OANDA Accounts

Forex accounts are trading accounts held by a trader with a company like OANDA. These are primarily created to trade in different currencies.

Usually, the type and quantity of accounts that a trader can open with a broker company like OANDA differ according to the country in which the brokerage operates, the residential country of the trader, and the regulatory authorities under whose jurisdiction the brokerage operates.

Types of Accounts and its Features

There is only one type of account openable at OANDA, but the company does allow anyone keen to try trading to play with a demo account first. Traders can open up to 19 sub-accounts to trade with different base currencies under a single account.

A trader can become a Premium client once a $50 000 deposit is made, and this comes with the benefits of custom pricing and tighter spreads.

Deposits and Withdrawals

OANDA charges no deposit fees so traders using OANDA can use their debit cards for deposits. There are also no minimum deposits.

Withdrawal generally is free, but bank transfers incur high costs. You also get charged more if you withdraw more than once monthly with your card.

Depending on the trader’s country of origin, transfers to and from trading accounts can also differ.

Traders depositing via PayPal will pay £0.35 per transaction plus 1.4% of the transferred amount.

With OANDA withdrawal policies vary according to the division of the company. Mostly, transactions via bank transfer, wire transfer, or credit cards are free of charge for the first request in a month, but it may cost more if you withdraw more funds. Money can also only be withdrawn to accounts registered in your own name.

Cost and Fees, Commissions and Spreads

The amount you pay when trading will depend on different dynamics such as commissions, spread, and margins.

Spread means the difference between the bid and the asking rate. Pips represent the smallest increment that an exchange rate can increase or decrease.

One pip is 0.01 for currency pairs with JPY as the term currency and 0.0001 for all other pairs.

The margin is known as the amount of cash needed in your account to open a position. This is established based on a few factors.

The price of the base currency against USD, the size (volume) of the position, and the leverage applied to your forex trading account all play a role.

The commission is a charge levied by a broker for trading on your behalf and commissions will never be the same between different brokerage companies and will vary depending on the asset traded and the type of service offered.

Execution-only brokers never offer investment advice, but allow traders absolute control over market trading. They ask to have commissions.

Contract for differences (CFDs) trading is a type of derivative trading that allows those interested in trading to speculate on the rising or falling prices of fast-changing international money markets and will incur commission.

CFD trades on other markets charge no commission but will wrap a spread around the market price of a certain instrument.

OANDA’s fees are a bit better than the industry standard as they charge low CFD and forex amounts. Non-trading fees are low too, but OANDA catches you with their withdrawal fee for bank transfers. It is quite high.

Despite this, OANDA’s EURUSD fee is also more than the average. Their CFD trading fees are lower than competitors and their non-trading fees are average.

There is no fee to put money in or withdraw from debit/credit cards. OANDA charges a low fee for PayPal withdrawal, but bank withdrawal fees are much higher. If you don’t trade and your account becomes dormant for two years, OANDA charges $10 per month.

OANDA’s bid/ask spreads (fees clients pay to trade) compare well to the competition. The minimum spread price OANDA charges is a bit steeper.

OANDA’s spread is determined through a platform connected to international banks that get the best foreign exchange and CFD rates.

OANDA prices are transparent and they always publish a trailing average of its average spread across nearly all timeframes.

Leverage

This process allows traders to get better exposure to the market compared to the total cash deposited to open a trade. Leveraged merchandises allow for a bigger profit, but comes with larger risk.

Leverage is a ratio, for instance, 50:1, 100:1, or 500:1. For example, if you have $1,000 to trade in your account and the trading ticket sizes are 500,000 USD/JPY, the leverage is 500:1.

The OANDA fxTrade platform supports this, so you can trade positions larger than your account balance at 1:50.

Bonuses

New traders are often lured with deposit bonuses, which are useful, but you need to know what it means.

It is a way to compensate traders for picking the brokerage and returns some of the expenses of opening an account to the trader once the account is active.

It is a great way to help you start but look out for the terms. Some require high volumes of the trade before you are allowed to withdraw.

