Richard Paul O’Neil

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What is co-location in forex trading?

Co-location refers to placing a trader’s server physically near a broker’s or exchange’s data center to minimize latency. By reducing the physical distance, execution times drop significantly, giving traders an advantage in fast-moving markets. Co-location is widely used by high-frequency trading firms and institutional traders. While not common for retail traders due to cost, some brokers offer VPS (Virtual Private Server) services as a cheaper alternative. Co-location provides a competitive edge for strategies that depend on speed, such as scalping and arbitrage.