Colocation – Colocation (“colo”) means placing your own trading server hardware in a professional data center. In a colo setup, you own the hardware, but rent rack space, power, cooling and network connectivity in the data center. This offers exceptional reliability: data centers provide backup power, redundant cooling and multiple high-speed Internet connections. Advanced forex traders sometimes use colocation to host dedicated trading machines close to major liquidity sources. Colocation requires you to manage hardware, but gives maximum control and often the lowest possible latency (since you can choose a data center near your broker).

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