Oanda: The anatomy of bucket shop

Broker Discussion Forex Brokers
1

It’s becoming more and more close to impossible to trade with Oanda and they used to be one of my favorite brokers. It is so obvious that they go stop hunting, I don’t even know how these people get away with this kind of behavior. If there’s a lot volume and if you have an account with a real broker like an ecn broker, the spread tightens but not with Oanda, in fact with Oanda the spread widens quite a bit, it is a joke, they claim that this is the feed they get from their providers which is an outrageous lie, no other real broker will widen the spreads like they do. With ecn brokers your spread stays with 0 to 0.7 pips but with Oanda it can go all the way up to 30 pips, this is not caused by their feed if it was you would notice the same kind of spread widening with the other brokers and you don’t unless the other is also another bucket shop. It is time we start filing complaints about oanda with CFTC and NFA, this kind of behavior is just unacceptable. I do not scalp but I day trade and my stops are anywhere from 15 to 40 pips and my targets to at least 1:1 depending of what I see on the chart, if it is less I don’t trade. I trade off 30 minute for my main analysis and 5 minute for entry.

Today, January 29th 2014, I decided to record their widening of spreads around 2 pm Eastern Time, around a major news release, and I did the same with MBtrading, it wasn’t as bad as some other days in the past but you can still notice their obnoxious widening of spreads. Please compare, it is just sad. This is just 10 seconds of recording on USDJPY.

Here’s Oanda Spreads:

14:0:20 - Ask: 102.272 | Bid: 102.182 | Spread: 9.00 pips
14:0:20 - Ask: 102.265 | Bid: 102.179 | Spread: 8.60 pips
14:0:20 - Ask: 102.270 | Bid: 102.186 | Spread: 8.40 pips
14:0:20 - Ask: 102.265 | Bid: 102.182 | Spread: 8.30 pips
14:0:21 - Ask: 102.280 | Bid: 102.199 | Spread: 8.10 pips
14:0:21 - Ask: 102.272 | Bid: 102.193 | Spread: 7.90 pips
14:0:21 - Ask: 102.276 | Bid: 102.199 | Spread: 7.70 pips
14:0:21 - Ask: 102.270 | Bid: 102.195 | Spread: 7.50 pips
14:0:21 - Ask: 102.266 | Bid: 102.193 | Spread: 7.30 pips
14:0:22 - Ask: 102.264 | Bid: 102.194 | Spread: 7.00 pips
14:0:22 - Ask: 102.247 | Bid: 102.176 | Spread: 7.10 pips
