Breaking Down OANDA's Tight Spreads

Hernandes: As a market moving broker, OANDA offers trading on four instruments: Forex, indices, commodities and precious metals. Although only 38 Forex pairs are available and only the MT4 trading platform is supported, this broker offers three account types. Available accounts are Demo Account, Standard Account, Core Account and Swap Free Account for Muslim clients.
According to your question, the Core Account offers a much tighter spread of 0.2 pips, but charges a reasonable commission of 4 USD per lot. So you understand, right? The commission that is charged $ 40 per million, if calculated again per lot, is only about $ 4 per lot. Please note that the normal commission fee is $ 7 per lot, while in your main OANDA account it is below this value, so yes, the commission is already low.
But what you need to worry about in OANDA accounts is that the minimum Deposit for a Core Account is 5000 USD. In my opinion, this is quite high for trading, both beginners and experienced. Maximum leverage is set at 200:1. The base currencies for trading accounts include USD, EUR, SGD and HKD.

Shamila: Overall, brokers determine the spreads they offer on currency pairs based on a combination of market conditions, liquidity, their own costs and profit margin, and the trading volume of their clients. SO, it is not just add some modification of the spread with proftbale but also many factor included and more detail, I can list at below :

• Market condition, The most important factor affecting spreads is the supply and demand dynamics of the market. If there is high demand for a particular currency pair, the spread can be tight, which means that the difference between the bid and ask prices will be smaller. Conversely, if demand is weak, the spread can widen, which means that the difference between the bid and ask prices will be larger.
• Liquidity is another crucial factor that determines the spread. The more liquid a currency pair, the tighter the spread is likely to be. This is because a more liquid market means that there are more buyers and sellers in the market, which creates more competition and narrower spreads.
• Broker's markup, trading volume, and even time of day can affected the spread as well.

All the factor above, it's basically the same from broker to broker. It's the same with OANDA too

Khalid: Wow, your question is really interesting. Indeed, in choosing a trading broker, the most important thing to know is where the broker is from, only after that do we make sure of the features and services provided. Founded in 1997 in Delaware, USA as a provider of FX rates, Oanda has grown to become a large multi-service financial company offering retail CFD trading, Forex data services for institutions, and exchange rate information for more than 38,000 currency pairs.

As an international CFD broker, OANDA is highly regulated, with regulatory oversight from no less than 7 top tier national regulators:

• OANDA Asia Pacific Pty. Ltd. is regulated and licensed in Singapore by the Monetary Authority of Singapore (CMS License No: CMS100122-4) and International Enterprise Singapore (Commodity Brokers License No: OAP/CBL/2012) for commodity CFD trading
• OANDA Australia Pty Ltd. is regulated in Australia by the Australian Securities and Investment Commission (ASIC) ABN 26152 088 349, AFSL No. 412981.
• OANDA Japan Inc. holds a Type 1 Financial Instrument license from the Financial Services Agency of Japan, is registered with the Kanto Local Finance Bureau #2137, and is a member of the Japan Financial Futures Association #1571.
• OANDA Corporation is a registered Retail Foreign Exchange Dealer (RFED) with the U.S. Commodity Futures Trading Commission. (Commodity Futures Trading Commission/CFTC), and a Forex Dealer Member (FDM) of the National Futures Association (NFA # 0325821).
• OANDA (Canada) Corporation ULC is regulated in Canada by the Investment Industry Regulatory Organization of Canada (IIROC).
• OANDA Europe Limited is authorized and regulated by the Financial Conduct Authority in the UK, No: 542574.
• OANDA Europe Markets Limited is a company registered in Malta No: C 95813. The company is authorized and regulated by the Malta Financial Services Authority as a Category 3 Investment.

All clients will trade with OANDA Global Markets Ltd, which is registered in the British Virgin Islands (No. 2026433) and authorized and regulated by the BVI Financial Services Commission, number: SIBA/L/20/1130.

