What is a VPS and what is it good for?

A Virtual Private Server, also known as VPS, acts as an isolated, virtual environment on a physical server, owned and operated by a cloud or web hosting provider. VPS hosting uses virtualisation technology to divide a single physical machine into multiple private server environments that share resources.

To keep things simple, it's a 'server in the cloud' that is always running - even when your own computer is switched off. It doesn't matter if the power goes out or even if electricity is extremely expensive - the server is still running.

In the context of trading, this is highly relevant when using trading robots (so-called Expert Advisors - EAs), as you want the robot to be constantly active and looking for potential trades as well as monitoring and managing already open trades. If the power goes out or the internet goes down consequences can be devastating as the robot loses all contact with the market and cannot handle your open trades. You want to minimise this risk as much as possible. 

It is also important to choose a VPS provider that fulfils your trading requirements at the most reasonable price possible - there are many to choose from.

Which VPS provider should I choose?

When choosing a VPS, there are three main things that are important to consider;

Firstly, it is about up-time. A server needs to be updated at regular intervals and you want these updates to occur at the weekend and not during the week. Updating the VPS means that it needs to be restarted and will then be shut down for a period of time.

The second aspect to consider when choosing a VPS is the server capacity (CPU). This determines how fast your server will be and how much it can keep running at the same time. If you're a trader who uses many different robots at the same time, as well as different trading platforms, your server will need more capacity than if you use one robot on one platform. When it comes to capacity, the physical location of the server is also important. For us in Sweden, a server located in London will most likely have a faster response time than, for example, a server located in Australia. 

Price is also an important aspect to consider when choosing a VPS. A too cheap server will in most cases have shortcomings (for example, too low capacity) while a too expensive VPS may contain features that are unnecessary to pay for. 

Some Brokers offer to pay for a VPS for us as users provided we trade a certain volume per month. One of these is Vantage Markets

We ourselves use a VPS called VPSForexTrader which we are really happy with. They have three different levels of capacity to choose from at attractive prices and you can choose where you want your server to be located. As the name might suggest, they are specifically focused on forex trading and support the vast majority of trading platforms, including MT4, MT5 and cTrader. If you need a reliable VPS for your forex trading, you can create an account here.