Complete Oanda Review

Written by Robert Soós, 18 May 2017

Oanda is privately held forex and CFD broker with an honorable history that originates back to the US establishment of the firm in 1995. Numerous steps carried out by the computer scientist and economist co-founders - Michael Stumm and Richard Olsen - lead to a unique brand quality that is well known for transparency and great trade execution.

Still headquartered in the USA, Oanda remains under the notoriously rigorous regulation of the CFTC and five other bodies around the globe during times when most competitor forex and CFD brokers have their seats close to each other in Cyprus, Limassol.

Here’s what you can learn from our Oanda review:

1. How are you protected?
2. How account opening works?
3. Money transfer and withdrawal
4. Oanda’s Product Portfolio
5. Fee structure Oanda uses
6. Trading platforms offered
7. Innovative tools Oanda has to offer
8. Research
9. Customer service
10. Bottom line

Oanda's investor protection scheme and regulation

As a truly global online brokerage Oanda complies with six major regulatory authorities. For European traders the opening of the London headquarters in 2011 means that accounts are protected by the UK watchdog FCA.

As Oanda Europe pays a yearly membership fee for the UK Financial Services Compensation Scheme (FSCS) what means in case of Oanda’s default client funds are protected up to 50.000 GBP. In our view this amount is very decent and also should be adequate for most European traders able to use a maximum 1:100 leverage ratio in their trading.

What makes Oanda special is that very few forex retail brokers can serve US residents legally as they lack CFTC regulation and National Futures Association (NFA) membership. Oanda meets both criteria.

Generally we see that Oanda is supportive to new regulatory decisions and restrictions but not only that. During the post SNB (Swiss National Bank) crisis Oanda showed good example of protecting investor funds as it did not amend CHF trades and quickly implemented negative client balance protection.

Account opening at Oanda

As modern technology enables digital identification a five star experience requests a swift and easy way for account opening. We had exactly this five star experience with Oanda as it took us no more than ten minutes to have our real account ready to accept it’s first deposit.

Account opening restrictions

Oanda is present on all continents hence other than legal restrictions - like a complete ban on CFD offering for US residents - we did not encounter any limitations.

Account types

• Standard - no minimum funding
• Premium - minimum 50.000 USD or equivalent funding

Oanda does not provide too many options here, and frankly we did not miss to see special landing sites describing benefits that only VIP clients can achieve. In very puristic form one can open either a Standard or a Premium account. Oanda is a bit secretive with the latter one but clients over 50.000 USD or equivalent account sizes get even tighter spreads and a rebate on wire transfers that enables free deposit funding. As such higher amounts fall out of the protection limits, consider the risk and benefits altogether.

Account currencies

Clients can open one so called Primary account and up to 19 Sub-accounts. The currency of the primary account has to be selected thoroughly but otherwise, Oanda is very flexible and offers a wide range of currency options. These are:
 

• EUR, GBP, CHF, USD, CAD, AUD, JPY, HKD, SGD

Account opening process

From the start to finish you can calculate with no more than 10 minutes to be able to fund your account. The steps are the following:

• Sign up: General online sign up in order to receive a username-pass combo login
• Your personal information: Expect to tell the most basic personal information plus an employment status and an income estimation.
• Verify your identity: Here you can simply drag and drop a color picture or a scan of an official document that proofs your identity and residence.
• Confirmation site: If everything went well you will be forwarded to a thank you page from which you can directly reach the funding opportunities.

Money transfer and withdrawal

Whenever you wish to make a transfer or deposit first you need to sign in to My Funds page. It is important when choosing between the different methods to be aware of that you will be able to withdraw funds only by the same method you used to deposit your Oanda account.

Deposit

Funding your Oanda trading account is possible via debit/credit card, PayPal and wire transfer options. Each has different fulfillment times and costs attached but generally, you should see funds arriving within five business days or even less than one day in case of card and PayPal payments. If the transfer is in delay drop a question on live chat to Oanda and your bank too.

Oanda does not take any charges from the incoming amounts but your bank might do so. Paypal charges a service fee of £0.30 per transfer plus 3.20% of the total amount transferred for non-UK clients. For more details visit Deposit Funds with OANDA.

