I really like Oanda’s low spread but I’m deterred by the numerous stories posted here (Oanda Reviews | Forex Trading Broker) of people getting “stop loss” hunted. Is this true? Does Oanda trade against it’s customers. Will they manipulate the prices just to get you stopped out so that they can make more money from you? Your advice is most appreciated. Thanks!
Doesn’t matter what broker you go with, you’ll read tons of horror stories of how their broker screwed them. Oanda is a solid company to go with. You can literally trade with a penny.
Now as far as your other concerns. Every broker trades against you. They do that to ensure their spread. Why else do you think they are so kind enough to offer you 50:1 on your money? They match together trades in house and the difference is hedged by whatever bank they place their trades through.
And yes, I would widely accept the belief that stop hunting exists. However it’s done more on a universal level. There isn’t a person that’s just sitting behind a desk watching where you put your stop. I don’t always think it’s even brokers that hunt for stops. I think big money can play a part of that as well. To what extent, I don’t know.
With that said, I generally only have an “oh sh*t” stop loss. And I move it to break even when I want to secure a number of pips. Plenty of times I seen price retrace to obvious stop loss levels just for it to go right back down. Whether it’s stop loss hunting or just the market being how the market is, I’ve long accepted it and have adapted it to my trading.
When it comes to forex brokers, there’s no such thing as good and bad guys. They’re all different shades of grey.
I would dare to say though, that Oanda is one of the best. Only problem I’ve had was once when their platform crashed for about 20-30 minutes. Other than that nothing at all to complain about.
Be careful about these review sites. Most bad reviews are from people who blame the broker when they ought to blame their own incompetence. That goes for all brokers of course.
More correctly, all the [I]dealing desk[/I] brokers initially take the opposite side of your trade (with an eye to match it against another customer going the other way). The ECN brokers are straight pass-through brokers like you’d find in the stock and futures markets. They are straight execution for commission.
As for Oanda, they are not a stop running broker. In fact, I have seen a couple of instances where Oanda corrected executions that came up due to erroneous or suspect prices.
difficult question to answer lol. I know ppl who swear by oanda and have made millions even pit traders who’ve gone off floor use oanda for years and as I said swear by it.
On the hand I’ve heard stories of them being out to get you. Both can’t be right,.
Any way one way to avoid stop hunting is not keeping a very tight stop try trading off the 4 hour charts, if they manipulate the price by a wide variation from other brokers this will give rise to arbitrage opportunities.
I too would really like to know if there’s any truth to the out to get you stories.
if you want to be absolutely sure of no malpractice trade on a regulated exchange, most exchange have contract notes wih numbers you can then look up the number of your contract at the end of the trading day on the exchange site and see what your real fill was and whether it was marked up or not.
for small guys like us in the big bad world of otc forex I think oanda is the best [U]market maker[/U] broker for us. Its spreads work out cheaper than even some ECN based broker commisions.
WOW…so stop loss hunting by brokers seems to be a common practice? How do I avoid falling victim to this? I’d like to trade volatile pairs like the GBPJPY so having a stop loss is imperative…LOL…Cheers!
The solution is surprisingly simple.
Do not place you stop loss too close to your entry price.
Allow your trade room to breathe.
This is where the Average True Range indicator or the Starc bands indicator are extremely useful.
Put your stop outside their range and you should be OK.
If your stop is then hit, it is because you have miss judged your trade direction.
Ha, ha, ha, ha! 
That’s so funny.
First of all, stop running originated in the futures pits. They have been notorious for it over the years. Secondly, if you’ve ever heard of “fast market” conditions you know that for unethical sorts that’s basically license to rip off customers. Oh, and then there’s front running.
In other words, if someone really wants to rip you off they’ll find a way.
No. Stop hunting by brokers is NOT a common practice. You’d just think it was because people who need to blame someone other than themselves for their trading mistakes say their broker ran their stops.
Now stop hunting by big players in the markets like hedge funds and whatnot definitely does happen. But that’s a broader action intended to play the kick that tripped orders give the market. When stops get run what you’ll generally see is a continuation through the stop point by some distance (maybe 20-30 pips), then the market fairly quickly turns around. That’s a function of the stop orders running out and the stop runners unloading their position into that move.
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[q]First of all, stop running originated in the futures pits. They have been notorious for it over the years.[/q]
that part is true, read about it.
[q]In other words, if someone really wants to rip you off they’ll find a way.[/q]
Idea is to protect yourself as much as possible
but Actually now-a-days many exchanges are completely electronic, there are no “pits” and no “pit traders” who huddle together and do all the naughty things you talk about. Actually I trade cuurency futures on the (NSE) a regulated exchange, and suprisingly I’ve been far more profitable than i have been on the otc market employing the same trading technique on the same time frame.
