So you finally learned what Forex is and decided to make some money trading currencies. That’s great! If you have a day job or a busy life then most probably you won’t be sitting at your computer or Smartphone all day following the markets and making trades manually. Hopefully you already know what an Expert advisor is, and you just might have one at your hands: either you developed it yourself, hired someone to do it for you, found a free one on the Internet (or at DadForex.com 🙂 ) or bought it. Now you have two options: run the expert advisor from your home on your very own computer, or rent a VPS (Virtual Private Server). Let’s now discuss these two possibilities.
Running expert advisor from home computer.
There is nothing wrong in having Metatrader or other trading platform running 24 hours per day 5 days a week (that is when Forex market is open) on your home PC and letting expert advisor do the trading for you. Most beginner traders are doing that (and I did it too 🙂 ). But either they are trading on demo accounts (with fake money) or they didn’t have that terrible experience when they lost connection to their real trading account and lost real money because of that.
When I first started trading with automated trading tools I also used my own computer. I thought to myself: what could go wrong? I have a fast computer, I have optical Internet connection (1 Gbps), my electricity bills are rather small and I don’t have to pay any extra money for any server. So I slept peacefully at night until one morning I woke up to find that my computer restarted during the night because of some stupid Windows automatic update. Obviously I had to restart Metatrader, close my losing trades and set the expert advisor to trade again. Only after that I found out how to configure Windows to do automatic updates during weekends when Forex market is closed. I thought I was safe again. But I was wrong… again.
After a month there was some big storm in my town and lightning damaged electrical station in the neighborhood. This happened on a weekday afternoon when there usually are large movements in the currency prices. Although my laptop was then working on a battery, I lost my Internet connection (routers don’t have batteries). So I could not close any open trades, and my expert advisor was doing nothing. Boy that was some nervous hours before I got electricity back. The same evening I went and rented a VPS.
So what is a VPS (Virtual Private Server)?
To explain in simple words VPS or Virtual Private Server is a computer located in a Data Center. These servers may be used for many purposes like hosting websites, apps, storing data, etc. But when we talk about VPS for Forex, it is usually a Windows computer located in the same or very close to the Data Centers that are used by Forex brokers. These centers usually have a local power back-up in case of public electricity outage and several Internet providers so that they are always online.
Using VPS for trading Forex
There is a common myth that VPS is mostly needed for expert advisors that are very sensitive to trading speed: either scalping or HFT (High-Frequency Trading). But I would say this is not true. Trade execution speed is very important for any type of trading: scalping, swing trading, position trading, day trading, algorithmic trading or news-driven trading. As you probably know Forex is a very dynamic market. Currency prices may change tens or even hundreds of pips in a matter of seconds. So having the opportunity to save even part of the second when placing a trade means you may earn extra money (buy lower or sell higher) or even have a winning trade instead of the losing one (every pip counts when you hit a stop-loss or take-profit target). This will easily cover the cost you have to pay for VPS.
And based on my own experience, I can say that you will not have to worry about power outages, loss of Internet connection, computer updates or even crashes. So if you are using expert advisor for trading and you still don’t have a VPS, go and get one today. This will save you money and give you peace of mind.
Which Forex VPS to use?
There are several good VPS providers, but I would recommend the one that I am using for a long time with no problems at all. It’s Forexvps.net. As the name says, this company was created with Forex traders in mind. They have servers in New York, London, Amsterdam, Zurich, Tokyo and Singapore which are the main financial cities of the world. No matter which broker you are using, they have a list of more than 100 brokers and will recommend which location to choose for your server so that connection between your trading platform (i.e. Metatrader) and broker server would be minimal. In fact most of the connections between Forexvps.net servers and broker servers have latency of 1ms (1/1000th of a second). My home computer with a very fast Internet connection shows latency of 120ms to my broker. So you see the difference is huge.
When you order a server you simply pay a monthly fee. You don’t have any contract, so if for some reason you will not use their services any more, you may cancel your server any time without any fee or penalty.