Using a VPS service buys you a ton of peace of mind for pennies of outlay…

Which looks more secure, this bank of high end servers in a maximum security centre or your PC?

A VPS service – Virtual Private Server – is basically your own separate, dedicated PC environment running 24 hours a day on someone else’s computer network.  More technically, the service runs on a remote bank of servers hosted by a provider hiring out space and bandwidth on these servers to the public.

In other words, you can forget about having any trading software on your local PC and set up your entire trading environment on this remoteserver, as well as any other software that you may incidentally want to run there.

Most often, people use a VPS as a fail-safe mechanism in addition to running programs on their local PC. However, more and more, folks are shifting to this “cloud” concept for their entire trading strategy.

There are many reasons for using a VPS service when you trade forex, most important among them:

• A VPS provides an uninterrupted power supply (UPS) service for you, meaning that if your local PC dies or your Internet connection goes down, the VPS remains active, continuing to run your programs. This is certainly true of the better VPS services which have a guaranteed up time of way above 99%.
• You can run programs such as automated forex trading robots on a VPS 24/7. This means you can turn your PC off and go about your life secure in the knowledge that your program has the best possible chance of doing its job.
• Depending on the service you sign up for, there are varying levels of technical support available should you strike any problems, wish to upgrade etc
• You don’t have to use your own PC or laptop or other device in order to accessyour programs. Any PC/laptop/tablet/mobile device capable of accessing the Internet enables you to connect to your programs running on the VPS and monitor or maintain as appropriate.
• Leaving the best until last: with a reputable forex VPS provider you will get absolutely minimal slippage due to the fact that their whole business model centres around the fastest access to the data streams your trading orders are transmitted through. For example, the VPS provider I use currently for my forex robot trading – Beeks VPS – locates their forex specific servers in London and New York as close as it is possible to the data feeds for the major liquidityproviders in forex trading.The importance of this cannot be overstated if you are running forex robots. Any popular forex robot will be placing countless orders to the market at virtually the same time, which means that the pool of available liquidity for accepting these orders may be exhausted quite quickly, leaving your orders out in the cold if they are coming from a distant server. Using an extremely low latency forex VPS service gives you the best possible chance of front-running the wave of orders.

As always, do your own research when selecting a VPS. Some suggestions to start with are the following service providers, who have been around long enough to have gained reputations as being reputable, reliable and offering good to excellent service:

Beeks

Ultra Hosting

CNS

ForexVPS

As implied above perhaps the best use for a VPS service is for the trader who has decided to run one or several automated forex trading systems – robots. If you want to explore this topic further click to go to Forex Robots

Track the forex trading hours open and close times around the globe in a market that rarely sleeps…

Each timezone has its own trading hours, interlinking with neighbours as they drive liquidity cycles

The forex market opens each week during the Asian time zone, beginning with Auckland, New Zealand when the banking and financial sector starts up around 8 AM (21:00 hours GMT or thereabouts).

Thereafter begins a rolling progression of forex market opening times and closes around the globe.

Next to start is the eastern seaboard of Australia comprising the major financial centres of Melbourne and Sydney. The Australian session is only just getting under way when Tokyo opens 2 hours later, followed by Singapore an hour after that.

This overlapping of market sessions often gives rise to instability and volatility. It can provide great opportunities for trading, and at the same time expose beginning forex traders to great risk.

The new forex trader is well advised to study these times as they relate to their personal trading sessions and adjust their approach accordingly.

A further complication relates to the issue of daylight saving and other seasonal adjustments. Depending on where you live, and therefore whether or not local authorities adjust for daylight saving etc, market open and close times can change by one hour up to 4 times a year. Keep an eye on these seasonal clock adjustments, not just for your own time zone but for the major financial centres such as London and New York.

Above is a representation of the four major global time zones in forex, with open time countdowns updating in real time.

