Is OANDA Exactly What it’s Cut Out to Be?

Existing and serving the trading industry for a good 24 years, OANDA is already positioned as a stable brokerage firm that has in its employ a decent number of trading instruments and highly reliable trading platforms. 

However, popular opinion thinks that its services could be better. To get a pulse as to why this is being thought by a number of traders online, the review team had looked into the following facets of the firm’s services:

1. The regulatory bodies that sanctions OANDA’s trading activities
2. The trading instruments accessible through the firm
3. The fees charged for OANDA’s services
4. The trading platforms that the firm offers
5. The order types that OANDA makes available

About OANDA

Founded back in 1996, OANDA is a brokerage firm that administers all of its trading activities through its framework that it works with everything that has to do with currency. And true enough, the firm provides services for Forex data and currency conversions among many money-related operations.

OANDA is regulated by two trusted financial authorities: the Financial Conduct Authority (FCA) in the United Kingdom and self-regulatory organization, the National Futures Association (NFA). Clients are provided with additional assets for clients’ protection. The amount in consideration is £85,000 which the firm is able to give through its stringent obedience to the Financial Services Compensation Scheme (FSCS). OANDA is also registered under the Commodity Futures Trading Commission (CFTC).

Unlike many brokerage firms, OANDA actually caters to traders who are based in the United States. It even ranks second among the best Forex brokerages in the country in accordance to the CFTC Retail Obligation Report.

With these regulators sanctioning OANDA, it is apparent for traders to think that the firm is legitimate. These regulators plus the considerably long industry tenure that the broker has is enough for people to be convinced that the brokerage runs a tight ship that has no room for any fraudulent activities.

What is left now is to look into specific services and offers that would benefit its clients. 

Offers and Services

Accessible Trading Instruments

As already mentioned, popular opinion has it that OANDA’s offerings are quite thin, considering its tenure in the industry. The instruments traded through the firm include, Forex, Bonds, Precious Metals, Indices, and Commodities.

The review team actually thinks that these instruments would already suffice in building portfolios for novice traders. The only area of improvement that the team could see is just a tweak on the number of Bonds and Indices that OANDA traders can access. 

The fees that OANDA charges its clients are not as noteworthy as its services. It might be noteworthy for all the wrong reasons.

For one, automated engine is used to follow global pricing through the firm despite the spreads still being at the mercy of market volatility and liquidity.  The flipside is that the firm does well in making historical spread data public for all the assets that it gives access to.

OANDA does not have a minimum deposit declared for account opening. However, it is clear for the more seasoned and experienced traders that such are reliant on the margin requirements of the smallest trade size. 

To be direct, the pricing options offered by the firm, while simple can also be viewed as too limiting in that it is categorized in only two types: 

1. Spread-Only

Able to gather profit through the crossing of customer trades on the bid/ask spread

2. Core Pricing with Commission

Adds a base commission of $50 per million to the raw spread

Commissions through these options are posted as cash adjustments on client accounts.

There are also monthly inactivity fees of 10 units of the currency within the client’s account should he or she not have any trading activities within a year.

Offered Trading Platforms

OANDA offers two trading platforms:

1. fxTrade

This platform is considered to be OANDA’s proprietary trading software. Both the review team and popular online opinion agree that the interface is well-built with a neat design. It allows for convenient access of trading assets, tools, order types, and analytics for accounts. Charting is also available through the desktop version, Tradingview. Research is also made convenient through the inclusion of MarketPulse and the Technical Analysis tool, Autochartist.

2. MetaTrader 4 (MT4)

As already known by many in the trading landscape, the platform, MT4 is able to render good trading conditions through its offering of multiple assets, customizable tools, Technical Analysis implements, analytics, and a clean intuitive interface.

Probably what stands out with regard to the trading platform offerings is OANDA’s one-of-a-kind functionality wherein the clients are given the option of setting trade defaults for assets reliant on the amount of base currency, leveraged NAV percentage, or the amount in the account’s currency.

What the functionality ultimately permits is the ability to render greater flexibility to clients with their trading endeavours.  

Order Types

Through the trading platform, fxTrade, OANDA grants four types of order, namely Market Order in which trade requests are executed through the dominating market rate, Limit Order, a pending order, Stop Order, another pending order, and Stop-Limit, a pending order that sees traders selecting upper or lower bound for execution.

OANDA: Conclusion and Recommendations

It is to the opinion of the review team that trading with OANDA is recommendable. Their reputation is solid in that it is being regulated by trusted regulatory authorities and had not gathered damaging reviews from the trading industry. The trading platforms that the firm offers are highly reliable and efficient. 

The only point of improvement that the review team sees is the addition of more trading instruments and a rethinking or readjustment of costs for services.