Execution Speed: Does Latency Matter for You?

Let me tell you a story.

About six years ago, I watched a bloke in Canary Wharf blow £200,000 because his broker’s server was 40 milliseconds slower than the competition. He didn’t lose it to slippage or adverse price movement. He lost it because he was a muppet who’d convinced himself that microsecond advantages were the difference between yacht money and ramen dinners.

He was wrong. Not about latency existing—it does. But about why he was actually losing money.

Here’s what nobody wants to hear: execution speed matters far less than you think, and obsessing over it is often a symptom of a much more terminal condition—the inability to admit that your strategy is the problem, not your broker’s fiber optic cables.

The Latency Theatre

Let’s start with the basics, because apparently this needs spelling out.

Latency is the time between when you hit “send” on your trading platform and when your order actually reaches the liquidity pools. We’re talking milliseconds. In institutional algorithmic trading, this matters. In high-frequency trading, it’s everything.

For a retail forex trader? It’s financial theatre.

The average retail trader in the UK is working on timeframes measured in minutes or hours. You’re not scalping the GBP/USD for 2 pips on a 30-second chart. If you are, you’ve already lost—congratulations, you’ve just chosen the hardest possible way to make money.

Let me break down the math: if you’re trading on a 5-minute chart, a latency difference of 100 milliseconds is literally 0.003% of your timeframe. It’s noise. It’s the trading equivalent of complaining that your Ferrari is two seconds slower than the previous model when you’re not qualified to drive it in the first place.

But here’s where it gets interesting.

Why Traders Obsess Over Latency (And Why It’s Usually Bollocks)

I’ve sat across from hundreds of traders, and I can spot the pattern instantly. The moment someone starts talking about “advanced broker selection” and “optimal server proximity,” I know what’s actually happening: they’re in the bargaining stage of grief.

They’ve lost money. They need an explanation that doesn’t involve their own incompetence. Enter: latency scapegoating.

“If only my broker was faster, I’d have hit that profit target!”

No, mate. You’d have still exited at the wrong time because your risk management is held together with duct tape and prayer.

“The slippage cost me the trade!”

Slippage of 2 pips on a position you should’ve closed 30 pips ago? That’s not your broker’s fault. That’s your stop loss being in the wrong postcode.

The psychology here is fascinating—and depressing. Traders will spend £800 on a VPS in Frankfurt, another £300 on “low-latency data feeds,” and obsess over shaving 15 milliseconds off their execution time… while their actual trading plan is riddled with more holes than Swiss cheese.

It’s expensive avoidance.

When Latency Actually Matters

Now, to be fair, there are scenarios where execution speed matters. Let me be honest about this because that’s my job.

Scalping on lower timeframes: If you’re actually scalping—not pretending to scalp, but genuinely trading 1-minute or 5-minute charts with tight stops—then yes, every millisecond adds up. But here’s the kicker: most retail traders who think they’re scalping are actually just gambling. Real scalping requires institutional-grade discipline, risk management, and emotional detachment that most humans simply don’t possess.

News trading: During high-impact economic data releases (NFP, interest rate decisions, etc.), latency can matter because liquidity dries up and spreads explode. A faster execution might get you filled at a better price than the schmuck next to you using a slow broker. But if you’re trading the news, you’re already playing a game with odds worse than a casino.

Arbitrage plays: These exist, but they’re either instantly closed by algorithms or they don’t exist for retail traders. Sorry, mate.

Competitive advantage in choppy markets: Marginally, during periods of extreme volatility. But even then, proper position sizing and psychology trump latency every single time.

The honest answer? For 95% of retail traders, latency is irrelevant. You’re not losing money because your order took 200ms instead of 50ms. You’re losing money because you don’t have a plan, you can’t stick to it, and you’re revenge trading after lunch.

What Actually Matters (And What Your Broker Is Hoping You Don’t Notice)

Here’s what I tell traders who actually want to build something sustainable:

Execution quality beats execution speed. A broker that fills you at a decent price without requoting is worth ten times more than one with microsecond advantages. Requoting is what actually kills retail accounts—not latency.

Spreads matter more than milliseconds. A 1.5 pip spread is worse than a 0.5 pip spread with 50ms extra latency. Full stop. And yet brokers advertise “ultra-low latency” while burying their average spreads in fine print.

Slippage variation is the real killer. Can your broker consistently execute near the quoted price, or does it swing wildly depending on market conditions? That’s the question worth asking.

Withdrawal policies and regulatory standing. Whether your broker is regulated, whether they actually let you withdraw your profits, whether they have a history of suspicious requotes during major news events—this is the stuff that separates the competent from the predatory.

The Bottom Line

I’ve watched traders waste thousands trying to optimize the 3% of their trading that doesn’t matter, while ignoring the 97% that does.

Latency is the excuse of someone who hasn’t yet accepted that the biggest impediment to their trading success is sitting right between their ears. It’s easier to blame the broker than to accept that your position sizing is reckless, your entries are arbitrary, and your exits are emotionally driven panic.

If you’re genuinely profitable, you’re profitable across multiple brokers with varying latencies. If you’re not, no amount of millisecond shaving is going to change that.

Does execution speed matter? Technically, yes. Materially, for you? Almost certainly not.

Focus on what matters: strategy, risk management, psychology, and discipline. The rest is just expensive distraction.

Now, back to the charts—and this time, actually have a plan.