I've been looking for a cheap but reliable virtual private server (VPS)
to run my trading program for the last few months. I ran my QTD program
on 3 remote servers in UK and Germany in April for an entire month as
performance testing. One in UK on a Xen cloud. One in Germany on OpenVZ.
And a last one also in UK on KVM technology. This post is a summary of
my initial findings on what to watch for when choosing a server provider
for running a remote trading server. Keep in mind that this is for
low-end, low-frequency, retail trading. Where latencies in the range of
tens of milliseconds are considered good. General target price range is
US\$10 - \$20 per month for an unmanaged server with 512MB of ram and
600MHz-equivalent of circa 2006 Intel CPU. Low price is the primary
consideration here. If you don't care for the technical details, the top
VPS names are Linode, Hetzner, and 6sync for Linux-based
VPSs. Linode offers Xen VPSs in US and UK. 6sync offers KVM VPSs in US
only. Both companies offer Linux-based 512MB instances for \$20 as a
starter server. Hetzner offers KVM VPSs in Germany for €7.90. Cloud
servers like Amazon EC2 and Rackspace Cloud are too expensive for
running 24/7.
Location, Location, Location
Use a datacenter that's at least in the same sub-continent as your
broker's datacenter. You wouldn't want your data to travel half-way
around the world just to save a few bucks. It adds unnecessary latency
and prices are comparable in either the states or Europe nowadays.
Although Asia is another story. If you use more than one broker, you can
use multiple servers or pick a server location that sits between them on
the internet backbone. TeleGeography provides global internet maps
to identify best locations. I trade with Dukascopy and Oanda. One in
Switzerland and another in the states. As such, Internet hubs in cities
like New York, London, and Frankfurt are prime targets for low latency
between both brokers. As I trade more at Dukascopy, I'm biased to
European servers. Furthermore, London and Frankfurt are the #1 and #2
internet hub in the world. London has 7,723 Gbps and Frankfurt has 7,218
Gbps capacity in 2010. Whereas New York, 5th in the world, has 3,850
Gbps.
Virtualization Technologies
Virtual private servers are merely reserved resource chunks of a
computer in a datacenter. This is achieved through the use of
virtualization technologies. And there are quite many of those as I have
discovered. Here are three that you'll likely hear about in your search.
- OpenVZ. This is the most popular and least preferred platform
for trading servers. It's often used by budget hosts because
resources between virtualized instances are not well isolated. As
such, a host can oversell a server's resource as most webapps have
sporadic resource utilization trend. In other worlds, it is unlikely
all the virtual private servers would demand their maximum allocated
resources at the same time. However, trading servers require a
consistent and guaranteed level of computing resource. So stay away
from VPS that runs on OpenVZ unless you want to see server hiccups.
- Xen. This is what Amazon EC2 and Rackspace Cloud runs on. Xen
offers true resource isolation so that you're less likely affected
by your virtual server's neighbours. What you see is also what you
get. So if you're promised 512MB of memory, you'll get 512MB of
memory. However, processing power varies tremendously across
different VPS providers. A micro instance on Amazon EC2 offers 613MB
of memory, for example. But it is no match for even a 256MB instance
on Rackspace Cloud. I was able to run a LXDE desktop GUI plus a java
program on Rackspace but couldn't do it on Amazon.
- KVM. KVM uses the Linux kernel to virtualize. It's said to offer
lower overhead to the host server so that it can provide better
value than Xen. Like Xen, it offers true resource isolation.
In summary, either Xen or KVM are good but stay away from OpenVZ.
Operating System
Key question here is: Linux or Windows? If you're unfamiliar with Linux
and is not interesting in learning about it, use a Windows Server 2003
or 2008 provider. Windows Server 2003 is preferred as it uses fewer
resources just to run so it's cheaper. Do note that Windows VPSs are
\$10-\$20 more expensive anyway because you have to pay for a monthly
license lease. With the use of a Windows-based VPS, you can connect to
your server through the remote desktop protocol (RDP). It's just a
matter of running the Remote Desktop application on your local machine
to your remote server. Then you'll see the remote machine's desktop on
your own machine. And then you can control the remote server just like
any other Windows computer. Very simple. However, I prefer to run Linux
because of its renowned stability and lower cost. The downside is that
you need to know what you're doing to tweak the server for trading.
Linux uses very little computing resource to run. I can squeeze JForex
and Metatrader together on a Linux VPS with only 256MB memory. By
comparison, you need at least 512MB on a Windows box just to get the OS
running. And there's no licensing fee for Linux too. A double savings.
Summary
When choosing a VPS provider, consider factors such as location,
virtualization technology, and operating system(s) offered. Once you've
narrowed your search to a shortlist of providers, the next step is to
compare their specific VPS offerings by looking at price, services, and
technical specifications.
[/caption] [caption id="attachment_5438"
align="aligncenter" width="497" caption="Memory data"]
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[caption id="attachment_5439" align="aligncenter" width="497"
caption="Interrupts data"]
[/caption] [caption
id="attachment_5440" align="aligncenter" width="497" caption="Disk I/O
latency"]
[/caption] [caption id="attachment_5441"
align="aligncenter" width="497" caption="Network
transfer"]
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