A VPN is used by people who want to opt for private and safe internet surfing. Due to regulations, some countries have set limitations on different forex websites, therefore traders may have difficulty accessing those. The appeal of a VPN, over and above the privacy, is that it also allows you to gain access to just about any website you wish to, including those that have certain restrictions.
A VPN allows you to maintain anonymity, meaning that your online activity and data cannot be tracked, gathered, or stored, as is often the case when one uses the internet. This provides a sense of security and reassurance for those that prefer this alternative, as it also reduces the chances of falling victim to hacking and other forms of cyber-attacks and criminal activity that may compromise your personal information, such as your password.
However, this is not to say that it comes without any drawbacks.
VPNs can be somewhat problematic as well. Moreover, some brokers are against being associated with traders that use VPNs, so much so that they may cancel the trader’s profits.
Risks associated with using free VPNs
The opposition to the use of VPNs is usually with regards to the free ones on the market. Despite this, some people still consider trading using a free VPN, more so now most people have adapted to either a hybrid work setup or working entirely from home.
Much like the growing interest in forex trading in recent years, there is also an increase in the number of VPN service providers who each offer different packages to attract more users. This ties in with people’s desire to ensure their safety when trading forex in the US, or any other part of the world. With the US being an integral part of the global trade and forex markets, regions often look to it for best practices.
Free VPNs usually benefit from selling user data
When one considers the risks of using a free VPN, one must be cognizant of the fact that the service provider will probably benefit from it somehow. It is widely believed that because the free option will attract many people, the service provider most likely gains through selling user information and data to third parties. In some cases, this may be noted in the terms and conditions, but chances are, most users never read them and merely agree to gain access to the free option.
Another related disadvantage of a free VPN states that when your data is sold to third parties, your device becomes vulnerable to malware. According to a study, approximately 38% of free Android VPNs contain malware that can be damaging to your devices.
When considering using a VPN for forex trading, it is highly advised that you do the necessary research on the options available. Try to stay away from free VPNs because often an online company that doesn’t require you to pay any money, will probably be pay in personal data. It is recommended that you review your forex broker if you have difficulty accessing their site without a VPN and, instead, opt for one that is credible and widely accessible.
VPN vs VPS
You may have heard the acronym VPS. VPNs is a Virtual Private Server, and it’s not the same technology as VPNs. A VPS is a Virtual machine that runs on powerful servers, usually situated in secure data centers. They also allow traders to run their automated strategies 24/7 without affecting other users or slowing down the connection.
Should you use a VPS?
As an individual trader, your performance may be impacted by the number of other people trading at the same time in the market. Traders share a single connection to a server with a limited capacity. This can result in slow execution speeds and disconnections from your broker platform during fast-moving markets.
Trading on a VPS provides you with an exclusive private connection, which removes any slowdown caused by other traders connecting to the same system. In addition, it also allows you to connect multiple devices at the same time.
VPS is sometimes a more cost-effective solution than using VPNs. The main advantage of using VPS is that it can allow traders to run automated trading strategies 24 hours a day 7 days a week with the fastest possible connectivity to the IC Markets server.
The benefits listed below may help you decide if VPS is right for your trading needs above VPNs.
VPS benefits include:
- A dedicated virtual private server with access to its own operating system where traders can install any software they want
- Ability to run multiple strategies at the same time
- No need for data transfers between IC Markets servers and VPS
- Fast trade execution times due to the proximity of the VPS to the IC Markets servers
- Guaranteed resources in terms of computing power, memory, and bandwidth
- No restrictions on the market data usage. As much as you need
- 24/7 support from Technical Account Manager with expertise in automated trading
- Ability to work both remotely and when logged in to your IC Markets account
- No downtime as you can resume work as soon as the server is back online after any disruptions.
VPS is basically a dedicated server, opposite to VPNs, which may run different clients through same IP addresses.
What is a good VPN for Forex?
A good VPN for forex trading should be able to provide you with sufficient comprehensive information about the benefits, risks, and disadvantages of using a VPN. It is important that you read up on any limitations associated with it, but also gain knowledge of its benefits in order to make an informed decision.
For those who are looking for a reliable solution for trading forex with ease, choosing an established provider like NordVPN can provide you with the necessary knowledge about what you need as a forex trader, as well as what you should expect from a VPN service.
It is important that one always researches the pros and cons of several options before making a choice. Do not go with the first option, by all means, but instead take time to review your options carefully. The VPN market has grown in recent years due to its popularity as an alternative means to access the internet privately.
With any industry that experiences growth, there are also growing numbers of fraudulent service providers.