Latency is the time it takes for the signal to get from the trading platform (such as MT4 or MT5) to the broker’s server and get processed.
Your trades will execute more quickly when the latency is minimal. When latency is high, then it delays your trading, and there are chances that you might lose more money in your trading.
The order must register with the trading server when you click the “buy” or “sell” button. So, When using low latency VPS, Signals will be received by your Meta Trader algorithms in milliseconds. They will fulfill your requests before your competitors if they receive notifications more quickly than others.