Oanda Is Why Im Broke

 50 Words on – Why you can go Broke with Oanda?

Problems will always be present, whether we are talking about brokers or… beer. Even if you are drinking your favorite beer, you will probably hate it if it’s warm. But it’s not the manufacturer’s fault you didn’t keep it in the freezer long enough. Similar to that, it’s not the broker’s fault if you want to trade in all conditions and don’t realize that spreads widen considerably during news releases. Maybe their product is good but some people are not using it right. Most complaints target OANDA’s spreads at news time… please, trading news and expecting to have a tight spread is just like buying a 250 BHP car and expecting it to guzzle fuel like your momma’s Prius. So yea, you could go broke with OANDA (or any other broker) if your common sense fails you.

My research included a lot of hours spent on major forums to get the overall feel of this broker. Sure, I’ve came in contact before with OANDA, they’re so big that you can’t miss them, but for this review I also wanted to know what others are saying about them. I didn’t count, but many hours were put into it… it’s hard to separate the good stuff from the fluff.

 

How can you Avoid Going Broke with OANDA:

  • With the risk of sounding like a broken record: do not trade at news. If your fingers are itching to press that Buy or Sell button, be prepared to suffer the consequences – paying a bigger spread.
  • Do not expect the same spreads at news as the ones offered in normal market conditions.
  • Understand that “news time” is not “normal conditions”. If Draghi coughs before answering a question, the market will move like crazy. Although that is not “normal”, it does happen…. Ok, ok, I exaggerated a bit.
  • Do not trade exactly when the trading week opens because that’s another time when spreads widen.
  • The MT4 platform is connected to the fxTrade (OANDA’s proprietary platform) account. Orders on one platform are visible on the other. If you are experiencing synchronization issues on MT4, always check the fxTrade application because it will reflect the real situation. Also keep in mind that MT4 performs a daily optimization (9-10 pm GMT) and restarts itself once the procedure is complete.

 

 

The Good, the Bad and the Ugly Speak

Rage On! Rage On!

I have nothing against other people’s opinions, but come on, make it readable at least. Check out what Tim from Chicago, USA has to say about OANDA [1]. Once you’ve read his comment using the link at the bottom, you will see what I mean. This guy is a piece of work… I wonder how he managed to finish primary school with that level of English proficiency. After all he is from Chicago and last time I checked English was the official language there… and he is not named Igor or Raj so I assume he is not an immigrant. Whether he is a real client of OANDA or not (forgive me if I have doubts about the former), I choose to not trust the opinion of such an organized and clear-thinking person (*apply sarcasm where needed*).

The rage is strong in FX Trader from Canada [1]. He uses more curse words than normal ones so maybe some yoga would be appropriate to calm him. He wants to go to Canada’s federal justice department for having trouble opening an account… wow, really? I can imagine how he turns into Tradezor, Destroyer of Accounts when he starts losing trades and I’m actually sorry for the waiter at the restaurant he goes to: *Rage Guy: Garcon… this tea is cold. MY TEA IS COLD!!! *Waiter: But Sir, you asked for ice-tea… *Rage Guy (now with a red face, eyes popping out of their sockets and veins showing on his forehead): You mother* beep*, you tell me what I ordered, you useless *beep* you should have CONFIRMED it first, I’m gonna stick this glass up your *beep* while I call the FBI, CIA and KGB… and ASPCA and I’m gonna sue you! Nooo, I’m gonna sue the world….

Pardon me if I don’t care about the opinions of such guys and instead choose to believe someone with a more decent tone like Muhammad Ahsun, Gujranwala,Punjab from Pakistan [1] who explains his good experience with OANDA in a normal fashion [1]. Same with Steve from OH, USA who used their platform since 2006 and is very satisfied with them although he acknowledges that no broker is perfect [1].

 

Jedi Mind Tricks Anyone? Jedi Mind Tricks Anyone?