Diego: I also want to add from the explanation. OANDA has won numerous awards for their services and products over the years, such as Best Educational Material 2018 (Investment Trends – US Foreign Exchange Report) and No. 1 Forex Broker. 1 in Singapore 2017 (Investment Trends Singapore CFD & FX Report).

Recently, OANDA was voted Most Popular Broker and Best Forex and CFD Broker 2020 by TradingView clients in the company's inaugural TradingView Broker Awards. TradingView is one of the world's largest social networks for traders, with over 15 million registered users worldwide.

While some OANDA clients can rest assured that their funds will be kept in segregated bank accounts, OANDA Global Markets Ltd does not offer negative balance protection, so traders may lose more than they invested. This is what makes me not like this broker because the security system for client funds is not good in my opinion, even though this broker has been regulated and received several awards

Khalid: OANDA is generally regarded as a safe and reliable forex broker. It is regulated by a number of financial authorities, including the National Futures Association (NFA) in the US, the Financial Conduct Authority (FCA) in the UK and the Australian Securities and Investments Commission (ASIC).

Monitoring of their activities by various regulatory bodies provides additional protection for client funds and helps ensure that brokers operate in a transparent manner and in accordance with industry standards.
However, like all financial services, there are always risks involved and traders should always perform due diligence on a broker before investing their money. In addition, it is important to apply a risk management strategy and never invest more money than you can afford to lose. So, if you want to consider this account as your trading broker, that's fine, but you can learn more to avoid doubts.

Joseph:  Bro, trading copper has a few good things about it. Copper is super important in things like building and electronics, so people always need it. That makes it a reliable investment. Plus, copper prices often show how the world economy is doing, which can help you make smart investment choices. And when the cost of living goes up, copper prices often do too, which can help protect your money.

As for whether copper, silver, or gold is the best choice, it really depends on what you want. Gold is often seen as a safe haven when things are unsure in the world. Silver is used in lots of things like phones and solar panels, and it's not as expensive as gold, so more people can invest in it. Copper is also used in lots of industries, and people always need it, so it's a good investment too. Basically, the best choice for you depends on what you want to do with your money and how much risk you're comfortable with.

Eduardo: Yes, there are some differences between Depth of Market (DOM) on MetaTrader 4 (MT4) and MetaTrader 5 (MT5).

• Firstly, in MT4, the DOM is displayed in a separate window, while in MT5, it is integrated into the Market Watch window. This means that in MT5, you can view the DOM alongside other important information such as bid/ask prices, spread, and trading volume, making it easier to make informed trading decisions.
• Secondly, in MT5, the DOM displays the market depth for both the exchange and the over-the-counter (OTC) markets, whereas in MT4, it only displays the OTC market depth. This means that in MT5, you can see a more complete picture of the market and make more informed trading decisions.
• Lastly, MT5 also has additional features in its DOM, such as the ability to place limit and stop orders directly from the DOM, and the ability to view real-time tick data, which can be useful for traders who rely on scalping or high-frequency trading strategies.

Overall, while both MT4 and MT5 offer the DOM feature, MT5's integration with Market Watch, inclusion of exchange market data, and additional features make it a more robust platform for DOM trading.

Sweety: Simply put, any fees that may be added to you will be written off because you have already started trading, i.e. your account is active for trading. During this time, previously charged fees cannot be recovered.
If your account is inactive for 12 months, you will be charged an inactivity fee. The fee is £10 or USD depending on the exchange rate between pounds and dollars. So up or down. Fees are charged monthly until the account is empty.

But you have to be careful with open positions. Once you open a position, your account will be tracked as an active account. Therefore, positions must be closed first. Second, during maintenance your account will be d and all trading journals will be d too. Therefore, we recommend that you monitor your account before closing it. It's better if you have a deposit if you are still going to trade with OANDA in the future because if you don't have a deposit or your deposit isn't enough to pay for inactivity fees, your account will be usable.

