Hi all, I want to start testing my system with real money and I been considering which broker to use. I trade only forex but might go to stocks and futures in the futures. I read some good reviews on oanda but had an account with IB on stocks and also liked them. Oanda: Reasons to take: 1) Low spread (1-1.5 on EUR/USD USD/JPY - tested in real time) 2) Offer historical tick by tick data to those with 1000$ account (very important in order to develop my systam) 3) good reviews Reasons not to take: 1) Old trading system 2) Doesn't offer API 3) Trading only forex IB: Reason to take: 1) Claim they offer a very tight spread (0.5-1 on EUR/USD and USD/JPY, wasn't tested in real-time) 2) Offer API 3) A good software and charts 4) Trade stocks and futures Resons not to take 1) Take commsions on FOREX trades, not only the spread 2) Doesn't offer historical data 3) Account minimum is 10000$ Since low spreads and good excution is highly important for my system I'd like to hear from you guys about your exprience with either brokers and any other points I need to think about. Leverage on both brokers in only 1:50 whoch is a real con but i didn't find any broker that offer this tight spreads with higher leverage. TIA Amit
OANDA = trading desk = bucket shop (have to say Oanda is the best of all the bucket shops) IB = No Dealing Desk + STP + ECN read here: http://www.100forexbrokers.com/stp-ecn-brokers
Plenty of historical data on my end. Actually IB is 40:1 maintenance on base currency major pairs, 20:1 on crosses. MBT offers 100:1 across the board with similarly tight spreads, but commissions are 2.5x higher than IB's..
I've done both of the two of them I prefer oanda cause IB tends to get awfull slippage from time to time (I use a really tight stop) and the commission costs add up if you are very active; if you are trading euro however euro-future seems the best vehicle for active trading.
Go with Oanda if those are you're only two choices and spot is what you're looking for... I'm pretty sure they have an API as well but it cost about $600 a month if you're not doing decent volume... IB is ok but if you ever try to do a yard of trading there you'll learn all about the slippage. Even if you throw arround alot of million dollar lots it can be detremental if you aren't watching things closely. Although I'd second that MBT route depending on how many trades you're doing a month verse profit.
Oanda 1/ Oanda has an API. 2/ their low spreads can get very high, especially around news time or off-market hours. Don't even try weekends (but why on Earth would you do that?) 3/ they often have server down times, although rarely anything critical. But if you happen to be in a 'long shot' trade, its nerve-wrecking even for a log off - log back in routine. 4/ their trading system is not old, its simple. It's a lot better for start-outs to use a simple interface without bells and whistles that would only confuse 5/ as people have mentioned, they're a bucketshop, albeit the best of it 6/ you can get up to 100:1 margin, but why would you even want to go above 10:1, unless you're planning to blow up in the next couple of weeks. IB 1/ their spreads come from the market and they don't make a buck on spreads, only on commish, which are the lowest for retail level guys (and competitive with some institutional level brokers) 2/ buggy, old, unreliable software; very rarely they have problems with the servers though (in my experience) 3/ universal account: you can trade everything from one account, though I don't think it's wise to have only one broker: it's just my taste but I have several backup brokers for anything I trade, including currencies 4/ awful, hideous, dilapidated charts. They freeze, hang, delay, and consume horrendous amounts of system resources. AIA you'll need charting software 5/ as mentioned they offer historical charts, and also, their margin is 40:1 / 20:1 6/ best execution in currencies that I have ever seen. 7/ they can be the dealer that helps you scalp/micro-trade other forex brokers
well cabletrader, i read your article.... 1) i would never trade a currency like an aUD or CAD or something like that... 2) i would never trade curr during news times 3) the statement about high commissions on ECN brokers (2 -3 pips) is simply not corect... look at IBs comm table... i prefer transparency over the subjective feeling of "no slippage"
I was just throwing it into the mix is all, generally I thought it was a fairly balanced article (written a couple of years ago so commissions are probably out of date now, the market is extremely competitive).