Withdrawal (withdrawal fee)

Withdrawals work almost the same way as deposits, you will need to use My Funds page. The fee charged by Oanda for wire withdrawals is 20 EUR but you can escape this cost by selecting the card of PayPal method. One monthly card withdrawal is free of charge. For more details visit Oanda Withdrawals. Although we did not test the withdrawal process in our current Oanda review, we did not hear about any negative issues from other traders.

Product portfolio

Oanda is really associated with the currency market and the firm is seemingly happy with this stamp as clients can reach only Forex and CFD products, nothing else. We are a bit surprised that equity CFDs are not offered (not even blue chips like Google, Facebook, Apple) but other than that there is a great variety of derivatives to trade online. In case you needed to refresh your knowledge on these instruments read our CFD broker 101 blog section.

• Forex: the menu is full here as you can find all major and lot of exotic pairs. A good feature is the real time rate and spread check option from the website.
• CFDs: Indices, commodities, precious metals and even some government bonds are on the list. As these instruments tend to be very volatile we recommend to observe carefully the different margin requirements to avoid close out aka margin call.

Oanda's fee structure reviewed

During our Oanda review we experienced that trading fees are competitive but not the lowest. For quite a long time Oanda applied an only spread policy, however, to please more active traders the company introduced core pricing. This means raw spreads + 5 USD  per 100.000 amount. We believe that quality trade execution is reflected in the moderate spread fees.

The average 1.2 pip spread on EURUSD will disappoint some hardcore scalpers but with a premium account (deposit above 50.000 USD) spreads gets tighter. Just to compare, from our reviewed brokers IG charges only an average of 0.75 pips difference between the bid/ask for the same eurodollar cross.

Swing traders holding positions for more than one day can easily calculate financing cost using Oanda’s calculator. As benchmark rates are cut or lifted continuously we recommend to check the rates from time to time.

Other fees

Tracking the fees is really easy with Oanda as there are only trade related costs. One exception arises when there are no open positions for at least 24 months as in such situation a 10 EUR monthly inactivity fee is charged.

You can compare Oanda trading fees with other broker's fees in our comparison table.

Trading Platforms offered

All platforms are easily accessible after a simple sign into your individual client portal that offers information on 8 different languages. No additional security steps are added like a key generator or code card requirement when logging in. The phone version does not have the cool fingerprint log in option, unfortunately. Nevertheless, an extra security layer can be added using a smartphone plus Google Authenticator to generate verification codes to sign in to fxTrade account.

Web platform

You can access the markets in seconds as the nicely designed web platform launches immediately. Often web based trading receives a secondary role at online brokers but Oanda added features that will convince even some hardcore desktop believers.

• Open trade

  Clicking on the bid or ask price of the instrument will bring up a new order window. As you set the units like to be traded, the one pip value will be shown in EUR amount, reducing the chance of surprise for beginners when the market starts moving against them.

  For setting pending buy sell orders just use the chart with a right click. Once you see the price line it can be moved by grabbing it.

• Manage Funds: Via “Manage Funds” it is possible to set leverage ratio and practice account deposit size, no need to write additional letters to the support team. Both are very important settings for traders preparing for their real account challenges.

• Access news: News sections is a feed of Marketpulse and Dow Jones Newswires. Adding a bit more diversity would be welcomed as compared to Interactive Brokers where over 20 news providers are available for free Oanda’s offer here is quite modest.

• Other features: As a nice little touch a red-green scale below the chart reminds about the daily performance of the currencies, serving as a market volatility meter. Also hopefully a lot of traders will pay attention on the left hand side to the sliding scale “Margin Used” button in essence shows how risky the position size or portfolio size is.

The outlook of the chart might be familiar for many users as it is powered by TradingView. The design, drawing options and also trading capabilities are above the top.

Regarding the different order types novice users can read a detailed description here.

Mobile

Available on any iOS or Android device phone traders can experience a pretty advanced app. Generally, we agree with customer ratings that place Oanda’s mobile trading solution in the upper-middle range of the competition.

The main window is not overcrowded, one does not need a ridiculous size phone to see the account details or the chart. One click trading is obvious, chart addicts can open trades from the full screen chart or add some advanced technical analysis drawings. News are available from the platform but probably you already have tons of other apps to read news.

Desktop

• Chart: Let’s start with the weakest point first, the chart. Scrolling up and down often leads to a disturbing twitching, jerking and occasionally a complete loss of the price line. Due to this instability the chart is pretty annoying. At least trading from the it directly works well in terms of pending orders and market orders.

