Low latency in trading means a very short delay between a market event and your system’s reaction to it: receiving a price, deciding, sending an order and getting it confirmed. In retail Forex, “low latency” usually means a few milliseconds or less between your trading software and the broker’s server. In institutional and high-frequency trading it means microseconds. Lower latency reduces slippage and requotes and is essential for strategies such as scalping and latency arbitrage.
Where latency comes from
- Market data latency: time for a price update to travel from the liquidity provider or venue to your software. See fast price feed.
- Network latency (ping): round-trip time between your computer or VPS and the broker’s server. Distance is the main factor.
- Processing latency: time your software and platform need to process the quote and create an order.
- Broker latency: time the broker’s server, bridge and risk checks need to process the order, including any last look window or artificial delay.
- Execution latency: total time from sending the order to receiving the fill. See execution latency.
Typical latency levels
| Setup | Typical network latency to broker | Suitable for |
|---|---|---|
| Home computer, another country | 50–200+ ms | Manual trading on higher timeframes |
| VPS in the same city | 1–5 ms | EAs, scalping |
| VPS in the same data centre (LD4, NY4, TY3) | Under 1 ms | Arbitrage, latency-sensitive EAs |
| Colocation with cross-connect | Microseconds | Institutional and high-frequency trading |
For arbitrage, Westernpips guidance is to keep latency to the broker below 5 ms; above 10 ms, results drop significantly.
How to measure latency
- Ping in MetaTrader: shown in the bottom-right corner of the terminal; a quick check of network latency to the trade server.
- Ping or traceroute from the VPS: to the broker’s server address, if the broker allows it.
- Order round-trip: log when the order is sent and when the confirmation arrives. This includes broker processing, not just the network.
- Tick-to-trade: time from receiving a price update to sending the order; measures your own software speed.
- Use percentiles, not one number: compare the median and the slowest 5% of orders. Spikes matter more than the average.
How to reduce latency
- Move closer to the broker: use a forex VPS in the broker’s data centre.
- Use a direct connection: FIX API removes the platform server layer between you and the broker.
- Use fast data sources: direct FIX, API or ITCH feeds from liquidity providers update faster than retail platform feeds.
- Keep the VPS light: enough CPU and RAM, no unnecessary programs, Windows updates scheduled outside trading hours.
- Synchronise the clock: accurate time is needed to measure latency correctly.
- Choose brokers with low execution latency: network speed does not help if the broker adds delays on its side.
Regulatory view: low latency and high-frequency trading
MiFID II treats very low latency as one of the features of high-frequency algorithmic trading, alongside colocation or proximity hosting and high message rates. Firms using such techniques face extra requirements, including testing of algorithms, risk controls and record keeping supervised by ESMA and national regulators such as the FCA. Under MiFID II RTS 25 on clock synchronisation, trading venues and their members using high-frequency techniques must keep business clocks within 100 microseconds of UTC with 1-microsecond timestamp granularity; other algorithmic trading must stay within 1 millisecond. These rules apply to investment firms and venues, not to retail traders, but they show the time scale on which modern markets operate.
Low latency in Westernpips Private 7
Westernpips Private 7 is built for latency-sensitive trading: it receives quotes from Westernpips Fast Sources or direct broker connections, compares them with the slower broker’s prices and sends orders through MetaTrader or FIX connectors. Its execution logs and Execution Control module help you measure latency by broker and stop trading when it becomes too high. See the FAQ on minimising latency and what to do if ping is too high.
FAQ about low latency
What is a good ping for forex trading?
For manual trading, under 100 ms is usually fine. For EAs and scalping, aim for under 10 ms. For arbitrage, under 5 ms and ideally under 1 ms from a VPS in the broker’s data centre.
Is low latency the same as fast execution?
Not exactly. Low network latency gets your order to the broker quickly, but execution speed also depends on the broker’s own processing and liquidity.
Risk warning: Leveraged trading in Forex and CFDs can result in losses that exceed your initial expectations. Low latency does not remove market risk, slippage or broker-side restrictions, and past results do not guarantee future results. This article is for educational purposes only and is not investment advice.