instead of running my software on a laptop,i would use a VPS to run the trading software on a server very,very close to the server of the exchange and use remote desktop to connect my android tablet to the software. Will this set-up introduce any extra lag in comparison to a normal set-up? this is for manual trading, not runningan automated program or robot
Depends. VS have a little more lag than normal ahrdware based installations deu to additional scheduling. It will be slower for trade entry, but if you sue computer assited tarding (trailing stops etc.) then those execute a lot faster. AND - you get better uptime as a data center has better connection, USV etc. (plus you still ahve a laptop backup).
If I understand the configuration setup correctly, the traffic will still go from you to the VPS server (via RDP) and then to the exchange server rather than from you directly to the exchange server. If that is correct then all you have done is added an additional hop (VPS) and RDP layer so you will certainly have more lag.
... except for computer assisted orders (e.g. trailing stops, computer-managed "simulated" stops, etc) managed by your trading software ... as pointed out by NetTecture above ...
Also given the 1 second "delay" of the human operator to decide a trade, the 50ms or so may not be that much. The real advantage is the computer assisted part - stops are "earlier" in the line because you enter them faster etc. Plus the internet is less likely to fail. And it is a good way into autoamted trading.
+1. For example, I rent VMs (VPS) to a lot of traders. To put things in perspective, the guys who need real speed run on "bare metal" (meaning the OS is installed directly on the computer like your desktop, not through VMware or Xen's XCP). The other guys rent VMs and don't know/care any different. But - one point I'd like to make is that the guys who run bare metal are pretty fast low-latency HFT guys and they run on Intel Atom D525 CPUs with 4gb RAM. Most of the manual or slower-speed algo guys insist on 4-16 cores and stupid amounts of ram. http://www.supermicro.com/products/nfo/2UTwin3.cfm ^^^ The really fast guys run on these. 8 bare metal Linux OS installs in a 2u chassis is awesome (and cheap for me and them). http://www.supermicro.com/products/nfo/MicroCloud.cfm or http://www.supermicro.com/products/nfo/2UTwin2.cfm ^^^ The other guys rent machines carved out of those. The only people who complain are the ones who have never broken 50% capacity but still complain about "slowness" and needing more horsepower. To answer OP's question, you still have the lag time between your mouse click and the remote server. I'm not sure where your broker is but do a trace route between you and your broker and see if that extra hop on the VM is going to add or remove time. If you are manually trading I'd think it's only going to slow things down. My VMs used to have about 0.1-0.35 milliseconds of latency between the VM and the hardware. I've upgraded a bunch and now they are down solid under 0.1ms latency between the VM and the Host - but running on bare metal will always be faster. The one thing that's nice about a VM is that it can run 24/7/365. If you have a spotty internet connection you won't lose charts or have to re-log-in to your broker. That said you could also get locked out of a position or have your system freeze and be stuck needing tech support ASAP only to find yourself in a lengthy phone queue. You'd be better off buying a desktop if you are manually trading. Out of curiosity, how much is your virtual server and who is the hosting provider? Where is the hardware located vs. where is your broker located?
This is a very good point! We also run a hosted solution for traders and this is something I neglect to mention and its very important. much appreciated.
This is a very good point! We also run a hosted solution for traders and this is something I neglect to mention and its very important. much appreciated.