What is Forex VPS and how to use it?

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 trading strategy, starting by having the right technology mix.

That is where forex VPS hosting comes into play.

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 beginner traders.

As in most industries, things have changed quite a lot. It’s now very easy to access a suite of technology and trading platforms that cover all the most important tasks in the trading journey.

Start with Metatrader 4 as your complete trading platform.

Finally, forex traders can take a pick of thousands of Expert Advisors (EAs) to automate their trading in specific ways focused on achieving the goal set out in their trading plan.

It’s getting easier to get machines to do the hard work, leaving you free to do the fun part like finding the trading opportunities (although you can automate that too!).

If there’s one important aspect of trading technology that doesn’t get as much attention as it deserves, it’s VPS trading.

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 that leads to loss of your internet connection? 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.

Forex VPS hosting keeps you connected and lets you keep trading, giving you safety and security against unforeseen failures in the system. It is not only an automation tool, but can also be seen as a component of a trader´s risk management strategy.

How does forex VPS work?

Breaking it down in simple terms, forex VPS really is just a cloud-based desktop PC.

A VPS can host a version of an OS (operating system) that can be remotely controlled from basically any other device that is within reach. This is somewhat similar to web hosting servers, except that with the added capability of directly hosting your desktop computer while still being able to function independently as if it were on its own server (think renting out a room in someone’s house).

Although several VPS are created on one computer, they each have their own set amount of CPU power and space so you’re guaranteed on what you need and signed up for every month.

The forex VPS works as a SaaS, where you pay a monthly subscription cost for access to a VPS hosting service from a provider. Continue reading to discover some leading third-party VPS providers.

Why should I use a forex VPS?

The benefits of a Virtual Private Server (VPS) for automated trading include continuous internet connection and faster execution speed. VPS services are powerful, offering CPU speeds up to 20% higher than comparable servers because they have more RAM available to run processes in parallel while minimising usage spikes from other clients on the same server.

Some other important features about forex VPS hosting include:

Backups

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.

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 the 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 button to confirm the trade and the moment the trade is received and completed.

The online world may seem instant, but everything takes some time. A major advantage of using a VPS is that it 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 online 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 and reduce your level of risk so you can concentrate on building a path to being a successful trader.

Essential components in Mechanical Forex systems

There are two common types of trading systems:

Discretionary trading: 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: Mechanical trading systems are highly automated. You use EAs to do the bulk of the work for you, so retail traders 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 you the assurance that your automated trades will stay connected to the network and continue to function.

What to consider when choosing a forex VPS?

Here are some key aspects to consider when choosing a forex VPS hosting service:

• Minimal latency – Less latency will lead to faster execution and improve the chances of an order being filled as soon as possible.

• Safety – The best VPS providers will ensure your data security and network security – including setting up a server firewall – and all for a reasonable price.

• Flexibility – Traders might use different operating systems, so it is important to check if the VPS provider of your choice supports it. The provider should also have data centers in multiple locations worldwide, so you can pick one in close proximity.

• Support – A good VPS provider will have adequate technical support – which includes promptly replying to support requests and is able to resolve technical difficulties, complimentary backups, server monitoring and integration with third-party tools.

What is the best forex VPS hosting service to use?

CMG has partnered with leading third-party VPS hosting providers, and are proud to offer the following to our clients:

How to use forex VPS hosting with CMG?

Simply sign up with one of our listed VPS partners. For more information click the link below: