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OANDA Review

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Co-founded by Dr. Stumm, a computer scientist and Dr. Olsen, OANDA is FX broker which was established in 1996. The company is registered and/or regulated in a number of locations, including the U.S., Canada, Europe, Asia, Australia and Japan. OANDA Corporation is a registered Futures Commission Merchant and Retail Foreign Exchange Dealer with the Commodity Futures Trading Commission and is a member of the National Futures Association. Clearly, this Forex brokerage is among one of the oldest and most widely recognized in the industry, but does this mean they are one of the best? This OANDA review will help to answer that question.

Account Types

There are two account types available, Standard and Premium. Overall, the two accounts are actually quite similar, with there being only a few key differences. There is no minimum account balance on the Standard account, while the Premium account requires a minimum of $20,000 USD. The Premium account provides direct access to an account manager, along with top priority in service queues, where the Standard account does not. Lastly, the MT4 open order indicator updates every five minutes for Premium account holders, while Standard account holders must wait twenty minutes for updates.

In addition to the two account types, OANDA offers an Advanced Trader Program for high-volume traders. In order to qualify for the Tier 1 Advanced Trader Account, one would need to deposit a minimum of $20,000 USD into their account or trade more than $10M USD in monthly volume. The benefits of doing so include having access to lower spreads, dedicated relationship managers, free wire transfers, access to third-party trading platforms and more.

Two additional Advanced Trader Program tiers are made available, each with increased requirements and increased benefits. The details of each account type are shown below.

Platforms

OANDA provides their own award-winning platform, along with MetaTrader 4. OANDA Trade offers web-based and desktop platform trading, along with an app version for mobiles and tablets. OANDA Trade Web was awarded the World’s Best Retail FX Platform by FX-Week during the 2018 e-FX Awards. The platform offers an impressive variety of options, such as automated trading, risk management orders, the ability to trade directly from charts, one-click trading and more. The interface can be customized according to personal preferences and there is never any dealer intervention while trading. Prefer the standard version of MT4? That too is available.

Leverage

The Commodity Futures Trading Commission (CFTC) limits leverage available to retail forex traders in the United States to 50:1 on major currency pairs and 20:1 for all others. OANDA adheres to these rules and therefore may be unable to extend leverage levels that are as high as other forex brokers. For some, this fact may be problematic. For others, it will not, especially since it points to the fact that this is a brokerages that is registered and regulated in several different countries. U.S. traders can read more about applicable rules on the following page: https://www1.oanda.com/resources/legal/united-states.

Note that the aforementioned leverage maximums apply to traders who reside in the United States. The offered leverage ratios vary by country and account type. For example, the standard leverage for European traders is 1:30 for most account types, but can reach as high as 1:100. Contact OANDA customer support to request the specifics regarding leverage for your location and account type.

Trade Sizes

Instead of offering fixed trade sizes (lots), the OANDA trading platform is designed such that traders may place trades from as small as 1 unit of currency. Thus, this brokerages does not differentiate between standard, mini or micro accounts. One unit equals one of the base currency in any given currency pair. For example, one unit of USD/CHF would be equal to one U.S. dollar and one unit of EUR/USD would be equal to one Euro. In using units, traders are not required to round their position size up to a lot, mini lot, or micro lot.

The conversion is as follows:

  • 1 standard lot = 100,000 units
  • 1 mini lot = 10,000 units
  • 1 micro lot = 1,000 units

Should you choose not to use fxTrade, bear in mind that the MT4 platform does trade in lots. When entering trades on MT4, the standard lot is 1, a mini lot is 0.1, and a micro lot is 0.01.

Trading Costs

Similar to most online forex brokers, OANDA doesn’t charge any commission for their trading services. Instead what traders pay is a spread which is based upon real-time market values. An additional pricing option has also been added, that being Core Pricing + Commission Trading. This option allows traders to access a reduced spread relative to the spread-only pricing account. This means that the traders would only pay a fixed commission per trade. The cost for each trade would then equal the sum of the applicable core pricing spread plus commission cost. OANDA’s core pricing spreads start from 0.2, with a $50 commission charge per 1M.

