Last updated: October 22, 2019
Individual Forex Trading
Individual Forex speculators are a large and growing segment of the Forex market. These are people — usually non-professionals — trading on the foreign exchange market for personal benefit. This is a type of day-trading, and many of the people involved with it are also involved in other forms of personal day-trading. Like other forms of day trading, it is a highly risky activity, but can also be very profitable for some participants.
Virtually all of this trading activity is done online, using specialized software.
Most of the software used by individual Forex day traders can be put in one of two categories:
Analysis software — This is software that fetches market data (exchange rates, public transactions, other sources of financial news) and processes it for consumption. Analysis software can generate charts, help users visualize large data sets, and even making buy/sell recommendations.
- Trading software — This is software that actually connects the user to a specific financial market (sometimes to several), and facilitates actual transactions. A particularly interesting subset of trading software is:
- Automated trading — This is specialized software that actually conducts trades automatically on behalf of the user-investor, according to various algorithms or rules setup by the user.
Many software packages include elements of both types, and the more advanced automated trading systems allow end-users to create their own trading algorithms, or integrate with other software systems.
As an individual Forex trader, it is possible to run Forex trading software from your local computer, but many people choose to run these systems from cloud-based VPS servers. This allows traders to use more-powerful and flexible computing systems which run constantly and have access to higher-speed internet trunk lines.
What to Look for in Forex Hosting
There are a number of hosting companies that offer specialized Forex hosting, and you can also use non-specialized VPS or Dedicated hosting plans, assuming they provide the kind of features you need.
Hosting features that Forex traders benefit from include:
Proximity to financial markets — Geographical proximity speeds up information latency, making the difference between microseconds and minutes for trade decision and execution. This is hugely important for automated trading of any kind.
High-speed processing — Also important for automated trading, and for any kind of complex analysis software.
High-speed internet connection — The final piece of the speed puzzle. Most hosting plans are run out of data-centers with very high-speed internet connections — so, while this is important, it is not hard to find.
Additional security layers — Most Forex hosting plans provide some additional layers of security and isolation, over and above those provided by typical VPS hosting plans.
Pre-installed software — Most hosting packages that advertise as specifically targeting Forex clients provide pre-installed software packages for analysis and trading.
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