Diego: I disagree with your reasons and arguments about inactivity fees. The main reason OANDA and some brokers charge inactivity fees is the broker server. The more accounts added to their servers, the more energy they need. And the server must be valid because it also affects transactions. And the more accounts opened, the higher the maintenance fee. In forex trading, many accounts are inactive.

And I think every broker has more passive accounts than active accounts because most traders, especially beginners, give up on forex when they fail or lose all their money. Brokers cannot unconditionally withdraw your money, especially in segregated accounts. So they will be charged an inactivity fee and this is accepted because you agreed to the terms while signing up.

Byorka: Some brokers charge an account inactivity fee to encourage their clients to be active and generate income for the broker. An account inactivity fee is usually assigned when an account is inactive for a certain period of time, such as 6 months or a year, and the customer does not make any transactions or deposit money into the account during that period. There are several reasons why a broker may charge an account inactivity fee:

Revenue generation: Inactivity fees provide a source of income for the broker even when clients are not actively trading. For example, if a client has money in his account but is not trading, the broker can still earn by charging activity fees.

Administrative costs: Maintenance of customer accounts requires administrative work, such as checking account details, processing reports, and sending bank statements. An inactivity fee helps cover these administrative costs.

Enable Activity: Inactivity fees can encourage customers to stay active and interact with the platform, increasing trading activity and broker income.

Compliance: Some financial regulatory agencies require brokers to charge an inactivity fee to ensure that inactive accounts are properly monitored and maintained.

So if you feel unlucky here you can always look for better opportunities elsewhere (no one is forcing you to continue trading with a broker)

Diego: In this case, your account will be permanently closed if you don't have enough funds to pay the unpaid fees. So, if you plan not to do business with OANDA, it is better to withdraw all funds and you need more funds for this before repatriation, even though OANDA does not set a maximum withdrawal limit. This minimum merchant amount, your chosen payment method (such as bank transfer, e-wallet, or another payment method) requires a different minimum amount to process your withdrawal request.

If you are going to stop trading, it is very important to control your finances. It is better to stop trading before your amount is less than the possible payout options

Adair: 

Seeing the role of spreads as a trading fee which is a broker's profit, it is only natural that traders take this aspect into account when choosing the best forex broker. Therefore, in the forex learning stage, you also need to really understand spreads. The minimum spread size and the type of forex broker spread will later be important considerations when you open a trading account.

In terms of spreads, for several accounts provided by OANDA, it is quite good and tight. But I'm not sure OANDA is good for beginners if it only relies on accounts with low spreads. Apart from the size of the spread offer, we can see whether or not a broker is "expensive" from the amount of the minimum deposit offered. If I were positioning myself as a novice trader, I would not open a trader's account on the Core account, because the minimum deposit offered is very high, at least $5000.

Also, As a market-moving broker with an impressive history and a large non-CFD business, OANDA seems to be quite a disappointment as a CFD provider. Only 38 FX pairs are available for trading, besides a small number of commodities, indices, and metals and only MT4 is supported.

While there is no minimum deposit on the Standard Account, the trading conditions offered are average, and no negative balance protection is provided for Indonesian traders. Customer service is not available over the phone or in Indonesian, but the education and market analysis features are excellent and OANDA provides a number of tools and plugins for MT4.

Lachlan: I also agree with your explanation that low spreads are not necessarily suitable for some of the criteria of traders, such as for example beginner traders. Because as you explained, the Core account offers a fairly high minimum deposit of $5000 and the premium core account must maintain a minimum balance of USD20,000 and trade with a nominal amount of more than USD10 million or the equivalent per month. and yeah those 2 accounts seem to be provided by OANDA not for beginners but for Expert Advisors (EA), short term traders, high frequency traders.
Actually, OANDA also provides accounts which in my opinion are suitable for beginners, but the spreads offered are still above the average of other similar brokers, with EUR/USD spreads on Standard Accounts starting from 1 pip. But behind this average spread, the commission that OANDA offers for Standard accounts is much lower than for INti accounts, which is $0. So you can trade without worrying about commission fees being charged.
The trading instruments provided are the same as the Core account, which is more than 200. OANDA offers trading on four instruments: Forex, indices, commodities and precious metals. Although only 38 Forex pairs are available and only the MT4 trading platform is supported, this broker offers three account types.

