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MasterGambler
Registered: Jul 2012
Posts: 68 |
07-21-12 06:02 AM
I just opened and verified an account with OANDA...
I can't seem to find their FAQ.
Never traded direct FX before. Just options, forex futures, and equities.
As far as I know FX brokers have no commissions, correct? They just make money off the spread.
Anyone know what the minimum account size and how their lot sizes work? Just going to try some small stuff while I get used to FX.
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Jack_Larkin
Registered: Jun 2011
Posts: 491 |
07-21-12 06:21 AM
Ok, Oanda is not your 'average' FX broker. They do things a tad differently:
Most FX brokers have a minimum deposit of a few hundred, some a few thousand, but Oanda's is just $1. Can't do much with just $1, but Oanda says that's their minimum.
Lot size wise, most brokers follow standard lot sizes: $100k standard, $10k Mini, $1k Micro... but Oanda's minimum lot size is 1 unit of the base currency of the quote (basically $1, some exceptions.) Can't do much with $1 worth of exposure, but if you want to define your risk through lot size down to the penny, Oanda let's you do this (eg. opening a $34,123 sized position instead of having to round down to $34k at other brokers.)
Positions sizes are really exposure sizes. If you've traded FX futures, think contract specifications in size of the currency in question. Match the total exposure to a given currency, and you've matched the lot size you need to equal one contract in futures.
Oanda has no commissions, just the spread is paid. However a growing trend in the FX broker wold is to go spread + commissions. Brokers will pass on their spread feed from their liquidity providers for you to trade on, and make their cut in commissions instead of marking the spread up and passing it along. But as I said, Oanda is just spread, no commissions, so what you see is to the total cost up front.
Hope that helps. Oanda's a good choice. Just keep an eye on news release, they will widen the spread by a lot during the few seconds leading up to major releases and for a few minutes after... not the best for people who trade news releases.
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MasterGambler
Registered: Jul 2012
Posts: 68 |
07-21-12 06:45 AM
Hmmmm... Ok... Sorry... Still confused, could someone explain this little detail...
In futures you have a certain amount per tick... $5, $12.5, etc...
If you have say $1000 and you capture 10 ticks at 10-1 leverage...
You get $10?
And at 50-1 that would be $50?
Wait a minute... That doesn't sound right... Sounds far under futures leverage...
Then there is a daily interest rate for margin?
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oldtime
Registered: Jun 2011
Posts: 7320 |
07-21-12 08:52 AM
Quote from MasterGambler:
Hmmmm... Ok... Sorry... Still confused, could someone explain this little detail...
In futures you have a certain amount per tick... $5, $12.5, etc...
If you have say $1000 and you capture 10 ticks at 10-1 leverage...
You get $10?
And at 50-1 that would be $50?
Wait a minute... That doesn't sound right... Sounds far under futures leverage...
Then there is a daily interest rate for margin?
leverage is always the same, how much of it you use is up to you.
So for instance in EUR/USD on 100k it is $10 per pip, if you only put on 10k it is $1 per pip.
If you put on 125k like a futures contract, it is $12.50 per pip.
leverage is just what the broker gives you. mine is 40 to 1, yours may be 50 to one, offshore you can get 500 to 1.
unless you are insane, leverage doesn't mean much, it's just how much rope they give you to hang yourself.
40 to 1 is the going rate both for forex and futures.
you are correct, in spot you pay interest, in futures it is figured in to the price
some of us like spot because of the trading hours, and the ability to fine tune size, rather than always working in 125k units
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rtiger29
Registered: Jun 2010
Posts: 158 |
07-21-12 12:39 PM
I would be curious to know how many of you that trade spot also trade forex futures. I wonder if forex futures are a bit easier to trade than spot Forex?
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oldtime
Registered: Jun 2011
Posts: 7320 |
07-21-12 02:12 PM
Quote from rtiger29:
I would be curious to know how many of you that trade spot also trade forex futures. I wonder if forex futures are a bit easier to trade than spot Forex?
easier in what way?
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