Note especially how the sessions overlap, beginning with the Australasian open in Sydney, progressing through Tokyo, then to London and on to New York.

There are also smaller but quite significant open and close events centred around Central/Eastern European nations such as Russia, and later in the day as Frankfurt opens an hour before London.

The Frankfurt open is especially interesting since it can often push price in one direction only to see a complete reversal when London begins trading!

These overlapping zones represent areas of likely volatility which I think of as “forex tidal wash” areas. If you have ever stood at the mouth of a river as it enters the ocean when the tide is changing you will have observed the turbulence and the washing of one stream of energy into, through and across the other.

In the area where I grew up these tidal washes attract sharks: they like to hunt in the camouflage of the swirling turmoil which also helps to confuse their prey. Does this remind you of times you have entered the market when volatility suddenly increased? I think you can see the connection; it is a time to exercise great caution.

The Three major Tidal Washes are:

Asian Tidal Wash after quiet start in Australia: Tokyo/Singapore opens

European tidal wash after Asia ends: Frankfurt/London opens

The New York Open / London Close tidal wash

A couple of resources that you may find helpful in keeping in tune with the various timeframes as they change during the year due to daylight savings etc. are the following:

http://www.worldtimezone.com/markets24.php : WorldTime zone – Daylight Savings Markets Clock

http://www.anuko.com : Anuko World Clock is a download for Windows that replaces the regular system clock with several time zones of your choosing. Includes a template for “World Clock for a Forex Trader”, among others.

The concept of forex market trading through different time zones and levels of volatility is a good place to introduce one safeguard a trader can use for these times if they are unable to watch to their open trades: a VPS service.

Click to go to VPS service

Scalping is like those high action thriller movies that keep you on the edge of your seat. It’s fast paced, exciting, and mind-rattling all at once.

These types of trades are usually only held onto for a few seconds to a few minutes at the most!

The main objective for forex scalpers is to grab very small amounts of pips as many times as they can throughout the busiest times of the day.

Because scalpers basically have to be glued to the charts, it is best suited for those who can spend several hours of undivided attention to their trading.

It requires intense focus and quick thinking to be successful.Check out this post by our regular psychologist, Dr. Pipslow, on how to work on your concentration skills.

It is not for those looking to make big wins all the time, but rather for those who like raking in small profits over the long run to make an overall profit.

You might be a forex scalper if:

• You like fast trading and excitement
• You don’t mind being focused on your charts for several hours at a time
• You are an impatient person who doesn’t like to wait for long trades
• You can think fast and change bias, or direction, quickly
• You have fast fingers (put those eSport skills to work!)
• You are a surgeon!

You might NOT be a forex scalper if:

• You easily get stressed in fast moving environments
• You can’t commit several hours of undivided attention to your charts
• You’d rather make fewer trades with higher profit gains
• You like taking your time to analyze the overall picture of the market

Some things to consider if you decide to scalp:

Trade only the most liquid pairs

Pairs such as the EUR/USD, GBP/USD, USD/CHF, and USD/JPY offer the tightest spreads because they tend to have the highest trading volume.

You want your spreads to be as tight as possible since you will be entering the market frequently.

Trade only during the busiest times of the day

The most liquid times of the day are during the session overlaps. This is from 2:00 am to 4:00 am and from 8:00 am to 12:00 noon Eastern Time (EST).

Make sure to account for the spread

Because you enter the market frequently, spreads will be a big factor in your overall profit.

Be sure your targets are at least double your spread so that you can account for the times the market moves against you.

Try focusing on one pair first

Scalping is very intense and if you can put all your energy in one pair, you’ll have a better chance at being successful.

Trying to scalp multiple pairs simultaneously as a noob will almost suicidal.

If you start to get accustomed to the pace of things, then you can start by adding on another pair and see how it works for you.

Make sure you follow good money management

This goes for any type of trading, but since you are making so many trades within a day it is especially important that you are sticking to risk management practices.

