Latency is understood to be the delay within the time that it takes for data to visit from point A to suggest B. Within the situation of Foreign exchange buying and selling, this translates towards the distance involving the broker as well as their particular liquidity sources.
Latency is commonly probably the most overlooked facets of Foreign exchange buying and selling. From the traders perspective the main focus happens to be around the front-end buying and selling software. However, cutbacks in latency ought to be probably the most important factors in choosing a Foreign exchange broker. It is necessary that an STP broker that connects to numerous liquidity sources decrease the time that trade messages takes to achieve individuals causes of liquidity.
The Situation for Colocation
Out of the box the situation with lots of companies, a significant way to succeed is location, location, location. Many studies have proven that the best way to limit latency would be to make certain the location from the brokers servers have been in close physical closeness towards the databases. DivisaFX achieves this by finding their servers inside the same facility where Currenex hosts their servers. Which means that trade messages travel the least distance possible and provide clients precious milliseconds edge on other brokers.
Many algorithmic and frequency traders make use of the enhanced execution occasions by hosting their buying and selling system inside a collocation using their broker. Via a partnership with TradeSpotFX, traders are now able to make use of the VPS (Vps) plan to reduce latency and maximize the potency of their expert consultant or any other automated buying and selling system they may use.
Another advantage of server collocation is security. Banking institutions are needed legally to stick to the most stringent amounts of security and knowledge integrity. They have to also maintain server uptime of 99.99% so numerous backup copies are carried out to insure continuous buying and selling for clients of DivisaFX.