Since publishing my video course on how to set up a Forex VPS I have been receiving lots of questions in regards to Amazon Web Services (AWS) and Amazon VPS for trading. Example:
“What do you think about AWS? Do you think if it has enough ram to support three instances of mt4 at the same time with 10 ea working in each platform?”
Amazon offer the first year of their subscription for FREE, and this means that if Algorithmic traders deploy their Forex Robots at Amazon they save some cash on VPS hosting.
A lot of traders out there do recommend AWS. But I’m going to take a different stance: in this blog I will give you five reasons why you should NOT use Amazon VPS for Forex Trading, and hopefully save you lots of heartache and stoplosses.
Amazon VPS Forex
First things first, if you are not entirely familiar with AWS, let’s quickly cover that off. Here’s a quote from their website:
Amazon Web Services (AWS) provides trusted, cloud-based solutions to help you meet your business needs.
Here “cloud” is just a trendy term for describing IT solutions that are located off-premises, i.e. remote.
As this description suggests, the principal designation of AWS is to help businesses cut costs buy replacing expensive infrastructure (servers, cables, software, etc.) with cheap and highly scalable infrastructure in the cloud.
In my other life I’m a Data Scientist and I could go on about AWS and cloud IT forever 🙂 If you like, you can find out more info about AWS here: What Is AWS?
But what about Forex?
Well, one of the solutions that Amazon offers is the EC2 which is basically a VPS, and you can use it for many different things. Among them – for hosting your MetaTrader 4 trading terminals.
By the way, I’m assuming that if you are reading this article, you know how the whole Forex VPS story goes: you get a VPS, setup MT4, launch your EAs, they trade for you and make money. If you aren’t familiar with this concept, simply check out the 3-minute intro video to the Forex VPS course.
So this is what traders think: “I’ll get a Free VPS for 1 year from Amazon, host my EAs there, and save some cash.”
Sounds like a plan? NOT AT ALL!
Don’t mistake AWS for what it’s not
Okay, so here’s the hard truth:
Amazon Web Services is designed for businesses, and NOT for retail traders.
All of the incredible benefits of AWS like scalability, on-demand use, low cost – only work for enterprises. For you and me – nope. Not a good idea.
“Why?” You say. Here’s what we will do. I will give you a list of Pro’s and Con’s of using AWS for trading and then we’ll go through the items one-by-one.
Pro’s and Con’s of Amazon VPS in Forex Trading
|1st year free
|Only 1 GB Ram
|After 1st year: pay-per-hour
1st year free
Yep. It’s free for the first year. But that’s the only advantage I can think of. Everything else – normal VPS providers have the same or even better.
Plus, if you are planning on trading Forex profitably, why would you want to save pennies? What’s a good VPS going to cost you these days? $30-$40 per month.
Alright, we’re off to the cons.
BTW, I’m not just writing this up out of thin air. I actually went and got an AWS EC2 Server to use as a Forex VPS. Here it is:
Launched beautifully the first time. I installed my MetaTrader 4 (didn’t want to install more than one right away given that RAM is scarce on these things), and began my what was supposed to be a month of testing.
Day 2, this happened:
I thought, okay. Sometimes happens. Will try again in an hour.
1 hour later: nope. Nothing.
Hmmmm… Must be a glitch, I’ll reboot the VPS and try again.
Okay, this is not good. Looks like a serious problem, let me give support a call and see what’s going.
No phone number… Live chat maybe?
Nope. How about an email?
No? Can I at least submit a support ticket?
And then it hit me! There is NO TECHNICAL SUPPORT AT ALL
To be fair, the support guys exist, but to get access to them, it will cost you:
Here the Developer level, only includes emails that are answered during “local business hours”.
That means if your server goes bonkers between 5pm–8am (let alone on the weekend!), you’re screwed.
Obviously, since this was a test I chose not get support. I decided to keep trying. Plus, for that same price I can get a much better paid VPS with outstanding support included.
I did that for a few days, nothing changed. I even launched a new VPS instance – couldn’t connect to that one at all.
Tried again a week later – nothing happened. Both instances were down.