As for SWAP charges (referred to as financing charges by OANDA), these are calculated using the bid financing rate. When opening a position, you are buying (long) one currency and selling (short) the other currency. Therefore, there will be holding charges/credits on the currency being bought, calculated using the bid financing rate, and need to pay holding charges/credits on the currency which is being sold, calculated using the ask financing rate. In some instances, the bid financing rates will be negative and those cases, there would be holding charges/credits on the currency which is being bought.

Financing rates are determined information coming from various sources, including central bank interest rates and spot-next rollover rates received from OANDA’s liquidity provider(s). Should you have any questions regarding these charges, send an email to: frontdesk@oanda.com.

It is possible to be charged an inactivity fee if your account remains dormant for a period of time. A monthly fee of 10 units of the currency in which your account is listed when there are no newly open trades for a period of 12 months or more. For example, if you have a USD account, the charge would be $10 per month. This charge will continue on until you either close your account, resume trading or your account balance reaches zero. The account will not go into the negative after reaching zero and there this type of charge is not incurred on accounts which have not ever been funded. It is also not incurred on sub-accounts, meaning there will only be one monthly charge per master account.

Assets

OANDA’s underlying asset list is made up entirely of currency pairs and does include quite the variety of major and minor pairs. In total, there are 70 pairs to choose from. While this is perfect for those who exclusively trade Forex, those who wish to trade other types of assets will be out of luck when choosing this broker. Also absent are cryptocurrencies, which have become increasingly popular among traders today. The complete list of available pairs can be viewed on the following web page: https://www.oanda.com/us-en/trading/instruments.

Spreads

Spreads vary by asset, of course, and are always changing with time when not fixed. This FX broker does provide real-time rates and spreads on their website for all assets, eliminating the need for creating a demo account should you be thinking of creating one solely to access this information. The lowest noted spread at the time of this writing was 1.1, which was noted on several of the major pairs. The advertised lowest spread is 0.2 pips. OANDA further provides both current and prospective clients with access to both live and historical FX data at all times. Margin rates are also available and can be downloaded directly from their ‘Spreads and Margins’ web page.

Minimum Deposit

There is no minimum deposit requirement in place, but as always, we do recommend making a deposit that is large enough to actually allow for trading. Keep in mind that the maximum leverage offered by OANDA is 50:1 for U.S. traders and extends to 1:100 at its very highest due to regulations limits. While we certainly cannot fault a brokerage for following rules, this does mean that you will not be able to take advantage of the higher leverage ratios offered by offshore brokers and need to account for this when making a decision regarding funding an account.

Deposit Methods & Costs

Funds can be deposited using debit card (MasterCard, Visa or Discover), bank transfer, check (USD) and automated clearing house (ACH). There is a $20,000 maximum limit per calendar month on card deposits and a limit of $50,000 per deposit on ACH deposits. OANDA does not charge fees on deposits, but does make a point of reminding clients that their own financial institutions may have their own fees on these transactions. The same applies for withdrawals, but we’ll go further into detail on that below.

Withdrawal Methods & Costs

Clients can withdraw funds from their OANDA account via debit card and bank wire transfer. For deposits by debit card and ACH, they do not charge for your first withdrawal in a calendar month. Withdrawals vary by location, as well as by the number of requests being made, as shown below.

Withdrawal requests can be submitted by logging in to ‘manage funds’ using your account details. Bear in mind that withdrawals are subject to the hierarchy rule, which means that if you have deposited funds more than one payment method, you must exhaust the total deposit amounts first by debit card, and then via bank wire transfer.

Withdrawal Processing & Wait Time

Withdrawal requests are reviewed within one to three business days. After a withdrawal request has been approved and paid out, there will be a wait time of up to three business days for card payments to arrive and up to five business days for bank wire transfers to complete (United States). International wire transfers can take longer than this in come cases. As shown above, There are no fees for debit card withdrawals, which makes them a preferred method for many, but do be mindful of the aforementioned maximum deposit limits on this form of payment.

Bonuses & Promotions

OANDA does not offer any type of deposit or re-deposit bonus and is currently not offering any type of trading contest or promotion. This is not surprising for a broker which registered to be regulated in so many different locations, as there are often laws which forbid them. If a deposit bonus is extremely important to you, there are other Forex brokers out there who do offer them. As always, be mindful of the terms and conditions, ensuring that you are 100% clear on exactly what actions are required in order to claim any bonus.

