Oanda Forex Broker. Oanda is a Canadian broker that has been operating since 1995. It is considered one of the best markets makers in the world. It applies a policy of transparency and low spreads, which has made it a winner of great self-esteem among forex traders, based on that policy is one of the few brokers who do not have affiliation programs, which is the favorite formula for forex brokers to get customers.
As a broker, Oanda is subdivided into five companies that serve almost everyone:
- Oanda Asia Pacific (Singapore)
- Oanda Corporation (Canada)
- Oanda Europe (United Kingdom)
- Oanda Japan (Japan)
- Oanda Australia (Australia)
Due to this geographical diversification, Oanda complies with all the regulations required in each of the places where it operates:
RFEF (Retail Foreign Exchange Dealer), CFTC (Commodity Futures Trading Commission), FDM (Forex Dealer Member) and NFA (National Futures Association).
CMS (Singapore by the Monetary Authority of Singapore), and The International Enterprise Singapore, for Trading with Cfds.
IIROC (Investment Industry Regulatory Organization of Canada)
In Japan it is licensed by the Japanese Financial Services Agency, and is a member of the Financial Futures Association of Japan.
ASIC (Australian Securities and Investment Commission).
In compliance with the rules of financial regulators, Oanda is required to submit its accounts for audit.
Security of funds deposited with Oanda Broker
The biggest problem that Markets Makers brokers can have is the lack of capital to face the margins.
According to Oanda, they cover the required margins and go a little beyond the limits set by the regulators.
But since we don’t have to believe what the broker wants to tell us, we have to pull regulation and Oanda belongs to the CIPF, Canadian Investor Protection Fund, which protects depositors’ funds up to 1,000,000 Canadian dollars, for accounts opened in Canada. The accounts opened in Europe are normally done through Oanda U.K., and in this case the funds deposited in the accounts are protected by the FSCS, which is the compensation program of the United Kingdom, and the protection of the funds reaches 50,000 pounds.
As an ancillary measure to protect clients’ funds, Oanda maintains separate accounts for its clients’ money.
Commissions and Spreads
Oanda has a floating spreads policy, which translates into a reduction in costs when the market is calm and a widening of the spread when volatility increases.
At first glance, this may seem counterproductive to traders, but not so much to those who have calmer strategies, to the detriment of those who perform scalping (in Oanda, scalping is allowed).
The EUR:USD pair, which is one of the most traded in the world, has a minimum spread of 1.2 pips, the GBP:USD, 2.2 pips and the USD:JPY, 1.3 pips, which at times of volatility in the EUR:USD can reach 4 or 5 pips.
To check how these spreads work, the broker provides clients with a tool to check the historical and real evolution of the spreads in all the currencies that can be traded.
Brokers markets-markets have a trading desk, but Oanda has automated the process so that there is no direct intervention by the broker, but rather the spreads are calculated according to the volatility and liquidity of the market, fixing prices symmetrically and automatically.
For those traders who are looking for quiet medium or long term operations, Oanda charges for the maintenance of the open operations, something logical since we are working with borrowed money and they only charge us when a day passes.
The commission for this type of operations varies according to the currency pair on which we are trading. The broker provides traders with a calculator in which to assess the cost of maintaining an open trade.
Leverage margin Oanda
Oanda has always had a very conservative policy regarding the leverage margin it allowed its clients to use.
Oanda’s traditional margin has always been 1:50. The broker argued that a higher leverage margin would cause greater losses for his clients, and has always been reluctant to raise it…until now.
As of this week, Oanda has increased the leverage margin to 1:100, twice what has been allowed until now, and does so “according to the broker’s claims”, listening to the traders’ recommendations, which asked for more room for manoeuvre.
The truth is that it is difficult for a broker to fight in such a competitive world, in which some brokers offer leverage close to 1:1000 and it is very common to leverage 1: 100-200.
There is also a rumor behind the news, and is that the Broker may be thinking of going out to quote.
Oanda Trading Platforms
All large brokers have at least two trading platforms available to their clients, as is the case with IG Markets.
One is the Metatrader, and the other is usually of its own creation, in the case of Oanda is the FXtrade, the two available to trade from the computer and from the mobile phone.
Metatrader has little to say, it is the world’s best-known forex trading platform and is used by most forex traders.
It is a platform you have to get used to, if you want to trade certain strategies that require automation of operations, such as using robots to launch orders, or using strategies that need very specific indicators, such as Grid Trading, indicators to search for boxes of sessions, etc..
FXtrade is an online platform, which is not downloaded to the computer, unlike Metatrader.
The broker, from his platform, allows us to be up to date with the latest financial news, directly from Dow Jones International or UBS Analysis.
From the same account, we can have access to several sub-accounts, being able to transfer funds from different currencies, which allows us to maximize our funds depending on the movement of the currencies themselves. It can also be useful if we trade on someone’s behalf, or want to have separate accounts to test strategies.