  Chart graphics are pretty vintage looking some might like the nostalgic feelings it brings up including the sound effects. From the technical analysis studies several did not appear for us and unfortunately, in such cases there is no quick help. On the flip side the economic event overlay is something that adds value.

  One good advice here: just use the Advanced Charting option. It is not developed by Oanda but looks and works much better.

• Trading: Almost identical window pops up as at the web version, and it serves it’s purpose well. Most common settings are offered for the market or entry orders and also some calculations help beginner traders in advance (eg. what will be the one pip value).

  

• Other features: Some pleasure and added value arrives from the resources menu that usually opens up an additional window. Oanda Order Book, spread statistics and different calculators can be reached from here. For some reason desktop users are not able to analyse their trade history in detail and that’s a big minus. In our Oanda review the web platform beats the desktop version in almost all feature.

Metatrader

As Metatrader 4 is the Volkswagen of the trading industry we will not explain too much detail here. Micro lot is the smallest trade size, automated strategies, proprietary indicators can be added. Does Metatrader 4 beat Oanda’s fxTrade platform? No surprise that it does.

Oanda review - Innovative Tools

Competition for customers among forex brokers lead to the birth of some really interesting and useful gadgets. In the field of extra tools few participants, if any, danger Saxo Bank’s dominance. Nevertheless Oanda has some of it’s own innovative tools worth mentioning.

• Forex Order Book: This is a 24-hour summary of open orders and positions held by OANDA's clients. Originally implemented to serve transparency but often used as a counter indicator by more practiced trader eyes.

• Forex Open Positions Ratio: Breakdown of OANDA clients’ recent open positions across major pairs.

• Currency Heat Map: In the world of pips it is refreshing to see a visual chart of changes in percentages. It can serve as a benchmark return or as a tool to check different correlations.

Oanda review - Research & Education

Research and education is not really Oanda’s bastion of strength but if we compare it to the relatively low fees that are charged for trading than the level and depth of these services reach an acceptable level. From the competition we reviewed so far both Saxo Bank’s tradingfloor.com and IG Group’s dailyfx.com subsites get ahead of Oanda. Nevertheless Oanda offers education and news in these forms:
 

• MarketPulse.com: The design of the subsite is a bit outdated. However the core - being the quality of information - is presented by clearly qualified and experienced analysts who publicate their views on recent forex and other market events. The level of interaction is quite low on the site therefore it feels like a static, rather one directional blog that creates very little buzz. It’s definitely worth taking a look at it every once in a while because of the quality of the articles, but this is not exactly the place where you’ll get a feeling as to what the whole community talks about.
• Live Webinars: Beginners can get some of the essential basics via webinars like how to do the first trade or avoiding common trading mistakes. More advanced topics like price gaps & volume analysis are available only for real account clients.

Oanda review - Customer Service

Oanda’s customer service team is available 24 hours a day whenever the market is opened. Upon account opening, clients receive a Customer Relationship Specialist they can contact directly.

The live chat is not hidden and is also at the service of clients. Some of the questions we asked were quite sophisticated and therefore no immediate response arrived but that is fully acceptable.

A number of awards were given to Oanda in Best Client Service category - awarded by Investment Trends - reflecting that clients appreciate Oanda’s efforts to solve their issues.

Awards are important, however during our Oanda review we had mixed feelings with our CRS as the person was intentionally helpful but more than once replied with contradicting information. On top of that quite pushy sales emails landed in our inbox and frankly we did not like it.

Oanda review - Bottom line

Out of the tremendous amount of Forex and CFD brokers Oanda stands out from the crowd by truly placing regulatory compliance - therefore safety - and customer satisfaction in the frontline (see post SNB decision).

While trading fees are really simply set they are not the cheapest, therefore Oanda’s offer better fits less frequently trading clients. By experience level newcomers will find the no minimum deposit and flexible trading amount setting attractive, while more experienced traders can enjoy higher protection scheme, lower spreads on premium accounts and advanced webinars. The awards won for customer support are not groundless as availability and answers to most frequent questions are well prepared.

While Oanda is primarily focused on currency and CFD traders, products could be extended at least for the largest stocks. Apart from this little insufficiency Oanda is our top value for price recommendation for forex traders.

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