Educational & Trading Tools

OANDA does offer several key trading tools, including the following:

Advanced Charts – Traders are free to use TradingView’s advanced charting solution within the OANDA platform. Indicators and drawing tools include trade through charts and over 65 technical indicators. Market trends drawing tools such as Pitchforks, Gann Fans, Elliott Waves and more are included.

Algo Lab – The Algo Lab algorithmic trading module (powered by QuantConnect) can be used to test advanced technical analysis. It can also be used to backtest strategies or simulate a real-time trading environment using historical market data dating back to 2004.

Technical Analysis – Automatic chart pattern recognition and pattern quality indicators allow users to scan the markets. Technical Analysis (powered by Autochartist) is a web-based charting app accessible within the OANDA platform. Additional options include intraday market scanning, performance statistics, market volatility analysis and much more.

Economic Overlay: Allows traders to receive updates on key economic announcements and events. Global economic overview, customized views, reference results and more are provided within both real and demo accounts.

MotiveWave: Oanda has partnered with MotiveWave to offer a professional charting analysis software to their clients. MotiveWave’s advanced charting capabilities offer strategy backtesting, strategy optimization, replay mode, backtesting reports and more. Available for both Windows and Mac systems.

Dow Jones FX Select: This tool provides real-time market news, expert trend analysis, and in-depth policy commentary from Dow Jones business news reporters and editors. Dow Jones FX Select is offered in a variety of languages.

As for educational resources, OANDA’s “Learn” website page contains links and information regarding trading basics, strategies, capital management, webinars, special events and more.

Customer Service

This brokerage has branch offices in New York, San Francisco, Singapore, Sydney, Tokyo, Ontario and London. There are several contact options available, including telephone, email and live chat. It is possible to send an email directly from the OANDA website, as well as to request a callback. The hours for live support are 24/6, or whenever the markets are open for trading. Want to search for answers on your own? You’re certainly not alone in this. Visit the OANDA FAQs, which is loaded with popular questions and answers and where you will most likely find all the information you need.

Demo Account

A demo, or practice account is offered. To sign up for a demo account, you will be asked for your name, email, desired username and password, phone number and country of residence. Demo accounts can be reloaded with funds and never expire. Once you have registered and are ready to add the practice account, simply follow these steps:

1. Log in in to your practice account on the OANDA website
2. Click on ‘Add Sub-Account’
3. Select the ‘v20 MetaTrader 4’ account type
4. Create a account password, set name and account leverage and click ‘Save’
5. Note your login ID and server name for future use
6. Click on ‘Deposit’ to add virtual funds to your demo account
7. Download the MT4 platform
8. Click on ‘File’ and select ‘Login to Trade Account’
9. Select the correct trading server, enter your login details and click ‘Login’

Note that your server name will be listed in your account back office in the ‘Account Summary’ area. Should you need assistance with creating a demo account, contact customer service.

Countries Accepted

OANDA accepts traders from Australia, Thailand, Canada, the U.K., South Africa, Singapore, Hong Kong, India, Germany, Norway, Sweden, Italy, Denmark, UAE, Saudi Arabia, Kuwait, Luxembourg, Qatar and more Traders who reside Belgium, France, Netherlands and Cyprus are not allowed to register with OANDA at this time.

OANDA has attained licenses from major regulatory jurisdictions in each of the following countries:

  • United Kingdom – Financial Conduct Authority (FCA)
  • United States – Commodity Futures Trading Commission (CFTC)
  • Canada – Investment Industry Regulatory Organization (IIROC)
  • Japan – Financial Services Agency (FSA)
  • Singapore – Monetary Authority of Singapore (MAS)
  • Australia – Australian Securities and Investment Commission (ASIC)

Conclusion

The pros of trading with OANDA are many, but most will point to the fact that they are licensed in many locations and therefore held accountable for their actions. There are other benefits, of course, such as their solid trading platform, host of trading tools and education resources, transparency with pricing and fast payment processing. The only true con would be that currency pairs are the only asset type being offered, but this is not really a problem, as traders are not limited to trading with only one broker. OANDA is widely viewed as being one of the most well-established and trustworthy brokers in the industry and it’s easy to see why this is.

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