Between 54-87% of retail CFD accounts lose money. Based on 69 brokers who display this data.
VPS stands for Virtual Private Server. A VPS enable traders to execute trades at much quicker speeds, as well as providing the security benefits of a server which is owned and operated by a large corporation. The use of virtual private servers also to allows traders to run forex software on a server which has continuous service so that trading can go on round the clock. This makes the use of a VPS perfect for traders who use of expert advisor (EA) software, which enables traders to automate the execution of many trading and analytical processes.
In a technical context, a lot of what happens in the forex market is packaged and sent out as data, be it news feeds, price feeds or transmissions of trade orders. Just as it takes time for you to travel from one town to another, it also takes time for data feeds to transit from point A to point B; in this case from the trader’s computer to the broker’s server and back. This time delay is what is known in forex as latency. Latency is measured in milliseconds. The lower the latency period, the faster the trader can get price feeds and get trades executed.
Latency is a phenomenon that is a constant in forex. Latency always exists, because simple physics dictates that it must take time for data feeds to travel from trading stations across the world to the broker’s servers. With forex trading, faster is better and the challenge has always been how to reduce the amount of time that data feeds travel between trading stations and servers so that faster executions of trade orders are attained.
Institutional traders invest millions of dollars in building the fastest fibre-optic transmission cables to carry their data to and from the servers of the exchanges where they trade. On top of that, some will have thier offices in the same building as the exchanges to further reduce the distance their order requests must travel before they are executed. Retail traders in forex do not have the luxury of such resources. As such, their best bet is to host their software on servers that are in close proximity to the broker’s servers to improve their trade execution times and reduce the likelihood of requotes. This is where the forex VPS comes in. Brokers will offer a VPS server usually in close proximity to their servers which their traders can access to run their trading software to execute their trades.
The process of using a forex VPS starts with subscribing to a VPS plan from a provider. Each plan has its specific features when it comes to number of CPU cores, the bandwidth (RAM) and the storage space. There are hundreds of VPS providers available but a simpler option is to find a broker that offer their traders VPS technology. Some brokers will even offer a free VPS account for traders that meet certain requirements, like having a live forex trading account with that broker. This should also make it easier to find a VPS that is acutally located close to the brokers own servers.
Installing programs on your Forex VPS is exactly like installing them on a normal PC running Windows. Simply use the pre-installed web browsers (Chrome or Internet Explorer), to navigate to the software download, then run the .exe or install file, and follow the prompts to install the software. All default settings and locations will be appropriate.
If you are using a broker’s VPS server, make sure it is one which can serve your needs. The most important factor to watch out for is stability and uptime. A stable VPS connection is one which is not affected by activities of other users.
Step 1: Find a broker that offer VPS. The broker will then send you BDP files from the broker to attach to the local computer. Download your broker’s RDP and save the files to the desktop of your local computer.
Step 2: Launch the forex VPS application by clicking on the remote desktop (RDP) icon on your desktop. This will attempt to launch the remote desktop application, which connects your local computer to your forex VPS.
Step 3: In the next pop-up window which shows, enter the admin username and other details provided by your broker.
This should connect you to the remote desktop which is where your broker has hosted the MT4 client and the forex VPS.
Trading with a VPS has several advantages.
a) Traders are able to run EAs on their trading platforms 24/7 and capture more trade opportunities than they would have running the EA from a local computer. If the trader is renting an EA and pays a monthly subscription, then it would make all the sense in the world to get the EA to do more work.
b) Using a forex VPS removes the element of computer crashes and network disconnections, which can be a major distraction for the trader.
c) Using a forex VPS to run your EA will mean your trades will run even if you do not have access to your computer, this is why traders who cannot constantly monitor their trades could benefit from using a VPS system
d) A forex VPS hosted adjacent to the broker’s servers reduces the distance your trade orders need to travel decreasing the chance of slippage and latency issues.
e) Security is another element of forex VPS trading. Using EAs and add-ons on a VPS removes the possibility of local computers being infected by malware and other malicious programs that may have been encoded into a forex EA or add-on. Since forex VPS systems are built with innate anti-malware and antivirus software, they can take care of these threats without a problem.
f) Using a forex VPS will can reduce but not eliminate slippage by improving the speed your trades are executed at.
We end this article with a caveat. Using a forex VPS does not replace the skill or accuracy of a forex trading robot. The robot still has to deliver on performance and returns. The forex VPS is simply there to facilitate its function and not affect the strategy on which the EA was programmed.
Pepperstone is a Forex broker which has been operating online since 2010. It is regulated by the ASIC and has offices in numerous countries including the United States, China, Ukraine and Australia. Pepperstone also provides a VPS service that is designed to be used with the popular Meta Trader 4 trading system.
Additionally, expert advisers are encouraged to be used. It should be kept in mind that Meta Trader 4 is available for demo accounts as well (although it will expire after 30 days of activation). 31 currency pairs are offered alongside precious metals (gold and silver). Two types of accounts are available. These are the “Standard” and the “Razor”. While a minimum account size of $200 dollars is necessary, the fact that spreads as low as one pip are available allows Pepperstone to be an extremely attractive option for those who wish to trade in anonymity.
While offices are found in the United States, the platform is not currently available to traders within the United States. However, a dedicated foreign VPS system could possible circumvent this challenge.
XM is one of the most diverse and robust Forex brokers currently available. One of the reasons for such fame is the flexibility which is offered.
XM.com has provided VPS solutions within their Meta Trader 4 system since the autumn of 2013 and EA services are likewise allowed. There are more than a dozen electronic payment options provided (PayPayl is not included) and XM is said to host one of the most helpful customer service centres on the market.
Four different account types are available and Islamic trading is supported. Forex, CFDs, oil and precious metals are all trading instruments while leverages of up to 1:888 have allowed many to enjoy handsome profits (not without a certain level of risk, of course).
Variable spreads are offered and scalping is allowed for those who wish to enjoy short-term trading opportunities. Mobile, automated and one-click trades are supported. Finally, XM.com offers Meta Trader 4 with their demo account and there is no expiration period.
You can learn more about XM in our review of their platform here.
ThinkMarkets scored best in our review of the top brokers for vps, which takes into account 120+ factors across eight categories. Here are some areas where ThinkMarkets scored highly in:
ThinkMarkets offers two ways to tradeForex, CFDs. If you wanted to trade EURUSD
The two most important categories in our rating system are the cost of trading and the broker’s trust score. To calculate a broker’s trust score, we take into account a range of factors, including their regulation history, years in business, liquidity provider etc.
ThinkMarkets have a B trust score, which is good. This is largely down to them being regulated by Financial Conduct Authority and ASIC, segregating client funds, being segregating client funds, being established for over 8
|Regulated by||Financial Conduct Authority and ASIC|
|Uses tier 1 banks|
|Segregates client funds|
Want to see how ThinkMarkets? We’ve compared their spreads, features, and key information below.
|USD/JPY Spread||0.10||DAX Spread|
|FTSE 100 Spread||N/A|
|Platform||MT4, Mac, Web Trader, Tablet & Mobile apps|
|Base currency options||USD, GBP, EUR, CHF, JPY, SGD, AUD, CAD, NZD, CNH|
|Funding options||Payoneer, Credit cards, Bank transfer, Neteller, BPAY, UnionPay, FasaPay, DebitCard,|
Between 54-87% of retail CFD accounts lose money. Based on 69 brokers who display this data.