Oanda just another bucket shop

[Atomised]

And there was me seriously considering opening an account with Oanda......

Mick

How long was the platform down for today during the news and how long do them wide spreads last during news times, like 5 or 10 mins or less ?

[bearprofits]

Spreads were wide 20 then 30 for 2 to 3 minutes at most, dropped to 5 on euro for another minute or two, then back to 1.5 to 1.2.

I was disconnected, but was able to log back in immediately, happened twice.

I will not enter during the wide spreads, and they can be a pain when trying to manage stops during the news. But these are the only problems I have experienced, never had a problem being filled or slippage.

They have some good interest to boot.

Have thought about stepping up to an ECN type broker but a couple of friends have had similar or worse problems with them.

As long as I know what to expect I know how to manage it. over all I like Oanda they are not without their faults.

fwiw,

bear

[MickMason]

Spreads can stay at 20 pips for anything up to 15 minutes and sometimes across the most trivial data releases, especially on Gbp/Usd.

For the purpose of this comparison we need to ignore what happens on the interbank market, it's not relevant, we're not trading the real market.

Let's take the average day trader. He's got say a couple of thousand dollars and makes on average 2 or 3 trades per day for a few pips per trade, in essence he's a scalper.

He wants to find a broker who isn't going to mess with his trades, where he is allowed to scalp, and where the spread is small. On the face of it Oanda is looking like a pretty good choice. They don't have a dealing desk and say they offer straight-through order processing. Most of the time they've got a 1.2 pip spread on Eur/Usd, they allow trades for any amount, and they pay interest on account balances. They also have a Traders Bill of Rights and say all the right things like how they offer a level playing field in this den of thieves we call retail forex trading. Sounds good.....but let's take a closer look at how all this works in practice compared to, for example, CMC.

Oanda usually has a 1.2 pip spread on Eur/Usd, so how comes my 8 pip 10k trade didn't make me $8? Pipettes is the answer, it looked like 8 pips but in reality it was only 7.2 because in actual fact you didn't buy at 1.3350 and sell at 1.3358, you bought at 1.3350(4) and closed at 1.3357(6), that means spread was really 2 pips. CMC have a fixed 2 pip spread on Eur/Usd and no pipettes hiding the true cost of your trade. If you buy 10k at 1.3350 and sell at 1.3358 you make $8. Bear in mind Oanda spreads vary, in the early European session it's usually 2 pips or 1.5 pips so in actual fact it's more expensive to trade with Oanda than CMC in a lot of cases.

Oanda don't have a dealing desk, that's a good thing isn't it, no-one to mess with my trades and hunt my stops? Stop hunting is a falacy, it simply doesn't happen with mainstream brokers like CMC. The benefit of trading with a broker who has a dealing desk is for times when the platform goes down or you lose your internet connection or you're away from your PC and want to open, close, or adjust a trade. Oanda's lack of dealing desk isn't for your benefit, it's to reduce their overhead.

Oanda have a Traders Bill of Rights, no-one else does, that must mean they're honest. Well read it, what does it really say once all the marketing hype is taken out? Basically it says nothing, it's all just soothing noises to make you feel better, it's a first class sales pitch but really amounts to nothing.

Oanda pay interest on my trades by the second, that's more profit for me, plus they pay interest on my account balance. Sure, they pay interest on yield positive trades by the second but they also charge you on yield negative trades, it's swings and roundabouts. The interest they pay on your account balance is negated by what comes next.....

Widening spreads across data. Oanda widen spreads on even the most insignificant data, usually by 15 or 20 pips and sometimes as much as 30 pips. But I don't trade data so it doesn't affect me does it? Yes, it can, especially if you're already in a trade. The wider spread can trigger your stop so you have to widen your stop accordingly, that increases the risk on your trade. You might want to exit a profitable trade on a data spike but Oanda's wide spread stops you doing that, or at least reduces your potential profit. You might want to enter a trade on a spike but wide spreads mean you'll get a worse price. There goes this month's interest they paid you on your account balance! That, together with the platform going down when data like NFP comes out will lose you far more than the few cents they pay in account balance interest.