If you trade on an exchange there’s something termed as digital contract notes which are issued by your broker this will have a reference number you can then look up the refrence number at the end of the day on the exchange to check whether the transaction prices on your brokers statement match the transaction prices on the exchange. By doing so you then know whether your broker has marked up prices.
I regularly do this and surprisingly I’ve found brokers who actually had some discrepancy between the two prices more than once. Complaing really didnt help but switching brokers did.
In an OTC market you have no way of knowing how much the broker fluctuates his price claiming it depends on his liquidity providers. How do you explain outrageous spreads and spikes not even during news events and two different accounts showing different prices for the same broker at the same time. Do you really beleive its all because of the liquidity providers?
As far as the argument about brokers not hunting stops and tradign against you sorry I don’t buy it.
I used to think like you but then someone posted some webinar links on tradingmarkets.com here at BP. One of the webinars was presented by John Carter a well know trader with decades of experience. There he talks about the reality of brokers trading against you. I’m still not very sure like I said earlier but I’m more inclined to believe him than you (no offense)
Great to hear those old time clinches though
Can you prove your performance is because of trading on the exchange? Or might it just be better market conditions for your trading technique? Or maybe it’s you being more experienced and making better trades? I’m not suggesting one answer over any other, just suggesting that it might not be the exchange switch that explains the improved performance.
In an OTC market you have no way of knowing how much the broker fluctuates his price claiming it depends on his liquidity providers. How do you explain outrageous spreads and spikes not even during news events and two different accounts showing different prices for the same broker at the same time. Do you really beleive its all because of the liquidity providers?
You can compare your broker’s prices against other brokers and data sources and know if they are out of line, so you definitely do have ways of checking things. The different prices in different accounts thing I could only possibly explain by the accounts being of different types under different conditions (guaranteed fills, fixed spreads, etc.). Even still, if I ever saw different prices quoted I would have a major problem with that broker. It’s not something I’ve seen myself, though.
As far as the argument about brokers not hunting stops and tradign against you sorry I don’t buy it.
Buy what? I’m sure it happens. There will always be those who attempt to manipulate things to their advantage. I just contend that it’s MUCH less of an issue than folks would have you believe.
I used to think like you but then someone posted some webinar links on tradingmarkets.com here at BP. One of the webinars was presented by John Carter a well know trader with decades of experience. There he talks about the reality of brokers trading against you. I’m still not very sure like I said earlier but I’m more inclined to believe him than you (no offense)
Without having see the Carter stuff I cannot comment (though I also have “decades of experience”). Keep in mind, though, that things like the NFA rules on minimum capitalization and the steady increase in forex regulation taking place is squeezing out those bucket shops who were the big culprits of shady practices.
As I’ve said many times on this site, though, if you want to avoid any possible issues of this nature use an ECN broker rather than a dealer.
I’ve tested this theory on A LOT of brokers. I have yet to find a broker that really stop hunts. One way to test this for yourself is to run multiple copies of MetaTrader each with a different broker.
At 4Squared, at one time we were doing this for 18 different brokers at once and tested across all of them for 6 months. In all that time, there was not a single SHRED of evidence that any of the brokers did anything remotely like what they are repeatedly being accused of.
Oanda was one of the brokers we tested.
Thus far, in all of our testing, we have found a 100% correlation between traders simply making poor trading decisions and their claims of stop hunting.
In short, Oanda doesn’t stop hunt, neither does IBFX, neither does FxOpen, or FXCM, or …
In the case of Oanda, they have something north of 1 billion in deposits and several hundred million in active trades. Do you really think a company that is making that much money servicing trades is going to screw it up in such an easily verifiable method of stealing? Give me a break.
False.
You can get stop hunted in any market, with a market maker, or the big money handlers with an ECN broker, and so forth. Obviously market makers are much more sinister and their policies are not in line with your benefit. With an ECN broker you do get an honest play in the market, but the big money handlers will push you out if your not smart.
When your with a market maker, your not playing the real market, your playing their market, it’s not a REAL market. You must understand this.
Stop hunting is not illegal. It’s not a conspiracy, it’s something that is well known and has been well known for a long time.
To combat this you need to be smart, you need to not place your stop loss based on the chart and a few support areas, you need to not place your stop loss where the majority of other traders just like you, are placing their stop loss. You need to focus more on your risk and reward ratio, your consistency and your accuracy. You need to find a proper broker and you need to understand that brokers policies. You need to understand where that broker makes the majority of their profit.
No broker specifically hunts you, they hunt the majority. You must understand that when you place a stop loss, your visible. You can be touched.
We can go on for days, but the above statement is absolutely false. Brokers do stop hunt, and IMO all market makers stop hunt at some point but it’s not something that should stop you from trading. You need to incorporate a compensation in your trading plan to combat the possibility of your stops being hunted.