The European Securities and Markets Authority (ESMA) placed restrictions on the marketing, distribution, or sale of CFDs to retail clients in 2018. This prevents brokers from directly or indirectly provide the retail client with a payment, monetary, or excluded non-monetary advantage.

OANDA does not provide any information about bonuses on their website home page.

Trading Platforms, Software, and its Features

Software provided by the company is called a platform and those trading use this to trade. They can represent multiple assets like forex, CFDs on stocks, stock indices, precious metals, and cryptocurrencies.

The platform choice will depend on what the client wants to trade.

OANDA developed its very own fxTrade, an easy-to-use, award-winning platform. It offers functional access to trading, which includes advanced charting tools, chart pattern recognition, institutional quality backtesting, and finance news.

OANDA’s fxTrade platform is powered by TradingView and web, desktop, and mobile trading is supported.

OANDA still offers MetaTrader4 (MT4) as well as MetaTrader5 (MT5) and a self-designed feature called OANDA Forex Labs, featuring Forex Analysis, Signals, and FX Tools. Other supported platforms from third-party developers include Seer Trading Platform, NinjaTrader, MultiCharts, and MotiveWave.

Markets, Products, and Instruments

Brokers offer all or some of the following instruments for trading:

Forex

Forex trading, also called FX trading, involves the currency exchange market where individuals, companies, and financial organizations exchange currencies at floating rates.

Commodities

Like currency exchange markets, commodity markets offer different investment opportunities for traders such as the trade of goods.

Indices

Equity or stock indices are actual stock market indexes. This determines the value of a specific section of a stock market.

Indices can represent a specific set of the largest companies of a nation or can represent a precise stock market.

Precious metals

Gold and other precious metals are contract-based tradable hard commodities that can be traded.

Energy

Energy prices are extremely volatile due to environmental factors, political influence, supply and demand, extreme weather, and international economic growth. This makes it a popular trading option.

Cryptocurrencies

The digital currency Bitcoin (BTC) has gained traction with the largest market capitalization and price levels since it first started in 2008. Currently, it dominates half of the total crypto market cap.

Litecoin (LTC) is another alternative but differs in terms of scalability.  Litecoin is another very popular altcoin and LTCUSD is a fork of Bitcoin (BTCUSD).

It is copied from Bitcoin’s code but with a few changes.

Another alternative is Ripple (RPL), a popular option among big banks with the Ripple network, a next-generation real-time gross settlement system. Money can be transferred across borders at very low costs.

After Bitcoin, Ethereum (ETH) is the second-largest cryptocurrency and allows developers to create smart contracts on a platform.

Bitcoin Cash (BCH) was created in 2017 by the Bitcoin hard fork as a new version of the blockchain with different rules.

Traders at OANDA can trade forex and CFDs, with fewer forex pairs but more CFDs than most of the competitors.

OANDA’s wide selection of CFD products includes a stock index, bond, and commodity CFDs.  Market ranges may vary depending on the OANDA entity where an account is established, for example, CFDs are not available in the United States, OANDA offers Bitcoin as a CFD.

Safety and Regulation

OANDA is heavily regulated and authorized by numerous government agencies as it operates over various jurisdictions all over the world.

There are authorities in every single country where OANDA operates:

• OANDA Corporation is a registered Futures Commission Merchant and Retail Foreign Exchange Dealer with the Commodity Futures Trading Commission and is a member of the National Futures Association. No: 0325831.
• OANDA (Canada) Corporation ULC accounts are available to anyone with a Canadian bank account. OANDA (Canada) Corporation ULC is regulated by the Investment Industry Regulatory Organization of Canada (IIROC), which includes IIROC’s online advisor check database (IIROC Advisor Report), and customer accounts are protected by the Canadian Investor Protector Fund within specified limits. A brochure describing the nature and limits of coverage is available upon request
• OANDA Europe Limited is a company registered in England number 7110087, and has its registered office at Floor3, 18 St. Swithin’s Lane, London EC4N8AD. It is authorized and regulated by the Financial Conduct Authority, No: 542574
• OANDA Asia Pacific Pte Ltd (Co. Reg No 200704926K) holds a Capital Markets Services Licence issued by the Monetary Authority of Singapore
• OANDA Australia Pty Ltd is regulated by the Australian Securities and Investments Commission ASIC (ABN 26 152 088 349, AFSL No. 412981) and is the issuer of the products and/or services on their website. It’s important for you to consider FSG, PDS, account terms, and any other relevant documents before making any financial decisions.
• OANDA Japan Co., Ltd First Type 1 Financial Instruments Business Director of the Kanto Local Financial Bureau (Kin-sho) No. 2137 Institute Financial Futures Association subscriber number 1571.
• OANDA Europe Markets Limited is a company registered in Malta number C 95813 and has its registered office at 171, Old Bakery Street, Valletta. It is authorized and regulated by the Malta Services Authority as Category 3 Investment Services Licence Holder to provide services to the residents in the European Union.
• OANDA Global Markets Ltd is a company registered with BVI number 2026433, and its registered office is at Kingston Chambers, PO Box 173, Road Town, Tortola, British Virgin Islands. It is authorized and regulated by the BVI Financial Services Commission, number SIB/L/20/1130.

A potential trader needs to establish first whether a broker like OANDA is safe to trade with. One of the best methods to measure this is to establish which regulating authorities play watchdog for the company.

All customer funds are fully segregated, where it is kept in top-tier bank accounts and is protected by negative balance protection. OANDA is not publicly traded and does not run a bank.

In the United States, OANDA is regulated by CFTC. FCA regulates OANDA in the United Kingdom, ASIC in Australia, IIROC in Canada, MAS in Singapore, and the FFAJ is OANDA’s watchdog in Japan. OANDA Global Markets Ltd – operating in the emerging markets (regulated by the FSC in the BVI).

Customer Support

Potential traders need to ensure that the broker company can offer support and help where it is needed.

Traders can contact OANDA in several ways:

OANDA can be contacted in numerous ways. These methods include live chat on the website, a chatbot, by phone, and by email.

Some features are available 24 hours a day, but OANDA’s live chat and phone support apply between Sundays and Fridays. The only issue with the chatbot is that it is not always able to answer all questions.

Research

Traders should always research as much as possible before embarking on trading. If you do your homework, you will trade with much more confidence.

Your success relies on your understanding of markets.

OANDA offers options to make this journey much easier. They offer research tools, such as news, technical analysis, and API.

MarketPulse offers articles plus a feed by Dow Jones Newswires that provides information and news. You will also find economic analysis there.

OANDA Labs offer tools in multiple languages.  OANDA’s charting tools are responsive, easily editable, and offer the use of more than 70 technical indicators. OANDA has great API options and you can use your own APIs in a user-friendly environment.

OANDA’s MetaTrader4 (MT4) platform stream offers news from Reuters, MarketPulse, MarketWatch, Mainichi, and CNBC

Education and Training

Before starting, potential OANDA clients should open their minds to the information and trading skills needed to be successful. If OANDA’s website doesn’t provide enough information, explore other informative sources.

OANDA’s tools include a demo account to practice, educational videos, tutorial videos, webinars, and texts.

Conclusion

OANDA is a good choice when picking a forex broker. Although OANDA’s spreads are not among the tightest and the leverage is capped to 1:200, OANDA is certainly a good option.

Disclaimer

OANDA warns potential traders that Forex and CFDs trading comes with a level of risk and may not be suitable for everyone.

Before making the choice to trade any products offered by OANDA, traders are advised to contemplate their investment objectives, needs, financial situation, and experience level.

When traders use OANDA ’s margin leveraged accounts, they should maintain a sufficient level of margin to sustain positions, since trading Forex/CFD and Options on margin carries plenty of risks. Utilizing higher than necessary leverage can backfire and you can lose some or all of your initial investment.

While OANDA makes all efforts to fill a trade at the price requested, online trading does not reduce risks associated with exchange trading. Quotes and trades are usually bound to terms and conditions, which can generally be found through the company website.

Future traders should familiarise themselves with all the threats when it comes to trading on margin and ensure they find advice from a financial advisor if they are unsure about anything, shows research recently conducted.