Aggressive traders will be somewhat disappointed with OANDA’s leverage which can go only as high as 50:1. Although this may not be such a problem for conservative, low-leverage traders, to me it’s kind of a drawback. Forex is a very risky business, I hope we all agree here, but if I am willing to take a big risk, I want to have the possibility to make high returns and those are gained using high leverage. The kid in me sees leverage similar to a Jedi Light Saber. Imagine a medieval battlefield: knights swinging broadswords, wearing armor and shields… and all of a sudden, one of them finds a Light Saber that could cut through the enemies like a hot knife through butter. Now the conundrum: should he use it? Of course, there’s a high chance that he will cut his arms off… if he is not careful. Also, there’s a high chance of obliterating his enemies. My choice would be to pick up that glowing wonder and go for it. Sure, risks are high, but so are rewards and after all, we are trained traders, just how our knight is a trained soldier who will realize after the first swing the power and danger of using that sword.

So there you have it: I think leverage should be more flexible. Why not allow 500:1 maximum and let clients choose what leverage to use when they open an account. I am sure it will satisfy a lot more clients. Anyway, while the leverage might not be such a big problem for most of us, it seems like some traders are utterly disgusted by OANDA’s service. I don’t agree, but hey, everyone’s entitled to their opinion, even if it’s Ugly.

 

A History of Transparency A History of Transparency

OANDA is probably one of the oldest FX brokers you’ll ever find, being in business since 1997 and launching “fxTrade”, their proprietary web-based platform in 2001. Back in the day when they started, OANDA was a business to business application service provider and at the moment their services are used by more than 75,000 businesses around the world. Their retail client base is huge and throughout time, “OANDA” became a synonym for “FX trading” making them probably the biggest FX broker in the industry. They were first to offer graphical-based Forex trading, dynamically updated in real time – believe it or not that was an innovation back in 2001 – and the first to offer “pipettes” or fractional pips which is a standard now for almost all brokers. Apart from that, they don’t require a minimum deposit and MT4 can be bridged directly through “fxTrade” (reFquires a sub-account). On top of all that, they are regulated all over the globe by the regulatory bodies of the respective countries and believe me, if I were to write all the name abbreviations of regulatory agencies and license numbers here, you would be extremely bored because the list is a long one. In other words: OANDA is fully regulated by almost all major regulatory bodies you can think of.

Although some clients complain about their wide spreads during news time, OANDA offers in our opinion some of the best spreads available and maybe the best thing about it is the transparency offered: spreads are shown on their website in real time. Some brokers show you a list of spreads available during “normal conditions” but they don’t say anything about “abnormal” conditions. Well, all this changes with OANDA because you can check their spreads during news releases or any other abnormal conditions even before you deposit: http://fxtrade.oanda.co.uk/why/spreads/live. You will also be able to find a tool which shows you Minimum, Maximum and Average spreads during a certain period: http://fxtrade.oanda.com/why/spreads/recent.

 

 

Editor’s Note: Is OANDA a Scam?

If OANDA is a scam, it’s one of the most elaborate scams ever invented. How can they be in business since the previous millennium and still be a scam? If that were true, you would expect someone to do something about it… sue them, spread the word, something. There is only one possible answer: OANDA is NOT a scam.

 

Bottom Line: Would I Trade With OANDA? Yep!

If they increase the leverage, then yes, I would definitely trade with OANDA. Call me reckless, but I like to use a higher leverage or at least I want to know it’s there and I can use it if I choose to. They are the most transparent broker I know of and that’s a major plus. On top of that, they are a very well capitalized company and this tells me one thing: they don’t need to steal from me and you… their pockets are full enough anyway.

 

References

  1. OANDA on FPA

 

Have We Saved You From Going Broke?

  • Simon

    I notice OANDA charge for the withdrawal of your own funds from your account.

    Has this been taken into account when making your assessment please?

    How do they compare in your opinion on overall value for money please?

    Thank you.

    Reply
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