Oanda does stop hunt and has stop hunted. This is a fact.
It’s not a big deal, it’s just another side of trading that you need to compensate for. It’s not a deal breaker.
Later.
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And don’t be fooled by low spreads with market makers, low spreads across the board should be a red flag and isn’t necessarily a good thing, they compensate more in other ways and vice-verse.
Saying something and then saying “this is a fact” does not make it so.
My company has tested this for more than 6 months. During that time there was ZERO evidence that any of the brokers we tested stop hunted … and Oanda was one of them.
Brokers make their money NOT from trading themselves, but from trading ACTIVITY by their members. Stop hunting harms the ability of their members to continue trading activity. BROKERS do not stop hunt.
Major market players will (private equity firms, hedge funds, etc) but not brokers.
The plain and simple fact of the matter is that most brokers don’t have enough capital to push a currency pair more than a pip or two. THAT is a fact … and proveable (unlike the opinion you gave and then didn’t provide ANY evidence to support it)
Take a look at how much money Oanda has (not trading account money on hand, but earnings) and it becomes obvious very quickly they don’t have enough money to stop hunt.
If you claim that brokers stop hunt, please let us see any evidence that such a thing is even POSSIBLE given the small amount of money they have.
My evidence that they CAN’T can be found on their own web pages. Most retail brokers PUT TOGETHER don’t have enough to effectively stop hunt (just do a little 2+2 math).
Market Makers stop hunt.
This is WIDELY KNOWN. FOR MANY MANY YEARS.
You think your six months of false research, probably didn’t research correctly first of all, is worth anything?
Dude, stop hunting is a normal accepted tactic of market makers, it’s a fact. Read your ****ing contracts.
Good day.
Something I just thought of. A very simple EA can be written that will manage your “stops” for you. Instead of putting your stops into your order, let your EA manage it. This will make it “appear” as if you are trading without a stop.
I will bet you will find that your win/loss ratio will not change AT ALL.
That was one of the tests that we did to see if a broker was stop hunting. We would place orders for a month with stops, then for a month without them (letting an EA close an order at the location a stop would have been set).
This was just ONE of the tests we did across a six month time frame.
Again, trades without stops were no more likely to exit profitably than trades with them.
We tested trading with stops at predefined pip levels, stops at support/resistance levels, stops at some multiple above or below s/r levels, and so on … and then again those same trades without stops and instead where those stops would be set having an EA exit the trade.
None of it mattered.
A trade that ended up being placed with the net order flow exited profitably. Those that ended up not being placed with the net order flow did not.
And again, a few hundred million (the amount of TRADEABLE money large brokers have like fxcm, dbfx, oanda, and so on) isn’t enough to stop hunt.
FXCM is a market maker and one of the largest retail brokers on the planet.
Please go to their website and find out how much tradeable money they have on hand, then post it here for us.
Like I said, if you think brokers stop hunt, can you attempt to prove it is even POSSIBLE for them to do so?
Brokers do not specifically stop hunt you. They aren’t out just to get you. But how do you think market makers make their money? It’s their market, you play by their rules, and one of their rules is stop hunting. Another is spreads. Another is sinister tactics like freezing your platform and putting a freeze on your trades during high volatile moves in the market, betting against you on every trade.
Basically a market maker is a casino. They will do everything they can to better their odds.
Just because Oanda has massive capital doesn’t mean they are safe. Give me a break.
It has been falsely claimed for many years. That people claim something to be so does not make it so.
Lots of people claimed the earth was flat and the center of the universe yet no ships ever fell off the edge.
Here guys, let me do your homework for you …
$145,072,098 In Capital (Assets Minus Liabilities)
$179,381,756 In Operating Cash (Excludes Client Funds)
*from the company-profile.jsp page on fxcm’s website
I don’t know whether to find it funny, or sad, that you believe a company with a 150 mil balance sheet and 180 mil in cash on hand has enough capital to stop hunt. Even if they placed EVERY PENNY THEY HAD into a single trade they’d be lucky to move a currency more than 2 or 3 pips.
Folks, retail brokers DO NOT have enough money to legally stop hunt. They don’t, the proof is in front of your face. They ONLY way they could stop hunt would be if they artificially manipulated the price on their platform.
However, that would be illegal and all too easy to determine that they did it.
Private equity firms, hedge funds, major institutional banks … those guys sneeze in the markets for more money than fxcm has ALL TOGETHER.
Retail brokers could maybe stop hunt IF they all teamed up … lets say the largest 20 brokers … then, maybe if they all acted together, they would have enough to do it.
That would require however that NO ONE at any of those brokers blows the whistle … rather unlikely.
I tell you what. Lets take this in baby steps and make it easy on you. You prove, with only 180 mil in cash on hand, how it is even POSSIBLE for a broker to stop hunt.