Currency Secrets

I get a lot of spam and junk email in my inbox every day so I usually don’t pay attention to new forex sites that spring up over the place, however, a couple of my subscribers have added comments on this site about a popular forex broker review and free forex signal service at Forex Bastards.

So, this weekend I decided to go and check it out. I signed up for Forex Bastards’ free forex signal service and read some of their popular review pages on forex brokers, forex education, and forex alerts.

Having perused the site I liked the similar views held by the owner of Forex Bastards, Felix Homogratus (not his real name), on Oanda – that being: Oanda is the best forex broker out there (but not perfect). Another interesting thing I found about Felix’s site was the economic announcement portals he uses to obtain the latest released figures. If you’re someone who isn’t using Bloomberg or Reuters to obtain your economic figures and you need these numbers with your forex trading strategy (and you can afford the hefty monthly fee) then you’ll want to subscribe to Felix’s signals and read what he has to say. Lastly, I had a good laugh at his “Forex Scams” page where he listed popular forex brokers such as AC-Markets, Refco, and FXCM on this page!

Probably the most interesting thing about Forex Bastards was Felix’s braodcast email that he sent out on the weekend on an interview he had with Richard Olsen, CEO of Oanda. I’m probably not at liberty to copy the entire email here, but what struck me was the fact that with Felix’s news announcement strategy (where he takes a direction as soon as figures are released on popular news announcements and then proceeds to exit that position within ONE minute of it being opened) was that Oanda were willing to take a loss with the positions he was taking (due to the fast moving market)!!

As Felix has had some success with this news announcement strategy he was looking to increase his position sizing to see if he could make more money with it, but after realising the cost to Oanda of his strategy he concluded after the interview that he would maintain his current position sizing and continue to withdraw his profits on a weekly basis.

In a way it reminded me of the days when forex brokers guaranteed stops and traders, such as myself, were able to make good money trading volatile announcements such as the Non-Farm Payrolls by strangling either side of the currency – unfortunately this strategy was nullified when forex brokers no longer guaranteed stops and we all experienced slippage of between 30-50 pips!

I similarly think that Felix’s news strategy will not last long at Oanda, as I haven’t heard of too many brokers willing to take a loss on behalf of their clients. Things that make it even worse for Felix are the fact that he has a large subscriber base where he details his strategy before the event and no doubt some of them use his strategies on Oanda too – all it will take is one person with a big enough bank to nullify this opportunity for everyone else.

For those using Felix’s strategies: take advantage while the opportunity exists, but don’t think it will last forever (although for your sakes I really hope it does).

Well, it seems it has been ages since Oanda’s last platform update, but as of 18th July 2005 Oanda have a new beta version of their FXTrade platform which they originally have been using in their FXGame but have now moved it over for live account traders.

Some of these new features include:

• You can select chart views (basic or advanced). The advanced chart view allows you to see the bid/ask/average price of the currency being displayed.
• There is now a quote panel similar to that seen in FXCM
• By placing your mouse cursor over the quote list you can bring up a sell or buy order according to which side of the quote list you click on
• There’s BUY and SELL buttons in the lower left hand corner of the chart
• They’ve seem to got rid of their annoying news ticker and replaced it with a much better news platform (I isn’t real time… yet… coming soon)
• Changed the format of the user preferences section – a bit cleaner and easier to navigate now

The most exciting change is the news!! I can’t wait until it becomes real time!!

Apart from that I can’t see any other changes, if there are other great ones please post them into the comment section below.

Even if Oanda isn’t a forex broker that is suited to your forex trading needs then I would highly recommend that you set up an account with them regardless!

Why?

Well, as far as I know – and correct me if I’m wrong dear friends – Oanda are the only forex broker that allow you to trade 24/7. Most forex brokers, especially the main players that I’ve reviewed, only operate between Sunday 1700 NY EST and Friday 1700 NY EST.

What happens if something happens over the weekend?

That’s two days of NO trading activity – nearly 30% of the week is taken up during the weekends… but does that mean that because the forex broker’s are closed the world closes too?!

Of course not.

If something occurs over the weekend, by having instant access to a market quote you can amend existing orders or enter new ones… and even if you don’t use Oanda you’ll at least be able to enter into trades that will hedge existing open trades from your closed forex brokers.

Think about it.

The second largest forex forum that I frequently visit is the Oanda FXMessage Board.

