Here's some information that may help one understand Oanda policy. "A conversation with Oanda CEO. I personally use Oanda right now as my forex broker, and I am in complete love with it. There is no other broker that I know that's better than Oanda for news trading, because Oanda has one step execution, so I just click buy or sell, and I am in the trade, most of the time before the spike even starts happening during the news. I don't set their boundaries, and I've never had a reject on a trade, and never really had any slippage. The only thing is Oanda widens their spreads during the news releases...the highest I've seen was 12 pips...but I am now hearing that some people witnessed a 15 pips spread on the GBP during this week's ppi numbers. The high spreads never bothered me much, because I mostly trade EUR/USD, and the spreads usually don't go higher than 5 to 7 pips on that pair during the news. And whenever I trade the GBP, the spreads do get usually 10 pips average, but the pound has such big range, that it moves usually at least 40 to 50 pips after my triggers are hit, so that 10 pips spread simply becomes a normal business expense. I've normally been trading with Oanda about 400,000 per trade on average, and I usually shoot to make about $2,000 per week in profits. I've been so successful doing this, pretty much having absolutely no negative trades on the news releases that I wanted to increase my trade lots to 2 million, and start even taking some managed funds possibly. One thing that worried me was that there was no other broker that was consistently filling people during news before the spikes. Most of them have 2 step executions which make it pretty much impossible to get in before the spikes, others have terrible slippage, and others don't let you exit the trades once you are in them during the news. So bottom line was that Oanda was the knight in the shining armor for my trading style. However, all these other broker problems always made me worried, that once I increase lot sizes, Oanda will stop filling me and will start slipping me like everyone else. Therefore, I decided to call Richard Olsen, the CEO of Oanda, and talk to him personally about what I do, how I trade, and how most of my subscribers trade, and see if it would be a problem for me to increase my lot sizes to 2 million, and still get filled the same way, and if my subscribers could still feel safe with Oanda about this way of trading. I called Richard last Friday, July 7th, he thanked me for the concern and call, and said that he'll review my account and will get back to me, and I told everyone that I'll email you once I talk to him second time. And here is why I am writing this email... So this week we've been playing phone tag with Richard, but I finally got to talk to him Thursday morning. Richard told me that the way I currently trade with getting in before the spike, and exiting usually in less than a minute, is more taking unfair advantage of their technology than it is news trading. In order for me to understand what he meant, he told me exactly how Oanda operates behind the scenes. Pretty much Oanda doesn't trade against their clients, what they do is for every trade you or I place, they hedge by taking the same position through the central feed. And that's done automatically through their software. So supposedly they really love profitable traders, because they make most of their money on the spread, and since they hedge, to them it really doesn't matter whether a person is profitable or not, except they understand that when the person is profitable, he'll be doing more trading, which means more spread commissions to Oanda. So bottom line is Richard said that Oanda wants everybody to succeed and it wants to create a fair environment where to them they actually get happy when they have profitable traders. However, news times are an exception to that. Because what's happening during the news times, is let's say I see the number during news that hits my trigger, and the EUR/USD is at 1.2700, I buy the EUR/USD, because let's say the report is bad for the dollar, the EUR spikes to 1.2740 within a matter of seconds, I exit my trade, and I am a happy camper with a profit. What's happening with Oanda, is they fill me on 1.2700, by the time their software is able to hedge that position, the market already moved let's say to 1.2725, so they hedged my position at a 25 pips loss to themselves, which means they have to pay the profits to me out of their own pocket. The reason they've been widening their spreads is to try to compensate for that. But since the market moves so much during these news, often times 30, 40, 50+ pips within seconds, no matter how wide their spreads are, if somebody is quick enough to enter and exit with a profit like I do, Oanda usually still end up losing money. So bottom line was, I asked Richard what he suggests I should do...and he asked me to keep my positions a bit longer, perhaps 5 minutes or so, and not exit within 30 or 45 seconds. Then I asked him...well, what if I have a stop/loss and a limit, and one of those gets hit within a minute or 30 seconds. He said that it's part of business, and he understands a stop/loss or limit being hit. I asked him...well...if I continue doing what I am doing without changing anything, will you suspend my account? He kept saying that he doesn't want to do it, and kept asking to please work with him on this, and all. Then I asked, well...what about my subscribers...I have referred probably over a thousand of people to you, and most of them trade the same way I do...are you going to suspend them? He said, they'll take it on case by case basis. They don't like to suspend people, and try to avoid that as much as possible. Then I asked...well what if someone is extremely profitable at this news trading...will you purposely slip them or widen their spreads more than anyone else's? He said that Oanda doesn't discriminate against their clients on individual basis. What one person gets, everyone else gets. They won't put anybody on manual execution or do any other dirty tricks. The only thing they can always do is ask client to close an account with Oanda."
Morning gejay, thanks for the information you provided, this is interesting stuff. I trade pretty much the same way as you described. Hope Oanda will not change their way of execution. The only difference I see is, that I set stop prices before news, once they are triggered i take profit manually or by take profit/stop loss. As I said, hope Oanda will not change their policy. Keep us informed. Cheers Ballyhoo
Perhaps you should have asked him anonymously. Now you're going to have countermeasures taken against you for sure.
Gejay and Ballyhoo, I would highly recommend you to learn how to trade other than news. You won't be able to trade size this way. And after some time, even small account might be suspended. You need to realize that Oanda is not a true market, it is a virtual buffer between you and the market. Go to globex and try to get a sized fill right before news come out. Might be not easy. redduke
Here is the thing i dont understand,why is so important for oanda that you keep position a bit longer? If you buy during the news and because of fast market they hedge with 25 pip loss ,how can oanda return 25 pip loss if you hold for 5 min instead 45 sec? Maybe they cant prevent the loss and just try to limit lag traders like you by making you hold for 5 min.
"technics used by market makers ?" http://www.elitetrader.com/vb/showthread.php?s=&postid=1135907#post1135907
Well I can see that I made two mistakes: 1. Trying to shed some light on the subject 2. posting the thing to begin with Live and learn!!! Ya'll have great day. No matter how you trade!
Supposedly, their computer hedging program cannot keep up with such a trade. The trade falls in between the crack. By the time one opens and closes the trade their computer is still trying to hedge it. Other than that I don't know, so let me Run Away!