A VPS in the wrong city is worse than no VPS

[Fairman]

A VPS in the wrong city is worse than no VPS

Plenty of traders rent a virtual server and assume speed is solved. Then the latency to the broker turns out to be 90 milliseconds because the server sits in a data centre on the other side of an ocean.

The rule is boring: put the machine as physically close to the broker's trade server as possible. Many brokers run their servers in London LD4, New York NY4, or Tokyo TY3. A VPS in the same building can reach the matching engine in one or two milliseconds.

Before paying for anything, ask the broker where the trading server is hosted, then test ping from candidate VPS providers. A cheap server in the right place beats an expensive one in the wrong place every time.

Another detail: ping to a web address is not the same as latency to the trading server. The platform should be connected and the actual round trip time measured from within it, which most terminals can show.

A rough benchmark, for reference: under 2 milliseconds suggests the machine is in the same facility as the broker's server, 5 to 20 suggests the same city, and above 50 suggests a different region altogether. A scalper working at a one or two pip scale will feel the difference between the first and the last.

It is also worth asking the VPS provider about the network route. A cheap provider with a congested path can show a low average ping with occasional spikes, which brings the jitter problem back by another door.

Providers also differ in how they handle outages. Reading recent reviews about downtime and support responsiveness is worth the time, since a cheap server that goes dark during news costs far more than a better one.

What latency does the setup show to the actual trade server?