How to Choose the best Forex VPS or dedicated server?

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Beside the profitable trading strategy, the most important part of an algo trading system is the
server and surrounding technical setups which will accommodate the strategy.

 

Key Features

1. Location:

In Forex trading the 3 most important and only relevant locations are:

  • Equinix LD4 Data Center – Address: 2 Buckingham Ave, Slough SL1 4NB, United Kingdom (Used to call it “London” but in fact this data centers located in Slough)
  • Equinix NY4 or NY2 Data Center Address: 755 Secaucus Road, Secaucus, NJ, USA
    or 275 Hartz Way, Secaucus, NJ, USA (Used to call it “New York” but in fact this data
    centers located in New Jersey)
  • Equinix TY3 Data Center – 1-9-20 Edagawa, Koto-ku, Tokyo, Japan, 135 0051

 

Forex brokers and their algorithmic trader customers’ servers should be located in one of the above data centers. All other locations are considered Forex Trading Deserts — no man’s land. The best choice for Forex trading is Equinix LD4 data center, where is the highest liquidity and the largest number of participants. Traditionally, London has been the center of currency trading.

 

2. Server (dedicated or server which is hosting the Forex VPS):

  • The server and/or VPS processor (CPU) clock frequency should be at least 3 GHz (Gigaherz) or more. The CPU should constantly operate at maximum base frequency. Below 3 GHz CPU clock frequency is great for email servers, website hosting but not for algorithmic forex trading.
  • The server should not be overloaded.

*Forex VPS does not become a Forex VPS simply because the server is not overloaded. The not overloaded operation is just a minimum requirement as it is for any other computational tasks.

  •  Disk should be a SSD (solid state drive), and should be in the servers. Separate central
    storage is not recommended.
  • Minimum 10G dual, low latency network card, ports in load blance.
  • All electronic components in the server should have enhanced cooling, which results in faster, more stable, and longer-lasting operation. Blade servers and 1U high servers are not recommended.

 

3. Network

  • The Forex VPS network should be in a collapsed layer network with a maximum of two hops. In other words, the trading messages from a Forex VPS must pass through a maximum of two switches before leaving the VPS provider infrastructure toward the internet or directly to the broker or exchange infrastructure. The network infrastructure should be as simple as possible. Overcomplicated routing, firewalls, etc., will add latency.Internal network connection between the 2 hops should be atleast 100G
  • The network should be a duplicated load blanced structure to ensure redundnacy

 

4. Connection

  • The connection to brokers or trading venues should have a ping with a singledigit millisecond (ms).
  • In some cases, such as market making, the use of cross-connection directly to the trading venue is recommended.

 

Author:
Nandor Herpai
UltraFX Team