PowerFlow Forex Expert Advisor

How to Choose a Forex VPS Provider

By Alexander
In Forex Basics
Mar 23rd, 2012
14 Comments
1937 Views

If you are looking for a Virtual Private Server (VPS) to let you improve your trading, then there are four things to look out for when choosing a provider. They are latency, quality, support and price – and that’s in order of priority, with price being the lowest. Why? Read on!

Latency

As I described in previous article “4 reasons why you should use a VPS for Forex trading“, apart from making the right trading decisions (your responsibility!), a big factor affecting profits is latency, which is a measure of the speed at which those decisions are executed. By choosing a VPS with the lowest latency and therefore the highest speed of transmission of your orders to your broker’s trading system, you have the best chance of avoiding slippage and loss of profits.

Forex VPS providers

The first point to check is how close a VPS is physically to your broker’s server. The closer it is, the lower latency will be. In other words, don’t choose a VPS in New York if your broker’s server is located in Europe.

You will also want to put a figure on the latency of different installations, so that you can compare. There are typically two options for this:

  1. Use the “looking glass” tool that some providers offer on their websites, so that you can try before you buy. Enter the network (IP) address of your broker’s server to see what the latency is in milliseconds. Ask your broker for this address, and make sure that you get the one for the real trading system, not the demo system that may be housed elsewhere.
  2. Ask the VPS provider to run a “ping” test to the IP address of your broker’s server. This is a standard network test that gives a figure for latency – it’s also the basis of the “looking glass” tool above. At the same time, you can also ask the provider for “trace route” information to see how many network nodes or “hops” are in the path between the two servers. The fewer systems in between, the better.

How do you interpret the figures for latency? For comparing between providers, there’s no problem: the lowest latency wins. In absolute terms, use the following scale (where “ms” stands for milliseconds):

  • Below 1ms is superb
  • Below 5ms is excellent
  • Below 10ms is good
  • Below 20ms is acceptable
  • Above 50ms is not recommended for short term trading systems

Quality

Naturally, the VPS also has to run without interruption and be free from operating problems. Factors to take into consideration are:

  • Hardware quality and power. Not only must the provider offer reliable, fast servers, but also enough system resources such as main memory. For example, 1 GB of RAM is a minimum when you run 3 or more MT4 terminals.
  • Operating system. With a choice often between Windows Server 2003 and Windows Server 2008, the earlier 2003 version is more stable (stays up longer) and needs fewer system resources (runs faster).
  • Power, cooling and security. Uninterruptible power supplies are best for both servers and cooling systems, with the right levels of security to prevent physical or data breaches.
  • Data backup. Find out how frequently they are done, how securely they are kept, and how rapidly data can be restored to a machine from a backup if required.

Support

Murphy’s Law says that something, somewhere, will go wrong. To fix problems, a VPS provider must offer you a support service that is competent, available and responsive. Remember that a 99% level of systems availability may sound good until you realize that you could lose more than three full trading days in a year!

As support is often something you only experience when a problem arises, it may be more difficult to gauge the quality of a provider’s service here. However, you can try the following: ask a technical question to the provider’s support team to see how well and how fast you get an answer; and/or visit online forums hosting discussions on this kind of subject to see if any providers have attracted specific comments about their level of service.

Price

When you have checked out the points above, then finally, you can look at price. Yes, for the group of providers that satisfy all your other criteria of latency, quality and support, then you can use price as the final deciding factor. But don’t use price as a starting point when looking at Forex VPS providers – cheap, poor quality installations will end up costing you far more in profits than you can ever save in hosting fees.

Okay, that’s it for today. I hope you liked today’s blog post. If so, please don’t forget to share it with other Forex traders.

Last but not the least, here are two Forex VPS providers I use for trading. Both providers  offer high-quality services and great support.

They are:

  • ForexVPS with servers in Atlanta, GA
  • CNS (Commercial Network Services) with servers located in San Diego, New York City and London.
  • BeeksFX that runs its servers in London and New York City.

PS: Have something to add? Comments are welcome too.

