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What is a VPS?

VPS stands for Virtual Private Server, while VPS servers are typically used to host websites they are also often used by traders who can use them to run automated trading programs 24/7. A VPS is a specific type of server which is housed on the same hardware as other virtual servers. Even though these servers are all running from one machine they are perfectly capable of running independently of one another. VPS services offer users great flexibility, as it is possible to use and manage the virtual server as if it was a dedicated server fully under your control. When purchasing VPS services you will be guaranteed a certain amount of RAM, space and bandwidth per month allowing you to run whatever you want from your VPS. The price of a VPS services depends heavily on the type of computing power you need, the more RAM and disk space you need the more you will have to pay.

Benefits of using a VPS

Automated Trading

When it comes to Forex, the majority of traders that use VPS services are engaging in some form of automated trading. For instance a number of brokerages offer clients VPS services, allowing them to run MT4 Expert Advisors 24 hours a day meaning that they never miss out on a trading opportunity. While it is possible to run automated trading programs 24 hours a day from your desktop or laptop PC or Mac doing so can be rather impractical. Running a home computer will likely cost you a significant sum in electricity, often more than it would cost you to pick up cheap VPS services. Constantly running programs on a standard desktop PC or Mac may also see you damaging your hardware, with home computers not being built to stand up to such heavy usage.  This is why many traders who wish to run automated trading programs 24 hours a day ultimately opt to use a VPS.

Manual Trading

It has also been suggested that those who only trade manually should also consider using a VPS service. As it is argued that a VPS service is capable of placing your trades faster due to a VPS’s generally having faster connection speeds to a brokerages servers. This can significantly reduce latency time and in theory could lead to reduced slippage for traders. As slippage can cost traders significant sums of money, it has been argued that purchasing a VPS could save traders money over the long run. Whether purchasing a VPS service would actually be a good move for manual traders is debatable. Those with a modern computer and strong internet connection might find that there is very little to be gained by placing trades through a VPS.

Free VPS Services

You will find that a number of brokerages offer clients the opportunity to use a VPS for free or alternatively offering a paid VPS for those who desire it. Free VPS services are normally reserved for large or high volume traders, as the revenue generated by client will easily outweigh the cost of providing a trader with a VPS. A number of brokerages will allow clients to pay a monthly fee in order to take advantage of a Virtual Private Server, many of brokerages offer these services relatively cheaply and may be worth considering if you wish to run automated trading programs 24/7. There are also a number of specialist VPS providers catering specifically to traders, the quality of these services vary provider to provider though it is possible to get a VPS from as little as $11 a month.

Conclusions

Traders should remember that using a VPS can be quite expensive, though the majority of retail Forex traders will probably only require a limited amount of bandwidth and computing power. Using a VPS won’t be for everyone and many traders needn’t worry about using VPS to trade. Those looking to run Expert Advisors or other trading software 24 hours a day will likely be best served by using a VPS rather than running trading programs on a home computer 24 hours a day. It is recommended that those interesting in using a VPS go out and research what VPS solution would suit their needs best.

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