Not that I make much money (yet), but anyway: You can view the spreads for the last week here. The spikes are pretty high, but the average (red dots) is lower. Concerning execution, you are filled at the new quote from the server. Except if you had bounds in place, in which case your order will be cancelled if the quote is no longer available.
Misha7 : 1) Why are you talking about the "Interbank" (aka Inter-bank, or as some genius put it on another forum "Innerbank" )?? Is Oanda a bank? No. 2) The Interbank spread is not "1 pip". It varies, can 1 or 2 or more depending on market conditions. But you see that don't matter 'cause Oanda is not a freaking bank. Get it? I can bet you anything that Oanda gets on average 1.5 -2 point spread from whoever their liquidity provider is (Deutsche, JPChase, UBS, whatever). 3) EVEN if you assume that you get 1 pip and quote 1.5 (i.e. quarter point on each side) how the f*** are you going to make 0.5 pips? 4) Last time I checked Oanda had no minimum. Try calling Deutsche and selling them yr $1 position as a 'hedge'. This can go on, but it's getting boring. Anyway, no broker will hedge individual trades unless it's a substantial client (e.g. 10 mil and up). There is just no physical way to do it with rapidly moving prices, hundreds of trades per minute and miniscule volumes for every trade. What they may hedge is the net position of the dealing desk. But considering the amateurs that work on most of these dealing desks (e.g. FXCM, CMS) I doubt that they ever do even that. 1) Oanda is not a bank but a market maker, right ! 2) The AVERAGE interbank spread on the EUR/USD is a little bit above 1 pip (you have apparently never been in the forex dealing desk of a bank) 3) If they can not match the orders internally, market making, they take the other side of the trade and since 95 % of traders lose, they risk is limited again and if their net exposure is getting too high, they hedge in the interbank market(all their spreads on the currency pairs are higher than the interbank spreads) so they also making money on hedging their exposure) 4) Off course they don't hedge each trade done by customers immediately and certainly not your 1$ trade...:0)))) And there is off course no physical way of doing this, that's why it is all automated at Oanda, never heard of computer algorythmes ? Oanda has no dealing desks ! First get your facts straight , before you start talking GET IT NOW ?
No, I've never heard of "algorythmes"....) (maybe algorithms?) OK, you've just agreed with everything I wrote and provided a rather messy description of the standard mode of operation of any dealing desk. How does that prove that Oanda "does not have to trade against customers"??? This was, let me remind you, the sole purpose of your original post. I am not saying that Oanda manipulates quotes or that I have any reason to doubt their ethics but can't you see that the LOWER the spread you are offering, the HIGHER the need to bucket trades?
I am also interested in knowing what kind of size of account they can take. If one opens a 100k account and make 40% per annum, would that be a problem for them? especially if it is true that they are bucket shops and do not hedge their positions? How about a $1 mil account, is that too big for them? Can they be expected to quote 1-1.5 pips on these accounts?
Good point. Oanda must hedge their positions and be telling the truth. I believe their computer consolidates their exposure into the correct size to be able to block out hedges incrementally. Oanda is growing without advertising at a slow and steady pace. Their capital requirements must be managed to match their growth. They seem to be building at a slow and steady pace, becoming a strong, dominant market maker. I have no affiliation with them and have my complaints too, but they still are the best game in town. If they are "cheating" its not blatantly... Michael B.
Rank order complaints: Variable spread. Antiquated Charts. Slow to upgrade enhancements on platform and charts. For example, still no audible alerts yet. No dealing desk and anybody in Customer Service that knows about trading. Michael B.
Thanks. Slowness would be an issue as I trade when markets are at their most volatile. The free add ons though are not an issue as I pay for 2 news services and a chart package seperately.
Oh, not that kind of slowness. I think ES was referring to the company's pace of new features implementation, such as trailing stops, etc. When it comes to volatile, fast-moving markets, Oanda's platform usually remains both stable and tradeable, in my limited experience with them. As long as one's strategy is compatible with the widened spreads, e.g., no scalping for a few pips. Those spreads can be expected to widen, in a predictable, known way, from at least a few minutes before to at least a few minutes (or longer) after a potentially market-moving news event.