execution speeds. Faster execution speed means lesser chances of slippage, which is a major advantage for those who do not use Expert Advisors.
VPS hosting enhances security in trading too, by removing all loopholes for disasters. Since such servers are monitored continuously by a dedicated community, all network upkeep activities and antivirus installations are kept updated. There are fewer chances of system errors, crashes and hacking.
Virtual Private Servers also offer a high degree of customisation to traders. Once accessed from a remote connection, the system can be configured according to the requirements of the trader.
In short, network downtimes, power supply disruptions, system crashes or faulty connections cannot affect a trader’s positions. Unlike shared hosting, Virtual Private Servers don’t involve sites sharing resources with neighbouring sites. Each site acts as a partitioned server area, with its own operating system, monthly data limits and storage space, enabling smoother and more stable trade performance.
Things to Consider While Choosing a Forex VPS System
A system that allows traders such a high degree of efficiency, security and flexibility can be expensive, which is why it is necessary to look into certain parametres while choosing the right plan.
1. Performance
Forex VPS service providers are able to split their resources among a number of users, due to virtualisation technology. But the high workloads of certain traders can impact the performance of the system for others. So, ensure that you choose a system that guarantees at least 99.9% uptime. The service provider should have the necessary resources to shift traders to another compartment, when a particular one is experiencing downtime.
2. Location of the Broker’s Server
It is essential to choose a service provider that is located close to your broker’s server, to minimise network latency. The network latency should ideally be below 5 milliseconds.
3. Variety of Plans to Choose From
Choose the plan that caters to your specific needs the best. Your provider should be able to help you with multiple subscription options. Also, the VPS service provider should be comfortable with all types of forex applications and software, along with all kinds of trading styles, including automated trading strategies.
4. Regulated Broker
Support from a regulated forex broker makes the process streamlined and faster. Also, you will get dedicated customer service facilities round the clock, to address all your queries. Check for online reviews and the website of the broker for their track record.
5. Industry Leading Trading Platforms
Reputed forex brokers will allow you to access industry leading trading platforms like MT4 and MT5 on VPS servers. Not only do these platforms ensure cutting-edge technology and vast technical analysis tools, they also offer facilities to trade with Expert Advisors or Trading Robots. In fact, programming languages like MQL4 and MQL5 are developer-friendly, allowing traders to create their own automated trading strategies and custom indicators.
Forex VPS servers are most useful when traders are running EAs, to manage the market positions on their behalf. If you are using an EA for your strategy execution, make sure you back-test it using a “strategy tester” on your platform, to test for efficiency.