14:0:22 - Ask: 102.247 | Bid: 102.156 | Spread: 9.10 pips
14:0:22 - Ask: 102.243 | Bid: 102.144 | Spread: 9.90 pips
14:0:22 - Ask: 102.237 | Bid: 102.141 | Spread: 9.60 pips
14:0:23 - Ask: 102.240 | Bid: 102.146 | Spread: 9.40 pips
14:0:23 - Ask: 102.233 | Bid: 102.141 | Spread: 9.20 pips
14:0:23 - Ask: 102.231 | Bid: 102.140 | Spread: 9.10 pips
14:0:23 - Ask: 102.246 | Bid: 102.153 | Spread: 9.30 pips
14:0:23 - Ask: 102.246 | Bid: 102.152 | Spread: 9.40 pips
14:0:24 - Ask: 102.243 | Bid: 102.147 | Spread: 9.60 pips
14:0:24 - Ask: 102.239 | Bid: 102.145 | Spread: 9.40 pips
14:0:24 - Ask: 102.240 | Bid: 102.147 | Spread: 9.30 pips
14:0:24 - Ask: 102.239 | Bid: 102.149 | Spread: 9.00 pips
14:0:24 - Ask: 102.225 | Bid: 102.136 | Spread: 8.90 pips
14:0:25 - Ask: 102.222 | Bid: 102.135 | Spread: 8.70 pips
14:0:25 - Ask: 102.249 | Bid: 102.165 | Spread: 8.40 pips
14:0:25 - Ask: 102.222 | Bid: 102.141 | Spread: 8.10 pips
14:0:25 - Ask: 102.225 | Bid: 102.146 | Spread: 7.90 pips
14:0:26 - Ask: 102.240 | Bid: 102.164 | Spread: 7.60 pips
14:0:26 - Ask: 102.240 | Bid: 102.167 | Spread: 7.30 pips
14:0:26 - Ask: 102.238 | Bid: 102.168 | Spread: 7.00 pips
14:0:26 - Ask: 102.234 | Bid: 102.165 | Spread: 6.90 pips
14:0:27 - Ask: 102.228 | Bid: 102.163 | Spread: 6.50 pips
14:0:27 - Ask: 102.221 | Bid: 102.157 | Spread: 6.40 pips
14:0:27 - Ask: 102.229 | Bid: 102.168 | Spread: 6.10 pips
14:0:27 - Ask: 102.262 | Bid: 102.203 | Spread: 5.90 pips
14:0:28 - Ask: 102.255 | Bid: 102.199 | Spread: 5.60 pips
14:0:28 - Ask: 102.265 | Bid: 102.211 | Spread: 5.40 pips
14:0:28 - Ask: 102.252 | Bid: 102.199 | Spread: 5.30 pips
14:0:28 - Ask: 102.243 | Bid: 102.193 | Spread: 5.00 pips
14:0:28 - Ask: 102.237 | Bid: 102.188 | Spread: 4.90 pips
14:0:29 - Ask: 102.234 | Bid: 102.188 | Spread: 4.60 pips
14:0:29 - Ask: 102.231 | Bid: 102.190 | Spread: 4.10 pips
14:0:29 - Ask: 102.228 | Bid: 102.188 | Spread: 4.00 pips
14:0:29 - Ask: 102.226 | Bid: 102.188 | Spread: 3.80 pips
14:0:30 - Ask: 102.239 | Bid: 102.203 | Spread: 3.60 pips
14:0:30 - Ask: 102.250 | Bid: 102.216 | Spread: 3.40 pips
14:0:30 - Ask: 102.250 | Bid: 102.218 | Spread: 3.20 pips
14:0:30 - Ask: 102.252 | Bid: 102.218 | Spread: 3.40 pips
14:0:30 - Ask: 102.254 | Bid: 102.222 | Spread: 3.20 pips

