Forex trading seems to never go out of style. With cryptocurrencies increasing in popularity, Forex still remains a solid way to make money. But how to maximize the results of your work?
One of the best solutions is to upgrade the approaches. This will automatically improve your performance. Some buy faster computers and Internet connections, others try to locate their hardware close to the main exchange computer servers.
The first one is very costly, the second one is, to say the least, troublesome. And if you’re not a firm representative and an enthusiastic trader, what to do?
The one answer is investing in a VPS. It will help achieve lower latency and improve trade performance, catch increasing PIPs, and make money. Does any of this sound familiar to you? If not, let’s learn the terms. Then, we’ll guide you through a topic of why VPS is a solid solution for better trading performance.
The Needed Terminology: PIPs, Low Latency, VPS
To make sure even beginners understand the article, let’s learn some of the terms we’ll be using here. We’ll talk about the benefits of Forex VPS for the performance of your trading strategies. The approach is proven to achieve lower latency and getting more PIPs as a result, making better deals.
What Is a PIP?
A PIP (percentage in point or price interest point) is the tiniest considered change in a rate within a currency pair. It’s 1/10,000th, 1/100th of 1%, one basis point, or $0.0001 if the pair contains the US dollar (which is the same number interpreted differently).
This is a standard point of change in Forex, which was introduced to make sure there are no misunderstandings and huge losses when it comes to rate change. Imagine if the pip was 5 or 10 basis points. The slightest change would mean dramatic gains and losses and high volatility, which isn’t good in this case.
These basis points are small yet important. The more you invest, the more crucial they are for you.
What Is Latency?
Latency is the time period in which a signal travels to the recipient. The lower latency is, the higher the speed of the signal. To achieve that, you need fast hardware and/or a close location to the source of the signal.
It allows traders to make decisions upon market changes that others haven’t seen yet. The privilege is a matter of milliseconds, but high-frequency traders manage to harness that time period to use it to their advantage.
Low latency can improve your trading performance by thousands or millions, depending on the sums of money you’re working with, the quality and speed of your hardware and connection, and its location.
What Is Co-Location?
Co-location is an approach many HFT (high-frequency trading) companies and traders are using to lower the latency. They try to locate their computers as close to the main servers of the exchange as possible. As you can imagine, it’s quite crowded out there.
It’s also earning profit for the exchanges because now they charge enormous prices for this low latency access. Do such expenses make sense? For the big players, yes. They can pay a million for the privilege and get a hundred times more from a quicker signal catch.
If you’re a smaller player or a beginner, there’s no way this approach is lucrative for you. But there is a nice alternative.
What Is VPS?
A virtual private server is basically a virtual computer you can access from any device. Compared to host servers for websites that contain all the data, content, images, videos, etc. from all pages. VPS, in its turn, hosts a copy of your computer. You can already feel the scope, right?
They come in all sizes, capacities, and from various locations. All those are important factors of choice if you’re a Forex trader.
Why VPS Is Beneficial for Certain Trading Strategies
Basically, the best Forex VPS will provide an advantage in location and speed but without you paying millions of dollars for co-location or other privileges.
There are numerous advantages to using a VPS for trading strategies:
- The speed.
Get the fastest server and receive signals earlier than competitors. Every click will be processed faster, which will give you time to make correct, quick decisions.
- The access.
Remote access from any part of the world and any device makes sure you can trade from anywhere. Drinking coffee in an airport or lying on a sandy beach, you can access the exchange anytime and make a deal that will earn you thousands at least.
- The savings.
You don’t need to have a machine on 24/7 since the virtual server is on at all times. This saves on electricity bills and spendings on the repair and purchase of new computers. Your time-saving abilities increase dramatically because you don’t need to be in front of the computer all the time waiting for the markets to open.
- The stability.
Decent VPS providers guarantee a constant power supply. This means when there’s a power outage where you are, the system will be still up and running, no matter if you have an Internet connection or not.
- The security.
Reliable providers offer sophisticated security, which means all the data in your trader account is secured. It’s not shared hosting where you may have suspicious ‘neighbors’ and worry about the safety of data all the time.
Faster trade performance, lower latency, fewer errors and delays, high levels of security, and more are waiting for every trader looking for a high-quality virtual private server.
Choose the Fastest, Best-Located VPS for Forex Trading
Invest time in research and choose the best VPS for Forex trading. It should have the right location, speed, capacity, and additional features we’ve described above. Such an investment will be completely justified with the first couple of deals you’ll be able to make without the fear of power outages, inconsistent Internet connection, or laptop failure.
When in doubt, consult the provider on the best type of server for your goals.