How do I Fix Multiplayer Latency

Instead of using a server for my multiplayer game, I decided to use a Host and Peer connection. However, I was wondering what the proper latency simulation time should be? Why?? Because the multiplayer lags like H E L L

Here is what I have in my pong game (LAG):

Mutiplayer[On peer connected[ Simulate latency 0.1 seconds with variance 0.03 and packet loss 0.05