Oanda don't freeze price feeds, they're fully automated so there's no dealer intervention. Check it out, run another platform or charting package alongside Oanda's and see, they regularly freeze prices, in fact there's a screenshot around here somewhere showing different prices for two separate Oanda accounts, one had an open trade, the other didn't! If they really are a fully automated level playing field why does that happen, and why did spread widen to 200 pips on Gbp/Usd a few weeks ago with the excuse it was human error? Something doesn't ring true so why would they lie?

On the face of it Oanda seems like the ideal marketmaker, in reality they're no better than CMC and in a lot of respects they're worse. Why would a company want to disguise the true costs of trading with them or stop traders trading data like NFP by disconnecting them from the platform? Why lie about being fully automated when it's obvious they're not? And why publish all that fluff in the Traders Bill of Rights?

Personally I would prefer to trade with a company who doesn't try to disguise their costs or use underhand tactics like disconnects to stop me trading but it all boils down to personal choice I guess.

[static]

Originally Posted by MickMason

100% technical, it's good that you recognize your strengths and weaknesses and are not tempted by a fast buck, I believe that's where some people go wrong not just with news trading but with trading in general.

You're at school, that's cool, I'm stuck with trading so have plenty of time to watch boring analysts on Bloomberg crunching data, I think I'd rather be at school to be honest

I don't know about that, I still I still take trades on impulse from time to time but since I have never been right, I learned to use really small lot sizes and thankfully most of my lessons haven't been too painful.

Sometimes I wish I could just sit at home and watch charts all day with the amount of stuff they throw at at me, but the grass is always greener on the other side of the fence I suppose. The one thing that makes it all worth it though is the girls, especially now that it is starting to warm up. It keeps me looking forward to Friday nights anyway.

[jgerousis]

Originally Posted by MickMason

Another NFP day and yet another farce at Oanda!

Looks like Oanda have finally realized, after falling profits, that playing it fair and transparent just doesn't pay the bills.

They started out with the best of intentions, it's just a shame they couldn't keep it up. First they widen spreads, then they widen spreads even more, now NFP traders have to contend with a 30 pip spread at times like NFP and 20 pip spreads across other data!

Despite the wide spread traders still made money so their final resort has been to take the trading platform off line during NFP, a typical bucket shop practice.

Congratulations Oanda, you're now a fully fledged bucket shop, the only difference is that now you have wider spreads than your competitors, good move!

I have left Oanda sinceJanuary, after their big mistake of 200 pips spread. The problem, is that although they agreed that this was by mistake, yet it took them 2 hours, to correct the results, and after 2 hours, they put me back in trade!!!! But you know NFP, I would have been +60 pips in profit, after NF{, and my strategy is to change SL as soon as I am +40 pips in profit. But I could not do that, because the 200 pip mistake had cause my SLs to be hit. I called them at once, and asked them to put me back trade at once, so that I can change the SL. but they could not.

It took me one week of emails, and phone calles, to convince them that puting me back in trade after 2 hours is not fair, and I had been deprived of controling my trade for 2 hours. Although they refunded me the 5,000 USD loss they caused in my account, yet I stopped dealing with them, and withdraw all the money.

Now, I am working with another broker which does NOT change spread, but I am not happy, he has +5 on GBP, and +3 on EUR spreads. But at least better than Oanda, where if I have tight stops, or orders, this broker won't shoot for them.

[Atomised]

Hmmm so i guess that's the end of the road for Oanda and me. Anyone have any opinions on Interbankfx ? Or has anyone dealt with them ? Or maybe theres some other good brokers out there that i'm missing, preferably ones that pay good interest.

Actually if they done Euro accounts too it'd be an added bonus !

[juol]

After all these negative incidents, is Oanda still in the market today? I guess I should be lucky that I've come across this thread and learn more about such comapies.

[jailumar]

I have seen some NFP that gave a jump of 30 or 40 pips in EBS EUR/USD with not a single deal matched between. Even for a big player is sometimes hard to guaranty fills, in that situation its a very dangerous game and its very easy to get caught.
From my experience, I seen a couple of big names in spot with huge problems after a NFP, really we cant pretend to get stable trading conditions on that moments in our platforms, NO ONE in this market will guaranty that.
Sorry for my English