VPS location and why distance to the broker server matters more than specs

[Amanhasnoname]

A fast VPS in the wrong city is worse than a modest one near the broker. Network distance, measured in milliseconds of round-trip time, usually matters far more than CPU or RAM.

Most brokers host trading servers in data centres in London, New York or Tokyo. Equinix LD4 and NY4 are common. A VPS in the same facility can reach the server in under a millisecond. From a home connection across an ocean, the round trip can be 100 milliseconds or more.

For slower strategies this doesn't matter. For tight scalping with small targets, a 100 millisecond delay means entering after the move has already started.

Testing takes a few minutes. Ping the broker's trading server from the current location and from a candidate VPS. Many VPS providers list data centre locations clearly.

Remember, though, that lower latency doesn't fix a strategy with no edge. It only removes one source of cost.

Colocation-style hosting is also available for those who want the extreme end of this, with the server sitting in the same building as the broker's matching engine. For retail scalping with multi-pip targets it is usually overkill, but the principle is the same: shorter distance, fewer surprises.

What ping do you get to your broker's server, and is it worth improving?