What is Forex VPS Hosting?

A virtual private server (“VPS”) is a form of web hosting, which uses data centre facilities to allow businesses to locate physical hardware to provide a direct ISP connection, with Forex VPS data centres or professional computer-server facilities providing the ability for trading entities to host their trading software for 24 hour operations.

VPS hosting has been developed to make the best of both worlds, the most favourable components of shared hosting and dedicated hosting services, placing the website on a server that also has other sites running on it, the only difference being that there are few sites per server. Technology known as virtualization is used to compartmentalize a VPS centre.

Each of the sites share the running costs of the server, either monthly or annually, with the costs considerably lower than that of a dedicated hosting site.

Virtual private servers are different from shared hosting in that your site won’t share resources with neighbouring sites, each site being a partitioned server area with its own operating system, storage, RAM and monthly data transfer limits, thus providing smoother and more stable site performance.

How Does FOREX VPS Work?

Institutional traders pay sizeable fees to site their trading engines in close proximity to the trading engines where they derive their news trades. The majority of retail traders are not able to afford the fees that institutional traders pay, which has led to increased demand in forex VPS services, which provide access to equivalent advanced facilities for 24-hour trading at significantly lower costs than a co-located facility. Retail traders also benefiting from a host site providing the necessary stability, accuracy and speed required for trading software used today.

The standard setup for a trader would be with a local computer connected to the internet for the trading station, normally MT4, to run and trade. An expert advisor (EA) attached to the trader’s computer requires the internet connection to trade. With VPS, the forex VPS bypasses the issue of the trader having to be connected to the internet, the forex VPS set up to relay data and trade orders to the Broker’s MT4 server.

MetaTrader4, more commonly known as MT4 is an electronic trading platform most frequently used by retail forex traders. The software is licensed to FX brokers who in turn provide the software to their clients, the software used to see live streaming prices and charts as well as to execute trades and manage accounts.

Alternatives to MT4 include cTrader and Protrader.

  • cTrader’s web trading platform is identical to its desktop application and comes with an array of features, with a trading experience considered superior to that of MT4. cTrader is more commonly used by smaller FX/CFD brokers.
  • Protrader is an MT4 alternative for multi-asset brokers and banking institutions, which provides the broker with plenty of scope for customization to address broker operational needs as well as meeting the needs of clients.

MetaTrader4 may be the most widely used platform, but with infrequent updates and inflexibility, other platforms are beginning to gain popularity, particularly as traders become more particular on platform needs.

Why is FOREX VPS Right For You?

Reasons for considering trading on a VPS instead of on your own computer directly would include:

  • You can connect to your platform from anywhere with a network connection, including internet cafes, allowing you the flexibility to trade anywhere, anytime.
  • When trading is automated, trades can continue even with power outages, which is particularly useful when an automated system does not require monitoring.
  • Trades can be executed while your computer is switched off.
  • VPS systems offer some of the most robust levels of security, with managed VPS servers being checked frequently to ensure that they are functioning with most service providers guaranteeing 99.9% uptime, with antivirus and other software also provided to ensure that your system is as protected as possible.
  • A VPS can execute all your trades more quickly than your computer because it is significantly faster in transmitting orders, reducing delays and slippage, slippage known to increase losses and unpredictability.

Key Considerations in Selecting a Forex VPS 

  • Performance: Most forex VPS use virtualization technology, allowing the forex VPS service provider to compartmentalize and split their resources amongst a number of users, the issue being a user with a high workload could impact performance for other user compartments, virtualization being done at an operating system level and not hardware level. Reduced uptime and speed could lead to increased latency.
  • Hyper-V technology is for users on forex VPS that run on Microsoft Windows Servers, with OpenVZ being for users that run on Linux, these being the only two configurations that ensure the required degree of operational stability.
  • Flexibility in Hosting Plans: There should be a range of plans available for traders to be able to make a choice that caters for individual needs.
  • Location of VPS/Broker’s ServerIt is important to select a forex VPS which is co-located with your broker’s server as the latency period is reduced where the VPS is co-located with the broker’s server. This, in fact, maybe the most important consideration.
  • Uptime: a VPS should provide at least 99.99% uptime, which requires a VPS provider to have significant redundancy in the system, which allows the VPS provider to have the necessary system resources to effectively shift users to another compartment if there is downtime in a particular compartment.
  • Accept a Range of Applications: The forex VPS provider needs to be able to accept all types of forex software and applications, as well as enabling the user to enhance software as and when required.

VPS is certainly not for everyone, but if trades are automated or there are limited resources for placing trades, forex VPS makes sense.

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