To make sure that the fault is NOT on my side, I called up one of my friends and asked him to try from another computer in another country. Same result – no response from either of my two Amazon VPS Forex Servers.
Just for fun yesterday I created one more instance and checked it today, and it launched! Incredible! I wonder how long it will last… The other two are still down, even though AWS tells me that all three are running:
The worst in this whole situation is the feeling you get. Imagine: you have EA’s running on a live account trading with real money, you have not been able to log onto your server for 3 weeks, rebooting doesn’t help, there is no technical support, and as a bonus, the control panel sarcastically tells you “All good mate! Your instances are running”.
How would you feel? Powerless, perhaps? At least, you would not feel like you are in control of the situation.
With 2 out of 3 servers permanently down, level of control is definitely a problem.
Only 1GB Ram
Answering Lucas’ question from the start of this blog, I use the following calculations for VPS RAM:
- Operating system: minimum 250mb
- Each MetaTrader 4 platform: another 250mb
- Emergency Ram: 500mb
With 3 MT4s you on 1GB Ram you would be scraping the pass mark, and that’s without budgeting in any reserve.
In this case Server Stability will depend on the EAs. If you ask me, 10 on each MetaTrader is a bit of a stretch for this type of server…
As soon as one of the Robots decides to run a demanding calculation, you’ll get a system overload, and… well, this is the point you will need to call support. Hold on! There is none: refer above (you’re screwed).
After 1st year: pay-per-hour
Assuming that everything goes well in the first year and you are extremely happy with the service you are getting, these are the prices that you will be looking at if you want to continue your lease:
First thing you notice is that you don’t pay per month, you pay per hour. Why is that?
Because AWS is designed for businesses. Allow me to elaborate.
You see, Data Scientists and Analysts alike use AWS to run complex regression models and all sorts of other analytics. The way these models work is they are computational-heavy, they run for a few days, but then they go to sleep until they are needed again.
This means that sometimes the IT infrastructure is needed, and sometimes – not. Paying per hour is very convenient in these cases, because you don’t have to pay for downtime. This is, hands down, one of the BIGGEST reasons why AWS is so lucrative… for businesses.
Alas, we as Forex Traders, cannot benefit from this advantage of AWS, because our servers have to be running 24/7.
Of course, you could argue that you would switch off your VPS over the weekends. But are you really going to do that EVERY weekend? Just to save a couple of bucks?
Did you notice that every time I mentioned cost-effectiveness as being one of the advantages of AWS, I used italics?
That’s because it’s cheap for businesses relative to their on-premises ongoing IT costs. Not for retail traders.
Let’s have a look at the prices above…
As we discussed, 1GB is not a lot of RAM. Let’s say you want decent VPS Server for your Forex Robots and you choose to go with 4GB.
Okay, 7.2 cents/hour doesn’t sound like a lot. But, how much is that going to cost you per month?
7.2c x 24 x 30 = $52 / month
Doesn’t sound so little now, does it? Now check this out:
At PhotonVPS, which I recommend, for only $46 you get:
- a 4GB Windows VPS; AND
- a defined number of CPUs (not “Variable” like Amazon); AND
- 24/7 support that are there to take care of you
For full disclosure, I am an affiliate for PhotonVPS. And that’s because I like their product, I use it myself, and I know it’s reliable. But you tell me – which do YOU think is a better deal?
Summary: Amazon VPS Forex
I don’t have anything against Amazon VPS, I think they are doing a great job in the space of Data Analytics. However, don’t mistake AWS for what it’s not. AWS is designed for businesses, not for people.
By choosing AWS you might save $16/month (that’s how much a 1GB VPS costs at PhotonVPS), but in return you will get heaps of uncertainty and tons of headache if something crashes.
Moreover, don’t forget that we aren’t playing computer games here. We are Forex Traders. If something crashes on your VPS and there’s no support team to help you out, you can lose a lot more than $16. Is the trade-off really worth it to you?
I will leave you with a quote from one of my favourite entrepreneurs, from whom I am learning a lot, Ramit Sethi:
“There’s a limit to how much you can save, but there’s no limit to how much you can earn.”
Focus on the earning, not the saving.
Let me know your thoughts in the comments below!