Beathan: The Core Account offers much tighter spreads than the Standard Account, but charges a reasonable commission of 4 USD per lot. The minimum deposit for the Core Account is 5000 USD and the maximum leverage is set at 200:1.

In my opinion, you can say that this is a broker that is not at all complicated (easy) in terms of depositing and withdrawing funds. and yes what is fun here is the freedom to deposit funds. many brokers ask their customers to start depositing by limiting the minimum deposit. But the good news here is that you are free to make a deposit regardless of the value, if you want to deposit, you can start from the lowest number.

However, as far as I know, deposit fees at OANDA are free, but if you withdraw funds via the bank transfer method, there is a fee. bank transfer withdrawals are charged 20 USD per transaction and take 2-4 working days. It should also be noted that banks may charge a processing fee, especially in the case of international bank transfers.

Morven: if my preferred OANDA deposit and withdrawal method is Skrill/Neteller. Compared to other withdrawal methods, I think Skrill/Neteller is the fastest way to fund and withdraw.

Deposits with Skrill and Neteller are free and take up to 1 business day, however, Skrill/Neteller may charge a service fee. Withdrawals to Skrill and Neteller take up to 1 business day and are also free, although conversion fees may apply and Skrill/Neteller may charge additional service fees.

In the case of other financial methods, it takes quite a long time for the money to be processed, around 1-3 days for the credit card method and 2-4 working days for the bank transfer method.

@Mr Boons:

Sure, I'll do my best to explain forex trading and answer your questions in a beginner-friendly way!

1. Oanda is a popular forex broker for several reasons. First, they have a user-friendly platform that is easy to navigate, which is helpful for beginners who may be overwhelmed with all the information and options available. They also offer a free demo account that allows you to practice trading with virtual money, which can be a great way to get started without risking real money. Additionally, Oanda has a low minimum deposit requirement, which makes it accessible to traders with limited funds. As for profitability, it really depends on the individual trader's skills and strategies, as well as market conditions. Oanda provides the tools and resources for traders to make informed decisions, but ultimately it's up to the trader to execute trades effectively and manage risk.

2. Yes, scalping is a trading strategy that relies on low spreads because it involves opening and closing positions quickly for small profits. Oanda is known for offering competitive spreads, particularly for major currency pairs. However, it's always a good idea to compare spreads across different brokers to ensure you're getting the best rate for your trading strategy.

I hope that helps! Don't hesitate to ask further questions if you have any.

@Just some rando: Hey there! Let me explain about the pricing thing!

So, with spread-only pricing, the cost of each trade is determined solely by the spread, which is the difference between the bid and ask prices. There are no additional commissions charged on top of the spread. This pricing model is suitable for traders who prefer to have the costs included in the spread.

On the other hand, core pricing involves a tighter spread but includes a separate commission charge. The core spreads start from 0.1 pips, which can be advantageous for traders who value tight spreads. In addition to the core spread, a commission of $40 per million USD traded is charged.

The choice between spread-only pricing and core pricing depends on your trading preferences and strategies. Some traders may prefer the simplicity of spread-only pricing, while others may find the tighter spreads and separate commission structure of core pricing more suitable for their trading style.

@Alibaba: So you missed this hot news from OANDA Broker? Well, American traders will have access to cryptocurrency trading instruments at the end of October 2022. The broker has announced the opening of a new cryptocurrency trading on the US market. It aims to provide investors with easy access to crypto alongside their existing forex portfolio in a secure environment.

As you explained, cryptocurrency trading is very popular among traders these days and OANDA has established itself as a trading provider with access to cryptocurrency trading for US customers.

