The cost of being a few milliseconds late
Posted: Fri Oct 30, 2026 12:14 pm
The cost of being a few milliseconds late
A single millisecond means little to a human. In scalping, it is not nothing.
Price on a liquid pair can change dozens of times per second. A delay of 100 milliseconds might skip several ticks. On calm days, the price barely moves during that delay. On active days, it moves enough to cost a few tenths of a pip.
Over a hundred trades, a tenth of a pip is ten pips. For a strategy earning an average of one pip per trade, that is ten percent of the total profit.
Reducing latency yields visible gains only when the strategy depends on speed. Breakout entries, news reactions, and quick reversals are sensitive. Strategies that wait for pullbacks into limit orders are much less so.
Knowing which category the strategy belongs in decides whether paying for a faster setup makes sense.
A direct way to estimate the cost is to simulate delay in a backtest: shift each entry by 100, 200, and 500 milliseconds and see how results change. A strategy that collapses with a 200 millisecond shift needs infrastructure. One that barely changes does not.
How much do results change in a backtest when entries are delayed by a few hundred milliseconds?
A single millisecond means little to a human. In scalping, it is not nothing.
Price on a liquid pair can change dozens of times per second. A delay of 100 milliseconds might skip several ticks. On calm days, the price barely moves during that delay. On active days, it moves enough to cost a few tenths of a pip.
Over a hundred trades, a tenth of a pip is ten pips. For a strategy earning an average of one pip per trade, that is ten percent of the total profit.
Reducing latency yields visible gains only when the strategy depends on speed. Breakout entries, news reactions, and quick reversals are sensitive. Strategies that wait for pullbacks into limit orders are much less so.
Knowing which category the strategy belongs in decides whether paying for a faster setup makes sense.
A direct way to estimate the cost is to simulate delay in a backtest: shift each entry by 100, 200, and 500 milliseconds and see how results change. A strategy that collapses with a 200 millisecond shift needs infrastructure. One that barely changes does not.
How much do results change in a backtest when entries are delayed by a few hundred milliseconds?