Oanda Forex Trading Review: Pro’s & Con’s

Introduction to Oanda Forex Trading

Drs. Michael Stumm, Professor of Computer Engineering in Toronto, and Richard Olsen, The Olsen Ltd. which was a leading econometric research and development firm, founded Oanda in 1996.  Oanda was short for Olsen and Associates and means ‘just in time’ in Turkish.  The gentlemen paid four of Stumm’s students to spend nine months developing Oanda’s initial software.  It was initially created to serve for an internet trading platform in order to automate techniques based on the business’s research in foreign exchange trading.

By the 2000’s Oanda was earning more than a million in annual revenue and raised one hundred million to start developing their own forex trading software.  In 2005, they were processing over 200,000 trades per day. 

Oanda is regulated in the United States, United Kingdom, Singapore, Canada, and Australia. They have eight global financial centers serving clients in over 190 countries and handle more than a million queries on any given day.  Roughly 17% of retail currency trading done in the United States is handled by Oanda according to the registration information provided by the United States CFTC.

Oanda services as an internet-based forex trading and currency information brokerage for retail and institutional clients.  Their currency database is one of the largest in the world.  They offer an above average number of products for trading including forex, commodities, index instruments, and precious metals.

PLATFORMS

FXTrade

This comes in desktop, web, and mobile.  The most important thing with FXTrade is its fantastic execution speed.  This platform can execute nearly all of their trades in less than a minute according to their website. Comes with advanced charting tools and a range of tech indicators used to analyze forex market keeps track of forex industry news and provides effective account management for clients.  Charts from TradingView offers nearly eighty indicators, ability to overlay, and Multicharts.  Have the ability to trade directly from the chart. Also, watchlists, news feeds, economic analysis.

Protrader

  This platform offers everything that the regular forex platforms do as far as advanced charts and technical analysis, the indicators, multiple order types, ability to customize, the option to auto trade.  This platform has created AlgoStudio which is an algorithmic strategy where a user can test different aggregation of data.

MetaTrader 4

A timeless favorite includes advanced charting package, studies, watchlists, technical indicators.  Plus it allows users to automate their trading.

FEATURES

Safety

Oanda is regulated in various countries through multiple ranges of government agencies, the strictest of which is the United States.  They are a registered Futures Commission Merchant and Retail Foreign Exchange Dealer with the (CFTC) Commodity Futures Trading Commission and a member of the (NFA) National Futures Association.  These agencies require strict guidelines to be adhered to which can oftentimes be deemed limiting to traders but can also be viewed as a sign of a secure and trustworthy broker who is regulated by them.

Account Types

  Oanda doesn’t distinguish between different account types.  There is only one standard account for all traders.  With that comes no account minimum deposit for opening account.  You can make trades of any size you would like without any minimum lot size requirement.

Currency conversion

  This is where traders have access to current rates around the world.  There are twelve languages, compare currency rates for twenty-six major currencies with adequate updates on each one of them.

EDUCATION

 Educational videos and articles are available for anyone who needs lessons whether you are beginning in trading or experienced and need some refresher.  There are live webinars that speak on market analysis, platform education, economic analysis, and question and answer sessions.  The Oanda classroom focuses on live market analysis as well as basic platform navigation and analysis.  The advanced content focuses more on how to use the individual tools more so than using the investing tools. There are also demo accounts that will take you through the entire process of an actual trade using all of the tools, platforms in actual real time using fake money so you can test the waters before you get into the game.

RESEARCH

Oanda offers economic analysis, real-time news feeds, calendars, advanced data analytics.

PRICE

Oanda does not charge any commission for their trading provisions nor do they require any type of account maintenance fees.  Traders will pay spread based on real-time market values.  Depending on the currency traded, spreads can start from as low as 1.1 pips.  Brokers make their money through the spread.  During times of high volatility, spreads do tend to widen.

As they are regulated within the United States, their maximum leverage level is 50:1 on forex products which is very low.  This is the CFTC requirement on major currency pairs and for all others it is 20:1.

CUSTOMER SERVICE

Customer support is available to clients twenty-four/seven by way of email.  If you want live chat or telephone support, you will be limited to the hours of Monday through Friday from 1 pm to 6 pm. The customer service is reviewed as being very slow and hold times being very long.  The time-frame that they offer the live chat and phone support is far too narrow and not convenient for folks that have day jobs.

PROS AND CONS

When you are researching and trying to find the perfect brokerage, it’s important to weigh all of the pros and cons of the business.  Read the reviews on their website from folks who have done business with them.  Get references from traders who have or are dealing with them in the past or currently. 

Pros

Accounts can be opened with as little as $1. The system is very easy to manipulate, user-friendly, not a complex layout.

Regulated by major government agencies so there is a level of safety, trust, and security.

Traders can access over 71 currency pairs along with a large range of more asset classes.

Traders can use the MetaTrader 4 or the web/desktop as well as the mobile app for trading purposes.  They have the flexibility of how they choose to do their trading.

There are powerful charting tools available throughout all of the platform methods.

Exceptional execution.  The speed that trades go through with Oanda is remarkable.

The Education and demo accounts offered are beneficial to the new trader in helping them get acclimated to the environment when they first come on board. There are educational tools available for the advanced traders as well that they can use as refreshers or if they are new to the company, will help them learn the system and the tools.

Cons

  • Oanda only works with forex and CFDs.
  • They are not listed on the stock exchange.
  • Customer service is not the best for the clients.  The times that
  • live chat and phone service is available is very restrictive.  On the other hand, email is available 24/7.
  • Accounts have no negative balance protection or any slippage protection.

– The research and news resources can only be accessed by way of launching an external web page or application.

Oanda is a really good brokerage for those who are beginning as traders as well as those who are lower on the budget scale.  This is a good platform for a trader who keeps a low account balance.  They offer trading on forex and a few CFDs so it’s a perfect platform for someone who is just starting and doesn’t need a lot of products to be overwhelmed with at first.  You can still build a diversified enough portfolio, and the 50:1 max leverage boosts the account security.  Oanda is among the top-regulated retail brokers in the world.  This will let you know that you will be safe and you can trust the broker.

Although Oanda comes across as disorganized in many aspects, it still offers a very good set of informative resources.  The platforms that it offers cover the charting and execution needs of the clients it services.  It’s commission-free trading and competitive spreads make it one of the most preferred brokers available on the market.

CONCLUSION

The most important part of any good brokerage is the educational tools that they offer to their traders.  Oanda is serious about teaching the people who come to them for their services the ins and outs of what it means to be a trader before they ever actually start the real-time process.  You don’t have to worry about losing your money because you have plenty of time to prepare by jump-starting with the demo accounts.  Going through the classrooms and the webinars as well as the articles they offer will give you the head-start that you need for when it is time to dive in to the world of forex trading.

Even after you begin trading, you can rest assured that you’ll be able to start slowly until your confidence is secure by investing small amounts.  There is no minimum amount you need to begin with, starting with as little as a $1. 

Oanda is all about letting you learn, be comfortable and be confident throughout your experience until you become one of the professional traders if that is something that you choose for yourself one day.  Their goal is to let you trade at your pace and have it be a pleasant, stress-free experience.

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