Trading At The Speed Of Light: Why Low Latency Matters
In this article, We will take you through low latency. We will look at Dominion Markets and its low latency offer. Before we go into that, let us first understand what low latency is and why it is important.
WHAT IS LATENCY?
In trading, latency is the delay between placing and executing an order. Online trading requires you to rely on a broker to execute trades per your requirements. Some brokerage firms take a lot of time to execute your requests, leading to high latency. Other brokers, such as Dominion Markets, don't delay to execute your orders, hence offering you low latency.
WHAT CAUSES HIGH LATENCY?
Here is the main cause of latency you might be experiencing with your broker.
A primary factor contributing to network latency is the physical separation between the device making data requests and the server responsible for responding. For instance, if your company is situated in London, engaging in trading activities with markets in Beijing can become problematic when latency is substantial.
An effective approach to alleviating distance-related concerns is collaborating with a network infrastructure provider with a worldwide network infrastructure and cloud capabilities.
WHY IS LOW LATENCY IMPORTANT?
Low latency is important in online trading. Here is why
Improved Price Execution: You can execute orders quickly if your broker has low latency. Quick execution will put you in a favourable position, ensuring you don't miss out on those important price movements.
Arbitrage Opportunities: Low latency enables traders to spot price disparities between different markets or exchanges instantly. Spotting disparities allows arbitrage strategies where traders can buy low in one market and sell high in another, profiting from price differentials.
Reduced Slippage: Slippage occurs as a result of market fluctuations. It is when the actual executed price differs from the expected price. With low latency, you can execute your orders quickly, reducing slippage due to market fluctuation.
Competitive Advantage: If you have low latency, you will be in a better place concerning highly volatile markets. You can react quickly to news, market changes or events. Competitive advantage means you will stay ahead of your competitors.
Scalability: Low latency is highly advantageous for high-frequency trading (HFT) systems, which execute many trades quickly. Scalable low-latency infrastructure allows you to handle increased trading volumes efficiently.
Risk Management: Risk management determines your performance in the online trading market. If your broker has low latency, you can expect trades more quickly in volatile markets. This means you get off the market exactly when you want to, with the profit or loss that your trading plan accommodates.
Algorithmic Trading: Do you have a trading algorithm? If so, you know it depends on low latency for quick execution and robot precision when executing complex strategies.
WHAT IS LATENCY ARBITRAGE
Latency arbitrage is a trading tactic that benefits high-frequency traders at the expense of slower trading participants. Latency arbitrage is software that practically guarantees effective trading by catching the faults of the slow broker and basing your trades on the quotes of the quick broker. It contains price arbitration from individual exchanges with fractions of a second latency.
Delay or Latency Arbitration focuses on using flaws by brokers whose quotations are out of sync with the market and obvious to other brokers. These events are extremely rare and often caused by technological variables such as server load, data transfer delay from the quotation source, etc.
Of course, this is only achievable with the help of a machine that compares such relationships in real time; milliseconds are critical here. It is conceivable, though, and there is a potential to increase the trader's edge.
Dominion Markets, an online ECN Forex broker, emerged in 2020 to establish secure and equitable trading environments for global traders. This brokerage specialises in providing low spreads and expeditious withdrawal services
The inception of Dominion Markets in early 2020 marked the realisation of their vision. Their vision extended beyond merely offering trading solutions to active day traders and scalpers; it encompassed trading education and risk management strategies to incentivise traders.
Dominion Markets distinguishes itself by offering its clientele low-latency connectivity and top-tier liquidity. Collaborating with various industry partners, Dominion Markets can now access quotes previously accessible only to high-net-worth individuals.
SERVICES OFFERED BY DOMINION MARKETS
Dominion Markets offers several services. Below, I will take you through some of them.
Perfect for novice traders who want simple, direct market access with no commissions
Spread from 1.0 pip
Designed for the experienced trader who requires deep liquidity and tight spreads
Spread from 1.0 pip
Institutional grade liquidity for the professional traders
Spread from 1.0 pip
Dominion Markets offers you two platforms for online trading. First, we have the Meta Trader 5 platform. MT5 has no restrictions when trading. The platform has some of the best trading conditions.
There are no minimum order distances and a freeze level of 0. You can, therefore, place stop-loss orders very close to the market price. The platform doesn't restrict the size of trade you wish to place.
BE YOUR OWN BROKER
Embrace Financial Independence with Dominion Markets!
Joining forces with Dominion Markets is a straightforward and highly lucrative opportunity for the right individual. A commission of $7 per 1 lot is applied whenever you execute a trade. Here's a breakdown of how these commissions are distributed:
- $2.5 goes to liquidity providers for routing all orders to the market (A-Book).
- $4.5 constitutes the broker's profits, covering system maintenance, administrative costs, license fees, and more.
- Out of the $4.5, $1.5 is shared with partners.
As a Partner of Dominion Markets, you receive a portion of the commission, which amounts to $1.5 per 1 lot traded! Many of our leading partners enjoy a monthly passive income from $3,500 to $7,800!
LOW LATENCY IN DOMINION MARKETS
Dominion Markets offers you low latency at a fair cost of just $3.5. You have numerous beneficial features on the pro account type, including low latency. Dominion Markets puts its clients first, ensuring quick execution.
Unlike Other brokerage firms, Dominion Markets understands the importance of low latency and how it can impact your trading career. With the pro account, you will have access to low latency, enabling you to manage your risk and putting you ahead of your competitors.
REASONS WHY OTHER BROKERS HAVE HIGH LATENCY
Outdated Technology: Most brokers with high latency use outdated trading systems and infrastructure. The fact that they are outdated means they will be prone to delays in processing orders and transmitting data.
Network Congestion: We can attribute some of the high latency experienced by brokerage firms to high network traffic or congestion levels. Data packets are delayed and rerouted during peak trading hours, leading to high latency.
Server Location: Another cause for high latency is the physical location of the broker's server. If the broker's server is far from the traders, they will likely experience high latency. This great physical distance means it takes time for signals to move from the trader to the broker.
Inefficient Data Centers: If a broker doesn't invest in robust data centres, they might experience high latency. Data centres might experience downtimes due to huge volumes of trading activities. Investing in a robust data system ensures it can handle huge trading volumes, improving latency.
Overloaded Servers: The servers are also a key aspect of latency. It can slow down if many clients overload the broker's server. A broker should, therefore, invest in a proper server that can handle numerous clients.
Inadequate Internet Connectivity: Internet connection is key when it comes to latency. Brokers use internet connection to transfer signals to liquidity providers. A broker with a poor internet connection will have high latency.
Software and Algorithmic Issues: A broker's trading software can introduce latency into the trading process. When the order types become complex, it becomes hard for the software to cope. This introduces high latency.
Low latency is pivotal when online trading. It can mean the difference between you being profitable or not. Therefore, Choosing a low-latency broker is essential to your online trading career.
Explore the significance of low latency in trading with Dominion Markets. Discover why low latency matters, how it sets Dominion Markets apart, and the reasons behind high latency with other brokers. Choose low-latency trading for a competitive edge. Join Dominion Markets today and enjoy all the benefits of low latency.