Here’s MBtrading:

14:0:20 - Ask: 102.068 | Bid: 102.058 | Spread: 1.00 pips
14:0:20 - Ask: 102.052 | Bid: 102.034 | Spread: 1.80 pips
14:0:20 - Ask: 102.049 | Bid: 102.034 | Spread: 1.50 pips
14:0:20 - Ask: 102.061 | Bid: 102.042 | Spread: 1.90 pips
14:0:20 - Ask: 102.059 | Bid: 102.043 | Spread: 1.60 pips
14:0:21 - Ask: 102.062 | Bid: 102.042 | Spread: 2.00 pips
14:0:21 - Ask: 102.071 | Bid: 102.036 | Spread: 3.50 pips
14:0:21 - Ask: 102.082 | Bid: 102.052 | Spread: 3.00 pips
14:0:21 - Ask: 102.082 | Bid: 102.037 | Spread: 4.50 pips
14:0:21 - Ask: 102.144 | Bid: 102.094 | Spread: 5.00 pips
14:0:21 - Ask: 102.117 | Bid: 102.094 | Spread: 2.30 pips
14:0:22 - Ask: 102.149 | Bid: 102.100 | Spread: 4.90 pips
14:0:22 - Ask: 102.167 | Bid: 102.100 | Spread: 6.70 pips
14:0:22 - Ask: 102.171 | Bid: 102.152 | Spread: 1.90 pips
14:0:22 - Ask: 102.176 | Bid: 102.131 | Spread: 4.50 pips
14:0:22 - Ask: 102.179 | Bid: 102.130 | Spread: 4.90 pips
14:0:22 - Ask: 102.191 | Bid: 102.155 | Spread: 3.60 pips
14:0:23 - Ask: 102.193 | Bid: 102.162 | Spread: 3.10 pips
14:0:23 - Ask: 102.196 | Bid: 102.163 | Spread: 3.30 pips
14:0:23 - Ask: 102.207 | Bid: 102.183 | Spread: 2.40 pips
14:0:23 - Ask: 102.196 | Bid: 102.173 | Spread: 2.30 pips
14:0:23 - Ask: 102.193 | Bid: 102.173 | Spread: 2.00 pips
14:0:23 - Ask: 102.186 | Bid: 102.175 | Spread: 1.10 pips
14:0:24 - Ask: 102.164 | Bid: 102.152 | Spread: 1.20 pips
14:0:24 - Ask: 102.186 | Bid: 102.164 | Spread: 2.20 pips
14:0:24 - Ask: 102.195 | Bid: 102.169 | Spread: 2.60 pips
14:0:24 - Ask: 102.203 | Bid: 102.170 | Spread: 3.30 pips
14:0:25 - Ask: 102.219 | Bid: 102.183 | Spread: 3.60 pips
14:0:25 - Ask: 102.228 | Bid: 102.204 | Spread: 2.40 pips
14:0:25 - Ask: 102.218 | Bid: 102.181 | Spread: 3.70 pips
14:0:25 - Ask: 102.227 | Bid: 102.204 | Spread: 2.30 pips
14:0:26 - Ask: 102.240 | Bid: 102.204 | Spread: 3.60 pips
14:0:26 - Ask: 102.228 | Bid: 102.205 | Spread: 2.30 pips
14:0:26 - Ask: 102.228 | Bid: 102.225 | Spread: 0.30 pips
14:0:26 - Ask: 102.228 | Bid: 102.201 | Spread: 2.70 pips
14:0:26 - Ask: 102.239 | Bid: 102.213 | Spread: 2.60 pips
14:0:27 - Ask: 102.207 | Bid: 102.200 | Spread: 0.70 pips
14:0:27 - Ask: 102.204 | Bid: 102.167 | Spread: 3.70 pips
14:0:27 - Ask: 102.196 | Bid: 102.192 | Spread: 0.40 pips
14:0:27 - Ask: 102.209 | Bid: 102.194 | Spread: 1.50 pips
14:0:27 - Ask: 102.207 | Bid: 102.186 | Spread: 2.10 pips
14:0:28 - Ask: 102.205 | Bid: 102.181 | Spread: 2.40 pips
14:0:28 - Ask: 102.196 | Bid: 102.181 | Spread: 1.50 pips
14:0:28 - Ask: 102.195 | Bid: 102.178 | Spread: 1.70 pips
14:0:28 - Ask: 102.201 | Bid: 102.178 | Spread: 2.30 pips
14:0:28 - Ask: 102.216 | Bid: 102.211 | Spread: 0.50 pips
14:0:29 - Ask: 102.246 | Bid: 102.227 | Spread: 1.90 pips
14:0:29 - Ask: 102.246 | Bid: 102.223 | Spread: 2.30 pips
14:0:29 - Ask: 102.228 | Bid: 102.209 | Spread: 1.90 pips
14:0:30 - Ask: 102.226 | Bid: 102.202 | Spread: 2.40 pips

I will keep on tracking by comparing more brokers, I’m planning to compare Oanda with FXCM, MBtrading, IBFX and FXopen.

2

Notice that at 14:0:20 their spread was 9 pips whereas mbt’s was 1 pip.

3

idude,

I have a simple solution for you. Don’t bother with Oanada, just open an account and do your trading with MBtrading. LOL!