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14 Responses to “How to Choose a Forex VPS Provider”

  1. simon says:

    Many brokers are now promoting Gallant VPS as their first choice in server technology; traders may want to inquire with their broker and see if they qualify.

    • Alexander says:

      Dear Simon,

      Promotion is one thing, but personal feedback is a completely another story. It will be great if your VPS proves the quality for ordinary traders.

  2. It depends what service (ie software on teh server) you are communicating with.

    Ping measures the basic latency between servers. If you are running a dedicated program to handle your investments that is driven by the socket, that may be right but if you are using some web-based dynamic program you need at least to use httping which gives the latency plus the time it takes to buiild the page. Then there is the web server (as opposed to the architecture) and of course the speed and memory of the VPS itself. There’s a lot on server performance. And of course you need to know that your service provider will not short-change you on upstream bandwidth or at a critical moment, you may suffer from contention issues. The list could go on….!

    • Alexander says:

      Hello John,

      Thank you for your opinion.
      Of course, the list could go on. However, I mentioned 4 crucial things that have to be checked in any case.

  3. Alexander – sure there are lots of things which are important and your other three crucial things are key general areas.

    Where it comes to the technology it isn’t just the latency that is important, particularly on a VPS which is in some way shared with other hosts. I know latency is important if you want to nab that deal before anyone else (after all trading firms spend a great deal on buying the bandwidth) but how the server is configured, memory, cores can have an effect.

    In web serving, much time can be spent waiting for apache to serve you so if that is the case, consider using nginx, lightspeed or lighttpd which are all quite a bit faster.

    All these have to be good as well as your own desk communications with your VPS.

    Fun isn’t it? Not that I am forex trading myself but it is an interesting topic…… Thought I’d add my $0.02!

    • Alexander says:

      John, you are absolutely right.

      However, most of the traders don’t know what is apache or nginx. It’s too complicated for ordinary trader or VPS user.
      That is why I have mentioned only “the easiest for understanding” factors that matter.

  4. Greg Watson says:

    Hi Alex,

    What is the best OS to support Thor II with the lowest order modification time on a VPS? What is the required amount of RAM?

    Thanks

    • Alexander says:

      Dear Greg,

      If you use your VPS/VDS only for running your MT4 terminal(s) (as you should), Windows 2003 is recommended.
      If you are going to use up to 3 terminals, you need to have 1GB RAM or more.
      Keep in mind that the more terminals you run, the more RAM you need.

      • Greg Watson says:

        Hi Alex,

        Thanks.

        Went with Win 2003 on a CNS VPS hooked in the same building to AxiTrader / Integral’s NY4 server. Got 1ms ping time and 30 secs to do 100 x MT4 buy limit order price mods running on a Live account.

        Time to see how Thor II runs in this environment……

  5. Marc says:

    Hello,
    It seems to be a wrong. Try to avoid VPS in all circumstances. For best returns from the hosting company, VPS are oversold (too much partition on the disk as on the CPU) This brings High NP pool usage and the system crash. I have had multiple bad experience with trading via VPS. Better go to dedicated servers. This is a dedicated hardware reserved for you, little bit more expensive but then you will be able to trade stress free…

    • Alexander says:

      Hello Marc,

      Thanks for your point of view on this topic. VDS is a great option for your trading. However, if you use a well-known virtual private server, which is running only for Forex traders, it should work great too.

  6. MetaTrader MQL Services says:

    Hello,

    With regards to the article, good luck finding a VPS provider with between 1ms and 12ms to your broker, unless your broker is located in the same building that your VPS is in, which is very rare.

    12ms to 15ms is ideal, 20 to 30ms is more realistic. Again however location is key: the close your vps is to your broker (with as few routers as possible), the better the performance and latency of MetaTrader.

    • Alexander says:

      Hello, I understand that is hard to get a latency less than 12ms. However, it’s a way you need to choose in order to make your trading more profitable.

  7. Joris says:

    Hello,
    The latency with my broker is according to a ping test 13ms on average. I suppose using a vps will not speed up my connection with the broker’s server considerably. The average order execution time is around 500ms (MT4 ECN account). Is there a way to further speed up execution time?
    Please, enlighten me?

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