One of the most important factors that Forex Traders use in selecting a Forex Broker is the hosting which means faster trading. Many brokers now promote the fact that their hosting is collocated with Banks and other Liquidity Providers in a location like NY4 and LD4. Having a collocation facility is believed to reduce latency and to give traders an advantage in their trade execution. These collocation facilities also offer the best in terms of security. In the past, there are cases where hackers have accessed a broker’s server and through a Denial of Service attack held the broker hostage.
Traders have become obsessed with the need to reduce latency and increase security. VPS or Virtual Private Server hosting has become an industry itself and is demanded by many of these traders. Often times the goal would be to find a VPS provider that is near the colocation facility of the broker.
Forex Brokers now have the option of using cloud hosting as an option to a fixed location. This gives Forex Brokers a greater deal of flexibility in connecting their clients from around the world. Cloud hosting allows clients to automatically connect to the nearest location. These services offer all of the benefits of reduced latency as well as the same levels of security. Companies like FCM360 offer a MetaTrader 4 cloud based hosting solution to NY4, LD4, and TY3. This company claims 100% uptime with their service which is critical to Forex Brokers operations.
Cloud hosting offers Forex Brokers an affordable and attractive solution to hosting. Trading platforms like MT4 have made changes recently to accommodate the demand for cloud hosting. Traders can now rent a VPS and select a Cloud based server that offers the lowest ping times without any installation needed. It looks as if cloud hosting is here to stay it remains to be seen as to when most Forex Brokers are ready to make the move.
Trading Forex and Derivatives carries a high level of risk, including the risk of losing substantially more than your initial investment. Also, you do not own or have any rights to the underlying assets. The effect of leverage is that both gains and losses are magnified. You should only trade if you can afford to carry these risks. Trading Derivatives may not be suitable for all investors, so please ensure that you fully understand the risks involved, and seek independent advice if necessary