Major news reports can throw you off

Because of slippage and high volatility, trading around highly anticipated news reports can be very dangerous.

It sucks when you unexpectedly see price jump in the opposite direction of your trade because of a news report!

As traders, we need to think globally, since the currency markets are international in structure.

We also need to keep in mind that we are individuals inhabiting a single time zone. And though we need to know what’s going on at the global level, if we are trading on the lower timeframes – from scalping up to day trading – we have to juggle both the internationalcurrency moves and the local forex market news and announcements.

There is another post on this site – Daily Forex Trading Hours – that covers the difficulties encountered when trading at certain times of day. For example, when the European and Asian sessions open, and the major foreign exchange centres such as Frankfurt and London in Europe, and Sydney, Tokyo and Singapore in Asia, begin trading.

Beyond this, the forex trader needs to be keenly aware of their local market and how it moves during the hours they will be trading it.

Some of the things that you need to know with regards to your local forex times are:

• The sentiment coming from the forex trading session just ended. You need to have a handle on what the major news announcements – scheduled and unscheduled – had on the market sentiment with respect to the currency pairs you will be trading.
• The imminent news for the session you are about to trade. Unless you are actually trading the news announcements themselves, you only need to note the scheduled announcements that may move the market. As time goes by, you may even place less emphasis on news in general except for those obvious majors such as exchange rates, jobs reports etc.
• Local news sources. It’s amazing just how much you can learn from a casual read of one or two of the better newspapers. Sometimes you don’t even have to go down to the financial section, such as when there is a rates announcement coming up that day and the speculation is covered in the lead news articles. Television and website news sources, as well as the usual forex news and calendar resources such as you will find on this site, should help to fill any gaps in your understanding of where the market is  currently headed.
• The local forex market character. This can be extremely idiosyncratic, right down to the national and state level. For example, Japanese forex trading may be influenced by current cultural events on the same day that Australian forex trading is subject to the release of GDP figures. And yet both will occur during the same trading session. This can make for interesting, if not exactly tradable volatility in the currency markets.
• Who the local big players are. The major banks, the central banks and the governments. Know what they are up to, what their current outlook and sentiment is, and the likelihood of them making surprise announcements during your trading session.

A major landmark in your personal forex landscape is the broker(s) you deal with. Don’t don’t just open an account and start to trade. Make sure you both know and have written down somewhere that is easily accessible, the following:

• The brokers’ open and close times. When they open for business at the start of the week and when they close at the week’s end. You also need to know what hours they are easily contacted. Good brokers will have some kind of contact facility 24 hours a day for the days they are open for business, but many will be referring you to an overseas service when their local office closes for day. Be aware of how your brokers operate in this respect so that you are able to contact them in emergencies.
• Keep an eye on the spread variability across the forex session you are trading. This will vary across brokers, with some being better to trade at certain times than others.
• Any scheduled down times. Some brokers will take down their servers for maintenance or other reasons at scheduled times each week. Ask your broker what these are, if any.

The last thing you need to be intimately familiar with of course is your workstation and its connections.

Whether this is an older style PC, laptop or even one of the newer options such as mobile or tablet, make sure that both the hardware and software are up to date and running at peak performance.

Especially important is your Internet connection. Make sure you have emergency phone numbers close to hand in case your connection drops out during a trading session.

Know what’s likely to be lurking in the forex landscape you hunt in

In my case, I often have a problem with my ISP (Telstra) slowing to a crawl during my evening time, which happens to coincide with the London open. As a contingency, I fire up my laptop which is running on a wireless connection, at that time.

The temptation to think of forex trading as a global pursuit can lead us to just sit and stare at our PC screens, watching charts and waiting for signals. We have to remember that we are very much influenced by our local environment.

When hunting trades we have to be intimately connected to the landscape we are hunting in, otherwise something nasty might leap out of the bushes to show how easy it is to turn from hunter into prey…