Fast-paced trading environment

All the excitement about server latency, and execution slippage is well-founded. Much of the institutional trading nowadays is automated via algorithms, aiming to squeeze profit out of the most minute and blink-of-an-eye chart movements. The frequency fog of multiple algorithms may cancel out, lest their respective forecasted chart movements overlap and generate a virtual resonating frequency effect. The resulting spike in trading may come out of the blue for any human trader, and may be incongruous with any predictions reasonably made using either fundamental analysis, or technical analysis.

Entire multi-billion dollar hedge funds have gone stone-cold broke in a heartbeat due to the adverse impact of algorithmic trading – be it by the ill-advised programming of their own trading robots, or the effectiveness of those used by their competitors.

The lesson to be learned is to either pay attention while you trade, or make sure your positions will not fall below or exceed any predefined levels while you are off-screen. Expert Advisors, used in combination with trading signals or human trading, are one method of accomplishing this.

But most importantly, whatever command you enter in your MT4 needs to reach the real market that moment. Not seconds later. Because then it may be too late to skim maximum profits, or a spike on the chart has already taken a dive before you see this on the screen. The same holds for any market movement reaching your screen, because this is the data you use for decision-making!

The best way to mitigate this issue is to manage actual trading on a remote Forex VPS platform located as close as possible to your broker. Most Forex brokers have their servers located in London, or New York. A Forex VPS gives you near zero latency between your broker’s server, and your actual MT4 installation. By viewing the MT4 remotely, far less bandwidth is used compared to operating the MT4 on your local machine. Using a Remote Desktop to view your account alleviates the issue of delayed internet signal transmission.

Today’s fast-paced trading environment does not tolerate noteworthy amounts of execution slippage. Operational trading risk rises exponentially with increasing potential for execution slippage due to unacceptable internet connection latency.

Solve this problem by simply installing your MT4 accounts on your very own piece of server real estate, your private Forex VPS – located right next door to most noteworthy online Forex brokers in the industry.

Posted in Financial Transactions in Forex Trading, Forex terminology.