Saturday, November 7, 2009

Cutting the Costs of Trading... Virtual Private Sharing ?

In the past few months I have written one or two posts about the cost of trading and how the cost of a VPS is most of the time "ignored" from the equation. As I have said a few times, having a reliable VPS is vital to trading success with expert advisors as trading with a VPS guarantees small lags as well as a permanent connection to the broker. Many people think this is not necessary. I won't argue that it is possible to do this from a home computer without any problems, however, eventually something may happen which you will not be prepared for and this is the time when a VPS need becomes primordial. You may also want to check your journal log on your metatrader platform on your home computer, you may notice lags, disconnections, etc, which may be a cause of using your home computer, all these things may not become apparent unless you look for them within the logs.

Now, assuming that having a VPS is an absolutely basic need (which I believe it is) then it becomes a problem to find a cheap, reliable VPS. As I have said previously, investing less than 2000 USD means that you will probably not have enough monthly profits to pay for a reliable VPS. However, I have recently though about ideas we could use to try to reduce this cost and still be able to use a virtual private server.

The first thing that came to mind was simple. If a decent VPS is able to run at least 6 to 10 metatrader platforms without any problems at all, then why can't we share a VPS between traders to "ease" our trading costs ? Obviously, thousands of problems come to mind. First, you would have to trust others with your live account, what if someone does something that causes you to lose money ? What if something happens and the VPS is rebooted, loses connectivity ? What if your mt4 platform gets shutdown by one of your peers ? Well, certainly all of these things will be important matters in sharing a VPS. The next question was then fairly obvious. Is there a way to share a VPS in which the privacy of each account is not compromised ?

The answer, is YES. It figures that the solution to all the above problems is pretty simple. Say, Joe rents a VPS service for 30 USD a month, he has almost 750 MB of RAM which is enough for at least 10 metatrader platforms and he wishes to share his VPS with someone to offset his costs. What can Joe do ? Well, Joe then decides to "subrent" his VPS to 5 different people who are entitled to run one metatrader platform with their live account. In order to prevent everyone from interfering with each other Joe simply creates 5 additional login accounts with limited priviliges who cannot modify other people's processes or run anything more than their metatrader platform, Joe also sets up an FTP server so that every user has an account and is able to upload their experts and indicators to their home folder. At the end, Joe has a VPS which he "subrents" for 5 USD to each user, this leaves Joe with a total of 25 USD a month and a total cost for him of 5 USD. In fact, Joe could even charge 6 USD and have the cost totally eliminated for him.

Is this solution ideal ? Well, of course, it is true that Joe would have to know how to limit the accounts' access accurately, otherwise people may end up interfering, Joe would also need to limit RAM allocation to each user, otherwise one user may end up getting all the RAM in an inefficiently run (or with a very heavy EA) metatrader platform. Of course, some ground rules would have to be brought up and some trust needs to be existent between the users. However, the above solution solves almost all the problems related to "sharing a VPS". This new concept of a "community VPS" could save people who have small accounts a lot of money as it will be a very easy way to still keep profits while running their accounts in an always online, reliable, VPS environment.

What do you think of this solution ? I made a small test with two login "limited" accounts on one of my VPS with pretty good results, hopefully some of you may want to recreate my achievements or even start selling some "share" of your VPS. Also, if you want to learn more about the automated trading systems you can run on your VPS and how you can get long term profitable results from them please consider buying my ebook on automated trading or subscribing to my weekly newsletter to receive updates and check the live and demo accounts I am running with several expert advisors. I hope you enjoyed the article !


Maxim said...

Hello Daniel,

I have two technical notes about this:
1. You don't have to set up FTP in order to exchange files with your home computer,-just use remote desktop connection, which is part of Windows OS.
2. How do you limit memory for user in Windows?


Daniel said...

Hello Maxim,

1. FTP would be very practical in this case to limit the sharing directories, allowed storage space, etc. I think it is the most convenient solution for multiple users.

2. Regarding memory limiations what I did was more in the lines of limiting access to only launching one instance of metatrader, which of course, limits the amount of memory that can be used on trading platforms. Any suggestions to improve this would be welcome.

Thank you for your comment ! I hope this helps,

Best Regards,


Del said...

Hi Max:
I had a vps account and experienced something called "memory creep". They say that the longer the program ran the more memory you use. After about five days the program ran so slowly that I had to stop and restart everything. A couple of times it stopped working altogether and I had to e-mail and get them to fix it from thier end. I don't know if this is normal or not but if it occurs it can be a real pain. I can imagine if you had more than one instance of meta-trader running it would happen faster.

Maxim said...


The memory consumption depends on many factors: how many charts do you have in the metatrader instance, how many bars are presented in the chart, what indicators are used etc. Additionally, there are GDI handles, that Windows uses for drawing. You have to see the implementation code of the platform in order to understand whether they do it in optimal way.
Daniel, how would you treat the case when one wants both run live account and demo another account on different brokers?
How would you prevent interference on the "Experts" folder and relevant .set files?
To tell the truth, I prefer to pay 18$ for the VPS (at VPSland) and not to be a "watch-dog" of other traders...

P.S. It is always a good idea to restart the VPS on weekend,-personally I do it and don't have problems during the trading week.

Daniel said...

Del and Maxim,

Well, as a matter of fact I have never had a memory leak problem using mt4. As a matter of fact, I had 8 months of uninterrupted service on my VPS with no problems regarding memory usage. There are a few tricks to eliminating this problem such as changing the option to have less bars on charts and history.

To answer Maxim's question, if you want to use live and demo on different brokers the best thing to do is just install two different mt4 instances and run them. I have a VPS with 16 instances with 1 gig of RAM, no problems at all.

I think that the "extra cheap" VPS lease option I propose here would be a very good choice for people who want to run a demo test or very small live account with minimal costs.

I hope these answers your questions to a good extent.

Best Regards,


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