Low latency or high speed fx trading is extremely crucial for various forex traders, the main reason for this is because time and again scalpers need fast execution to be able to obtain a lot of small trading profits in a relatively small time frame. It’s extremely hard nowadays to find true ECN brokers which have very fast order execution. Most market marker fx brokers start off having good execution but, the execution speeds rapidly slow down once you start making money off your broker.
One of the significant factors that does actually have an immediate influence on execution speed is server location. Usually speaking when an ECN brokers server is located near the liquidity source their execution speed will be substantially better. An extremely common place for fx brokers to host their Metatrader servers is New York, the most popular data centre in New York is NY4. NY4 is where most of the world’s biggest banks also house their servers. Fx trading with a forex provider who has a Metatrader server located in NY4 is usually a big plus for sclapers.
Of course owning one Metatrader server is not always the best. The reason for this is that if your broker has just one server and it goes down you simply cannot trade. It is extremely vital that you select a provider that has backup servers. Most reputable brokers have added backup servers in London, Singapore and Australia. This is certainly the case for one of the biggest fx brokers IC Markets.
It is often very difficult for new traders to work out where their fx brokers servers are located, it often takes guess work based on the IP address of the server. There are some Metatrader plugins that you can get that should assist you to identify your brokers server location.
You should always avoid trading small providers that are not well know as it is likely that they only have one server and it almost certainly won’t be in NY4 as it is very expensive for a broker to house its Metatrader server in the NY4 data centre.
Bigger brokers like IC Markets and Dukascopy always hose their servers in the most robust and costly data centers, this ensures uptime and low latency and makes it possible for their clients to scalp the forex market day in and day out. These forex brokers even have backup servers located in several parts of the world.
Probably the most reliable and stable Metatrader fx brokers that I’ve found is IC Markets. I have also found that the execution speeds attainable with IC Markets ECN are superior than those achieved with other forex brokers. I find that as a scalper I am able to execute my trading strategies in a much more efficient manner on IC Markets Metatrader than with any other broker.
All in all, make sure you try several different broker platforms to find out who has the smallest latency, just bear in mind that when testing latency with market maker fx brokers make sure to keep in mind that your speeds will slow down when you start making money. If it is an ECN broker that you are trailing make sure that the forex broker has backup servers in other parts of the world with at least one server in the NY4 data center in New York.
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