Like it does for website hosting, such that your website runs round the clock, a VPS can help your trading platform remain online, especially if you trade high-frequency trading strategies. However, should you use a regular VPS for your trading needs?
Understanding the differences between a Forex VPS and a regular VPS is key to determining which solution best suits your trading strategy. In this post, we’ll break down the key distinctions and considerations you should consider when choosing between a forex VPS and a regular VPS.
What is a Forex VPS?
A Virtual Private Server (VPS) is a dedicated trading environment that runs on a virtual server and operates independently from your personal computer. Websites are often hosted on these servers, so they’re always active and free of interruption. While standard VPS solutions exist for various online activities, a Forex VPS is specifically designed to meet the unique demands of forex traders.
A Forex VPS is a virtual environment that allows traders to run their trading software continuously, even when their local device is turned off. Even if you trade any other financial instrument group outside the Forex market, such as stocks, you can also use a Forex VPS.
We go in-depth into what a Forex VPS is in this post.
What are the Differences Between a Forex VPS and a Regular VPS?
Here are some of the differences between a forex VPS and a regular VPS:
1. Purpose and Latency Consideration
The biggest difference between a forex VPS and a regular VPS, and perhaps the most significant advantage the former has over the latter, is the strategic positioning of servers. Regular VPS providers tend to have their scattered servers worldwide while concentrating more on areas that make the most business sense to them. For instance, it is normal for a regular VPS provider to have their servers close to Google servers in all countries because they know that most of their users use Google searches.
Forex VPS providers, on the other hand, have traders at the forefront of their minds when it comes to the placement of their servers. They place their servers close enough to servers of brokers and trading exchanges worldwide. This way, trading latency is brought to a minimum.
2. Resource Allocation
Resource allocation is another huge area where a forex VPS differs from a regular VPS. With a Forex VPS, the client often can determine how they get to use the resources that the VPS provider offers.
For instance, a client can allocate 80% of their RAM and processing power to an expert advisor that’s running on the MetaTrader. This way, the Expert Advisor becomes the focus of the VPS. Many regular VPS, on the other hand, don’t offer this targeted resource allocation.
3. Additional Features
A Forex VPS often has features that help improve the trading experience of the user. For instance, ForexVPS (the brand) comes with trading analytics features. Some other VPS brands also have a MetaTrader preinstalled. Even those that don’t have the trading platform pre-installed have their servers optimized to run them.
For a regular VPS, though, whatever additional features it has is very likely not going to be specific to trading.
4. Support
The specificity of support that a user will get from a Forex VPS will also be different from what they’ll get from a regular VPS. A Forex VPS support will be trained to handle customers’ questions and issues that cut across trading and the VPS as a tool. For instance, a Forex VPS support service may be able to help troubleshoot an Expert Advisor issue.
Because regular VPS support caters to customers who are using this VPS for all kinds of purposes, specificity may be too much of an ask.
5. Pricing
Pricing is another area where a forex VPS differs from a regular VPS. Because the focus and optimization of a Forex VPS is for trading, it can be more expensive than the regular VPS.
The more expensive pricing of the forex VPS, though, results from the focus on low latency and higher performance, which usually require more expensive equipment. The regular VPS, on the other hand, doesn’t have to focus on specific use cases while serving a broader customer base.
Which Should You Go For Between a Forex VPS or a Regular VPS
If you want to use the VPS for trading purposes, then a forex VPS is your best bet. It may be a tad more expensive than the regular VPS. However, you get value for your money when you think about how most Forex VPS services have colocated servers in the same data centers that host the servers or trading brokers and exchanges. This means that the risks of slippage are significantly reduced, helping you save money.
Having said that, not all traders absolutely need a forex VPS. If you’re a swing trader to whom high-speed execution doesn’t matter much, you really don’t even need any kind of VPS at all.
How Do You Choose the Right Forex VPS
Selecting the best Forex VPS for your trading needs requires careful consideration of several factors. Here are the key points to evaluate when making your decision:
1. Latency and Server Location
Choose a provider with Forex VPS servers located near your broker’s data center. It’s even better if the provider has a colocated server in the same data center as the broker. Lower latency ensures faster order execution, which is crucial for high-frequency and automated trading strategies.
If you’re unsure if a VPS has a server close to a data center, contact them and let them clarify the information.
2. Uptime Guarantee
Reliability is essential in trading. Look for VPS providers that offer a 99.99% uptime guarantee or higher to minimize the risk of unexpected downtime, especially if you’re going to be running a trading bot.
3. Resource Allocation
Ensure the VPS has sufficient RAM, CPU power, and bandwidth to handle your trading platform, expert advisors (EAs), and indicators without performance issues. Now, it is hard to say how much computing power your trading bot will need in this blog post. But that’s a question the VPS provider should be able to help you answer.
If you’re unsure, do a trial with them to see how it goes.
4. Customer Support
Customer support is, perhaps, the most important non-technical reason you should choose a Forex VPS or dump one. Forex trading operates 24/5, so round-the-clock customer support is crucial to resolve potential issues swiftly.
Also, don’t settle for less with the support if they’re not offering solutions to your issues.
5. Pricing and Value
Of course, pricing is another huge factor in choosing a Forex VPS. And when it comes to this, we recommend that you not only focus on the numerical values of the various forex trading VPS providers you’re considering. Instead, focus on the value you’ll get for whatever you pay.
If you subscribe to a cheap VPS with poor support, you’ll likely pay for it in the frustration you get when an issue arises. That’s why you need to make a wholesome comparison of what the providers offer for their prices. Also, read reviews from independent review sources to get an unbiased view of what other users think about each VPS.
