3 Reasons to Use a Forex VPS for Your Trading
Education - AxiTrader Team | 15 Jan 2019
Automation and efficiency have become two of the most important aspects of modern trading. To be a successful trader you need to think about how to incorporate these things into your strategy, starting by having the right technology mix.
It wasn’t too long ago that the only viable way to make the most of automation in trading was to sit down and create your own dedicated software. If you wanted something to automatically analyse the markets and place a trade, you’d need a lot of time and background knowledge in areas like computer science, mathematics, software coding – specialist skills that are beyond most traders, especially beginners.
As in most industries, things have changed a lot. It’s now very easy to access a suite of technology that covers all the most important trading tasks. You can download MT4 as your one-stop trading platform. You can use a tool like PsyQuation to help with analysis. You can take your pick of thousands of Expert Advisors (EAs) to automate your trading in ways specific to your goals. It’s getting easier to get machines to do the hard work, leaving you free to do the fun part of finding trading opportunities (although you can automate that too…).
If there’s one important aspect of trading technology that doesn’t get as much as attention as it deserves, it’s the VPS.
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? 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.
A VPS keeps you connected and lets you keep trading, giving you safety and security against unforeseen failures in the system.
Why use a VPS?
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.
The essential component in Mechanical Forex systems
There are two common types of trading system:
- Discretionary trading is an “old school” style of trading where you do things manually, including evaluating your buy and sell decisions or manually entering stop loss and take profit alerts. While a lot of traders still use some aspect of discretionary trading, the trend is increasingly moving towards the Mechanical trading model.
- Mechanical trading systems are highly automated. You use EAs to do the bulk of the work for you, so you don’t need to be in front of a screen monitoring or placing trades. In this model, a VPS is an essential part of your system as it gives your the assurance that your automated trades will stay connected to the network and continue to function.
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 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 ‘OK’ button to confirm a trade and the moment your trade is received in marketplace.
The online world may seem instant, but everything takes some time. A VPS 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 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 so you can concentrate on building a path to being a successful trader.
AxiTrader has several MT4 Forex VPS Hosting solutions for you to choose from. Click here to find out more.
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