I’ve recently learned a lot about VPN’s, virtual private networks, which raised the question, should I be using one to trade binary options? After all, a VPN is crucial for maintaining privacy on the internet, an important part of any digital security scheme and a handy way to get around geo-restrictions, censors and regulators. The use of this technological trick goes back for decades, almost to the beginnings of internet security, and was first used to allow employees to securely access a private or work-related network remotely.
What is a VPN Service?
A VPN, virtual private network, is an internet protocol that enables devices to access a private network over a public network or the internet. It sets up a point-to-point interface directly from your device that ends at the destination and often includes encryption. The combination of the “tunnel” and encryption means that hackers, malware and censors will not be able to see your connection, much less your content, and if they by chance are able to they won’t be able to read it without going to such extreme lengths decoding it won’t be worth the effort. In addition to these features, top providers have VPN servers located around the world and will route your traffic through any you choose effectively bypassing geo-restrictions.
Aside from security, the top uses of a VPN include unblocking social media, unlocking geo-restricted TV shows, watch Netflix anywhere in the world, online gambling and live streaming sports.
Should I Use A VPN To Trade CFD, FX, BO Or Cryptocurrencies?
At first thought you might think that yes, it would be a good idea to use one to trade online, no matter the market or type of trading (FX, CFD, etc.). They will protect your connection, they will prevent hacks or leaks of personal information and they will help you avoid geo-restrictions. The caveat is that all this protection comes at a price. That price turns out to be performance of your machine. Using a VPN can cause slow load times and lags that ordinarily would not be a problem but in the fast paced world of online trading will mean the difference between effective trading and throwing your money away.
If you manage to find a VPN that has minimal impact on your connection speed, then it might be a good idea to use it in order to improve your security but remember, lags will be present nonetheless. To counter this if you are trading BO, my best advice is to stay away from short term expiry like 60 or 120 seconds and use at least, and I mean at least 15 minute or more likely 30 minute expiry. And on the other hand, if you are trading CFD, FX or Cryptocurrencies, stay away from fast, scalping trades because the delay introduced by the VPN may very well prevent you to close the trade when you want. And considering that scalping needs to be lightning-fast and very accurate, the slightest delay can make the difference between profit and loss.
Brokers May Require KYC
Keep in mind that most (if not all) CFD, FX, BO, and Crypto brokers require you to go through KYC and AML procedures (KYC stands for Know Your Client and AML stands for Anti-Money Laundering), and part of those procedures is uploading your proof of address. Do you see how this defeats the purpose of using a VPN? You can’t make yourself look like you’re from Ukraine when your proof of address document clearly shows you’re from Connecticut.