PS the amount of time you spent writing down all the ask bid spread info for this thread would have been better spent filled out the MB application

4

Hi Idude: I am sorry if you feel that bad about Oanda. Actually, there is nothing wrong with Oanda as it mostly has wider spreads than others during news breaks. The only broker that I know that has similar large spikes is FXCM.

Yes, you’re right about spreads at Oanda and MB Trading at the time you mentioned. I rechecked real time quotes for brokers during the time and it matched your description . Still, large spikes such as these is very common on Oanda platform . Actually, Oanda still has good reputation and it is not because of its spread but the stability of is platform and order fulfilment.

Otherwise, if you start comparing spreads, then Oanda is perhaps not that good. For instance, I conducted spread study as part of my research on broker spread from 21 Nov to 10 Jan on EUR/USD and Oanda’s spread on numerous occasions spiked up to 15. However, spreads remained consistent under normal conditions. I agree that it may be the time to move brokers if spread is your main concern. Hope this helps.

5

On your research who did you find to be the best broker for spreads around News releases? I don’t want to be restricted around this time either when I see a nice setup?

6

Well I used an indicator on MT4 called Spread Recorder, what MB Application are you talking about? Is MBtrading your broker?

7

Just for the hell of it, I did it today again at 7:30pm NY time on AUDUSD right after the news release, even FXCM beats Oanda on spread. These guys are a joke.

https://www.dropbox.com/s/4l28q0whf97837w/AUDUSD-01302014.txt

8

Hi idude:
Actually, I use a tailor-made software to record spreads for brokers. Someone coded it for me. Therefore, I can retrace history for some popular brokers. Due to copyright restrictions and regular bugs, I am unable to offer more info. Anyway, please check myfxbook.com spread comparison for brokers. It will help you in making a final decision. At least, you can retrace spreads for more than 2 days, (max. 2 and half days). Believe me, it will really help you in sorting out a broker.

From US broker perspective, I found MB Trading spreads consistent. Also, try GFT. Its spreads on EUR/USD barely go above 3. Again, MB Trading claims to offer ECN whereas GFT is not.

9

I posted about my unhappiness with their wide spread on GBPJPY on another thread regarding Oanda, basically I had a stop which was taken out with Oanda, but on checking with fxcm and alpari uk rates, my trade would still be on and worse still, would go back at least 50 pips into profit. Thus I am very unhappy with Oanda for their ridiculously wide spreads during news release.

10

Oanda has been notorious for wide spreads on news [I][B]for as long as I can remember[/B][/I]. Do your research. Ask around, see what you’re getting into geez.

11

if i had to choose between trading with oanda and wrestling with a komodo dragon, which do you think i would choose?

they have umpteen versions of their platform and none of them work properly.

they have umpteen versions of their trading api and none of them work properly.

if you have a problem while trading there, good luck.

do you know that bill gates used to hold an investment in oanda? but then he dumped them.

12

Nothing like pulling up an 8 year old thread, lol.

I’ve been with OANDA for over 3 years and have never had an issue with them. In fact they call me regularly to check in.

I agree that their trading platform is pretty crappy, or at least it was when I used to use it 2 years ago. But when you have universal platforms like MT4 and TradingView then I guess most brokers don’t sink a lot into them. But, I don’t know anything about programing and API’s so that stuff doesn’t really factor in for me.

As for spreads, they’re pretty decent in my book:

image

13

I agree that their trading platform is pretty crappy
or at least it was when I used to use it 2 years ago.

i see they havent changed in over a decade.

But, I don’t know anything about programing and API’s
so that stuff doesn’t really factor in for me.

i have been programming for almost 40 years
i have used a few of their api’s, back when they used to charge $600/month to do so.
their api’s are the biggest bag of garbage that i have ever seen.

my bio detailing my programming history is in my recent post history.

their api’s were so terrible, omg, i dont even really want to think about it again.

i am a big fan of using a regulated broker, but this one goes against the grain.

even their metatrader installation is simply ugly.

will somebody please just shut down that hideously ugly company.

i am done.