Creating a Forex Trading Portfolio requires a little extra leg work to save a lot of time.
If you want to trade with multiple strategies in the Forex Market, there are different ways to accomplish this, but a common need is a Virtual Private Server (VPS). There are many different Virtual Private Server (VPS) providers out there and brokers even defray the costs of having a Virtual Private Server. All this talk about Virtual Private Servers can become a bit intimidating to traders who just want to take the path of least resistance. It is easy to say that it should not be and provide a detailed explanation, but rather understanding the benefits and the process to getting one is inspiring enough to put in that slight extra effort toward better returns.
Common Problems with Trading in a 24/5 Market
Forex Trading requires a way for traders to place trades and brokers to process the trades. In a 24/5 market, this means that devices and networks are operating. Brokers pay to have a trading interface and connection to the marketplace on a 24/7/365 basis. Traders have to take action and place trades in order to generate returns. With this general understanding, there are key issues.
- Traders cannot remain awake and alert to examine trading opportunities for 120 hours straight.
- Manual Traders miss out on trading opportunities because there are multiple opportunities throughout the day or at one time.
- Traders cannot diversify their approaches in an effective fashion by trading manually.
- Trading platforms (like them or hate them) use device resources.
- Traders do more with their lives than just trade. Their devices are there for more than just trading currencies.
- Traders are dependent upon their own internet connection (possibly a wireless connection), electricity, and computer's performance.
- Items 4-6 are amplified when using multiple platforms and strategies.
A Windows 10 update, malware, crashes, power outage, internet outage or wireless connectivity issue can get in the way between you and positive returns.
The Problems You Do Not Even Consider when Trading
- The limitations from the trading platform software and how it ties to your brokerage account.
- Deposit loads with your own Expert Advisors when trying to use multiple strategies or even the same strategy across multiple currency pairs in one account or sub-account.
- The resources used with multiple MT4 or MT5 platforms open at once and how backtesting can take a while.
- You can only copy one trading signal at once per account or sub-account.
- Resource usage combined with any sort of connection issues can create potential negative latency slippage.
Those who don't wish to use a Virtual Private Server for trading in the Forex Market have two options.
VPS Alternative Method #1: Manual Trading
This is the method of trading that results in 76.63% of traders being unprofitable. It is the path of least resistance, but it is the path that results in a lot of human interpretation and emotions being at play. Trades are missed, poorly executed, and undiversified. Traders miss out on the fun of life and spend their time in front of a screen while rooting on their position. It's the casino approach.
VPS Alternative Method #2: Automated Trading with a Dedicated Separate Computer
This is not a terrible idea. At all. Not using your primary use computer while having one computer running on a 24/5 basis is an alternative. The computer would solely be used for trading and having multiple platforms open. There's no other software outside of the trading platforms. Purchasing a NetBook can certainly be a cost-effective alternative in the long-run, it still faces the update issues though. However, it is still at the mercy of your connectivity and electricity.
If you have spare computer with enough resources to run multiple instances of a trading platform for multiple days in a row, this is a cost-effective solution as well as long as it is dedicated to trading only.
Forex Virtual Private Server Options
As a Forex Trader/Investor, once you realize that you can run multiple trading strategies at once while automating it is a bit of a new world. You have jumped from blue-pill conversations about trader psychology, demo trading, and money management to red-pill conversations about the technology and the strategic approach necessary to generate consistent profitable returns. This is a big step and it is not about selling server space, it is about ensuring the uptime, reduced latency, and resources you need to succeed.
No SaaS solutions exist that allow traders to program their own strategies in any language or a specific language or copy other traders. It's not exactly elegant, but until these software solutions are developed with the necessary servers that ensure mass usage, Virtual Private Servers are the answer.
Renting a VPS from MetaQuotes
Renting a VPS from MetaQuotes enables your Expert Advisors (algorithms) and Copy Trading Signals in MetaTrader 4 and 5 to function on a Virtual Machine. However, it is not exactly like the way it would be for the following three options.
Pros of Renting a VPS from MetaQuotes
This short three-part video series from MetaQuotes explains the positives of using their Virtual Private Servers for Forex Trading.
The ease of use with the MetaTrader platforms is the major selling point.
Cons of Renting a VPS from MetaQuotes
One of the major obstacles you would face with a MetaQuotes VPS is that you cannot put other platforms on there, which means that if you have a cTrader algorithm or Copy Trading Signal you wish to copy, you cannot put them on this VPS. You are locked into using MT4 or MT5.
The other con is a major downside and likely dealbreaker for this particular option. You can only get ONE VPS per account or sub-account. This means that if you have a portfolio of algorithms and Copy Trading Signals, you have to rent multiple Virtual Private Servers. Your costs could go up considerably.
Getting a VPS from a Broker-Affiliated Hosting Company
Did you know that your Forex Broker will subsidize your Virtual Private Server costs as long as you meet minimum trading volume requirements? Just get a Virtual Private Server from one of their affiliated hosting providers, meet the trading volume requirement, and the following month it is absolutely FREE. How about that?
- Can you have multiple trading platforms on the same VPS? Yes.
- Can you have multiple accounts or sub-accounts on the same VPS? Yes.
- Can you have platforms for different brokers on the same VPS? Yes, but only the trading volume with the sponsoring broker will count toward the trading volume requirement.
- Can you have multiple copy trading signals on the same VPS? Yes, but the respective platforms for the accounts or sub-accounts must be running.
These hosting companies will help you set up your trading signals and get your Expert Advisors running. If you need to make changes down the road, they can help you with that as well.
Check with your broker to see if they subsidize Virtual Private Servers and their policies. Freevestor works with brokers who will subsidize your Virtual Private Server. Check with Freevestor first to get a solution that works for you.
Below are sub-optimal methods, but they certainly work.
Getting a VPS from an Ordinary Hosting Company
This is an option if you want to use a Virtual Private Server or Dedicated Server from a Hosting Provider that you know and have a pre-existing relationship. You will have to pay for this 100% out-of-pocket and there is no support for setting up your platforms.
Not all Virtual Private Servers and Dedicated Servers are appropriate for setting this up. Make sure to check the System Requirements and the capabilities of the servers first.
Services like Microsoft Azure, Amazon Web Services, and Google Cloud provide similar solutions, but with different pricing models.