From opening a Paxos account to fundraising and trading, everything is managed via the app, giving investors seamless access to leading cryptocurrencies such as Bitcoin, Ethereum and PAX Gold against the US Dollar via a single, intuitive platform.

While US traders don't have access to CFD products, OANDA broker has proven its credibility by adding access to US (United States) cryptocurrency products. It's a great step for this broker to be able to trade. Perhaps over time OANDA will also have access to CFD instruments. no one knows about it.

@Adebowale: Yes, I've heard the news too. I think at the moment OANDA is also a good broker for Cryptocurrency trading. the launch of this offer represents an opportunity for merchants to gain cryptocurrency exposure in a smart way with a trusted brand.

Cryptocurrencies were born out of a counterculture – the desire to trade currencies that were not regulated by any central bank and were not influenced by national currencies and major economic events. However, the interest of traders to trade cryptocurrencies is actually higher every year. That's why OANDA is ready to increase the demand for crypto trading by bringing cryptocurrencies accessible to all traders, including US traders.

Oh yes, don't forget that OANDA has years of experience and an unrivaled record in offering trading on forex and other derivative instruments around the world. OANDA's crypto partner, Paxos, is a leading provider of regulated blockchain infrastructure.

The functionality provided by the OANDA app goes beyond basic 'buy & sell', as traders can set limit and stop order parameters in their account and take profit and stop loss on positions.

That's correct; not many brokers welcome US traders. One of the primary reasons why forex brokers avoid accepting clients from the United States is due to the stringent regulations imposed by the US government. The US government has implemented numerous regulations pertaining to forex brokers, and this includes the Dodd-Frank Act introduced back in 2010. This legislation mandates that forex brokers must register with both the Commodity Futures Trading Commission (CFTC) and the National Futures Association (NFA), a process that can be both time-consuming and costly.

Furthermore, forex brokers are obligated to meet several other prerequisites, including maintaining minimum capital requirements and regularly submitting financial reports to the authorities. Adhering to these regulations can prove challenging for forex brokers, which is why many opt not to accept US clients.

Aside from these factors, it's worth noting that within the US, forex brokers are restricted to offering a maximum leverage of 50:1 on major currency pairs and 20:1 on minor currency pairs. This is considerably lower than the leverage offered by brokers in other regions like Australia and Europe, where leverage ratios of up to 500:1 are available. The limitations on leverage in the US can hinder traders' ability to generate profits, as they are unable to leverage their positions as extensively as traders in other countries. Consequently, many traders opt for offshore forex brokers that offer higher leverage, which explains why many US-based forex brokers do not cater to US clients.

Despite the array of regulations in the US, it is important to bear in mind that these rules are established to safeguard traders and ensure the fair and transparent operation of the forex market. Therefore, selecting a regulated and reputable forex broker remains crucial, even if they don't extend their services to US clients. In my opinion, OANDA stands out as a good broker since it can access the US market, although it's worth noting that not all instruments are tradable by US traders. You should definitely look into this further: Forex Brokers Offering Us Clients

Let me explain to you! In an ECN (Electronic Communication Network), the transparent system is like the backstage pass to the trading show. Specifically, when we talk about the Depth of Market (DoM) feature, it's like peeking behind the curtain to see what's really going on.

The beauty of transparency in an ECN is that it pulls back the curtain on bid and ask prices, revealing the real deal in the market. It's like having a VIP view of all the buy and sell orders lined up. Now, when you're dealing with big transactions or setting up pending orders, the DoM becomes your secret weapon. You can gauge the market depth and see where the action is, making those moves with more insight.

In the Depth of Market window, you get this neat display of prices and quantities, showing you who's buying, who's selling, and at what prices. This transparency creates a level playing field, making the trading environment fair and open. No shady business, just a clear view of the market dynamics.

So, in a nutshell, the transparent system and the Depth of Market in an ECN are like the ultimate tools for traders who want to navigate the market with a backstage pass, making more informed decisions in a fair and open trading arena.