I like this forum for several reasons:

• It is hosted by the forex broker: Oanda
• Oanda’s director and staff occassionally visit and post in the forum
• Quite a few experienced forex traders visit and post
• Great way to find out if any problems that you are experiencing are also happening to other people

If you have an Oanda account then you’ll want to frequently visit these forums.

Oanda Home Page

What’s The Attraction?

What attracted me to Oanda was the ability to trade any lot amount. As most brokers only allow users to trade either the standard (100k) or mini (10k) lot size Oanda is a breath of fresh air.

One other thing that attracted me to Oanda was its own user forum and plethora of information – it sure is one content rich web site! Whatever you are looking for regarding the forex market I am sure you will be able to find at Oanda.

Live & Demo Differences

As with other platforms we found no difference between the demo and live accounts, bar the reset button for demo accounts – I wish they would implement that button in the live
accounts too!!! Another excellent feature of Oanda’s demo account is that it never expires.

What We Liked About Oanda:

The charting package that came equipped with the platform was not bad. It wasn’t the best charting package we had seen, but it altogether was not the worst either. Some time frames that we like to monitor were not available which was disappointing (time frames that are not available include: 10min, 15min, 2hr, 4hr, 8hr, 12hr, 1week, 1month).

Oanda has the capacity to have multi-denominated sub accounts other than in USD with no minimum deposit. The different currency accounts available include: AUD, EUR, JPY, GBP, CAD & CHF and allows the user to transfer between their primary account and their sub account easily with the only restriction being that you cannot externally withdraw funds from a sub account, it must all come out of the primary account.

One other little thing that might go unnoticed by others is that Oanda display the volume currently available at the current market price. It is only seen when you place an order – it can give you an idea of what size order can be taken.

The orders screen is nothing new, however, where the orders can go is unique. Oanda do not have any restrictions on how close you can place a stop or limit order to where the current market is (I have experienced placing limit orders within the spread)!

Similarly there are no real restrictions on attaching stop and limit orders bar just covering the spread and adding one pip. Orders also have a variety of expiry times allowing you to place an expiry time of 1 hour (the earliest) to 1 month (the largest) on your orders.

Added to those features we also have Oanda paying us interest by the second for currency positions that do accrue interest – obviously it works in the reverse for positions that require us to pay. AND they also pay interest on a daily basis on your account’s capital.

What We Didn’t Like About Oanda:

The highest leverage available from Oanda is set at 50:1, which you can change to 40:1, or 30:1, or 20:1, or 10:1 if desired. We would have preferred at least the standard 100:1 leverage.

It has been stated in other forums that you will encounter more slippage with Oanda, but I personally have never enountered this slippage. However, do keep in mind that Oanda clients do experience
both negative and POSITIVE slippage – it just depends on which side you sit.

The news package offered by Oanda is not the best we have seen and could be much better. I personally think that all a forex broker would need do is have streaming live news headlines on their platform – nothing fancy, but effective in providing the latest news. Oanda do have streaming news, but it’s some weird UBS feed that doesn’t display relevant economic headlines.

Oanda is also a web based platform. I personally have never liked web based platforms, I prefer to have the platform physically on my hard drive, but that’s just my view.

In summary then…
Oanda PROS:

• Charting package okay
• Platform not bad
• Can trade any sized lots (not restricted to the $100k and $10k lots imposed by other firms)
• Account can be denominated in any currency & you can have multiple sub accounts in any currency too
• Demo account that doesn’t expire
• Active user group forum
• You can place stop and limit orders right up to the current market price bar a couple of pips
• Orders can have a range of expiry times
• Tight spreads on EURUSD (~1.5 pips!)
• Interest earned on positions by the second (for currency positions that do accrue interest)
• Interest paid daily on account capital

Oanda CONS:

• 100:1 leverage NOT offered
• Interest paid on positions by the second (for currency positions that do require you to pay interest)
• News & charting package could be better
• Slippage can occur on stop and limit orders more frequently than would otherwise be exhibited at other forex brokerage firms (can be a positive if you place limit orders)

Our Oanda Rating

Oanda is another forex broker firm that is heading in the right direction. I think you will begin to see many more advancements with this firm in the future as they seem to take a lot of what their customer base recommends to heart. I personally recommend Oanda to everyone that starts out in the forex market.

As you can see from the summary above there aren’t too many major negatives that weigh Oanda down, and that is why we have given it quite a good score. If Oanda can implement a trailing stop feature, offer 100:1 leverage and can allow OCO type orders I think we would have a near 10/10 broker!

What has been your experience with Oanda? Add your comments below