Pepperstone Brokers New Data Feed & Latency

[marc walton]

Hi, I am regularly asked which are the best forex brokers. I have used over a dozen in the last 8 years and the ones I now use the most & trust are pepperstone & thinkforex.com

Pepperstone this week have just upgraded their infrastructure which means that trades should be placed instantaneously which is especially important if you are using eas like million dollar pips which are scalping and therefore need the quickest connections and transactions available.

Latency…what is it and how does it affect me?

I’m sure that many of you have heard the term “latency” before and may have seen people talking about this subject in relation to their VPS.

Latency simply refers to the amount of time it takes data to move from one location to another.

When it comes to trading certain strategies ( news trading/scalping ), speed is very important. When you click “buy” or “sell” on your terminal, you want that order to reach the market in as little time as possible.

Prices can move drastically in a matter of milliseconds and even the slightest delay can cause slippage.

Most traders recognize that it is ideal for their terminal to be close to their broker’s server. For example if your broker’s server is in New York and you use a New York based VPS, then it is possible for your order to reach the broker within a few milliseconds.

This is called “front-end latency”; the time between your terminal/VPS and the Broker’s Server

What many people overlook however is the “back-end latency” which is the distance between the broker’s server and the liquidity providers ( where your order is actually filled ).

You could have the best VPS and have your orders arrive at the broker in 1 millisecond but if there is latency on the backend, you could still have execution delays.

For the past several months, Pepperstone Financial has been working on a solution that will virtually eliminate backend latency and we received confirmation yesterday that this work has been completed.

You can read the official announcement here Pepperstones New York Server Launch along with more technical details here Global Forex Trading Just Got Faster

I’m sure that many of you are similar to myself and don’t care to know all the technical ins and outs so here’s a simple explanation of what this means and more importantly, how you and I can benefit.

Beginning on Monday Oct. 10th 2011, Pepperstone’s MT4 server will be directly connected to the Integral Fx. For those that aren’t aware, Integral FX is one of the largest trading networks ( grid ) in the industry. Essentially this is the spot where orders have to arrive in order to be filled.

Previously Pepperstone had to send your order from their server in Sydney/Singapore to one of Integral’s cloud points throughout the world. This could potentially be thousands of miles away and as we know the further away something is, the more time it takes to get there…latency.

Integral Fx and Pepperstone are now both in the same Equinix NY4 facility in New York and as previously mentioned, they are directly connected through fibre-optic cable.

Instead of orders having to travel thousands of miles from Pepperstone to Integral, the orders will now arrive within nano-seconds ( billionths of a second ).

If you are trading through a VPS based in New York, you will likely have less than 1 ms latency from your VPS to Pepperstones’ MT4 server, and now there will be mere nano-seconds from Pepperstone’s server to Integral.

This will result in execution speed/fills that should be second to none.

As far as I know, there are no other retail fx brokers that have a similar arrangement with Integral. For those using scalping strategies or trading EA’s such as Million Dollar Pips, the enhanced execution speed offered by Pepperstone should provide you a big advantage.

Pepperstone is ASIC regulated, offers accounts in 8 base currencies ( AUD, CHF, EUR, GBP, JPY, NZD, SGD, USD ), offers micro-lot trading and has some of the tightest spreads in the industry.

In addition we have a deal with The Aslan Group where you will receive 0.36 pips/lot cashback rebate on a Standard Pepperstone Account and $0.90/lot on a Razor ECN Account ( those wanting to receive rebates must open and account through this link Pepperstone/Aslan Rebate Program )

Of course we know that the proof will be in the eating but even I am cautiously optimistic.

Pepperstone has highlighted a couple of VPS providers here

My personal choice right now would be CNS however I am aware of a VPS provider that will be set up in the Equinix NY4 facility ( same place as Pepperstone and Integral )within a few weeks. When they are live, you will not find a better combination of broker/VPS in terms of execution speed.

Best Regards, Marc

[capsmart]

I would just like to add that latency is important when you are running a robot (expert advisor), especially a scalper.
If I use a VPS that is in New York but I am in Greece and press the buy button it will take some time before my command is "understood and executed" by the platform running in New York.
Additionally if you use pending orders, stop loss or trailing stops those are already running on the platform and will not be affected by the VPS.
If you use a tool to manage your trades like the toolshed that hides it's levels then again a VPS is important to avoid delays.