What is latency?
Latency – in the world of trading – is the amount of time it takes to send a trade order from your location to your respective brokers location.
In simplified terms, latency is a measure of delay.
More specifically, latency describes the time that passes between a price quotation being made and a transaction being confirmed.
The delay can be affected by factors such as geographical distance or bandwidth congestion.
For easier understanding, let’s imagine you’re going to buy tickets for Ed Sheeran’s concert. You’re more likely to get the ticket you want if you camp out the front all night, rather than someone who has to roll out of bed and travel in the morning. To get the best seats – the speed is everything!
Meaning, if you’re miles away, you’ll never get the seat you want as there are others who are physically closer. In trading, if you want the price you see on your screen, you better be first to grab it! And the only way you can be first to get it, is if you’re right next to the brokers live server. In forex terms, if you’re sending a trade from London to New York, although it’ll take just a blink of an eye (100-200ms), that’s slow! You’d be quicker if you were in New York, where your brokers server is.
To maintain the lowest latency experience you need a VPS service provider that can provide accordingly. We have perfectly placed data centers in major business hubs like New York, London, Tokyo, Hong Kong, Amsterdam (check all our locations here) delivering ultra low latency and fast execution speeds for forex traders.
Here’s how to accurately measure latency between ForexVPS and your broker:
In this example, we will use IC Markets as an example when running a ping test.
1. Click on the Windows logo on the bottom left and select ‘Run’
2. Type ‘CMD’ and click OK, which will bring up a command prompt
3. Type ‘ping live04.icmarkets.com‘ or ‘ping 184.108.40.206’ and press enter
4. Once the test is completed, you will see the ping results on the right and the average ping time at the bottom. In the example below, the average latency from ForexVPS to IC Markets is 1ms.
That’s it! Now you can accurately check the latency between ForexVPS and your broker! If you have any questions, please don’t hesitate to contact us via the 24/7 live chat on our website. Happy Trading!