It is common for brokers demo accounts to perform differently from their live accounts. There can be a number of reasons for this, like, spread, slippage, requotes and connection speed to name a few.
Today I want to focus on broker connection speed, which is also known as “latency”. This is how long it takes your PC to connect to the brokers servers via your Meta Trader 4 account.
Depending on the trading style your system or EA uses, the latency can be very important e.g. if you are scalping the market then every second and every price movement is vital to capatilize on, while if you’re a posistion trader then you can expect to be in the trade for a while which means you don’t need to worry so much about the smaller movements in price or execution time.
So, how do you work out your brokers latency? Well, it’s actually quite easy.
Whether you are using a Virtual Private Server (VPS) or your home PC, the process is the same as described below:
- Navigate to your MT4 folder in your C: drive.
- Open it up and then open the “config” folder.
- In the “config” folder look for a file that has the same name as your brokers live server (this normally has “real” or “live” in the name; or if you want to test a demo accounts latency then look for the relevant demo account)
- Open up the file and scroll along until you see something that looks like an IP address, e.g. 235.256.458.23.
- Note this number down somewhere. It usually has two numbers at the end after the “:” sign. Ignore these two numbers. They are not needed.
- Click “Start” on your PC and locate your “cmd.exe” program. You can do this by typing in “cmd” to the search box (Windows 7). Then open this program.
- Where the cursor is, type the word “ping” then hit space and type the IP address you noted down earlier and hit “Enter”
- Your computer will then ping the brokers server and list on the screen the latency which is usually noted in milliseconds, e.g. 33ms for 33 milliseconds.
And that’s it!
If you have more than one broker you’d like to test this against, just repeat the steps above.