Quote from BigEasy:
It seems that if any brokerage was appropriate for an under capitalized account it would be Oanda, since you can trade $1 if you want.
Which is also interesting if you want to trade a lot of pairs simultaneously and have a special money management/position sizing algorithm to apply, in which case a regular lot may be too big (for your capital).
What problems did you run into due to insufficient capital?
Mostly incapacity to cover the monthly fee which, added to losses, would have quickly drained my account. Generally, I was undercapitalized but most of all, I had a losing system/strategy. So I had to work on a new system while my program was accumulating data without trading for backtesting (my system was high frequency so the data available from other sources was completely worthless). But then it wasn't discounting the monthly fee by generating transactions volume. So I was basically losing money either by trading or not trading.
As I vitally needed the intraday data, I had to maintain my API access. The only solution was to quickly modify my existing system, backtest/optimize it and increase the leverage to compensate for the lost transaction volume, which was vastly increasing my risk on a known previously losing system. Of course it didn't work : I needed a completely new trading model but didn't have the time to conceive it. Added to the fact that I was trading borrowed money, not mine, this was starting to be a very stressful game !
Am I inferring correctly that you no longer use the Oanda API? Why stop?
Yes I no longer use it. I stopped because my trading model was not profitable anyway, but that was not due to the API. But I plan to get back to it when I have refunded my account and have a new model.
If one does discontinue the service, does he just stop paying the $600/month?
Yes but you have to notice them in writing (email) at least one month in advance, so you'll have the monthly fee for the current month plus the last month.
What if you want to start up again?
If you terminated the API agreement, I guess you'll have to sign a new one and pay the initial fee of $600 again.
Any help appreciated. I'm nearly ready to embark on this path... my team has finally got their systems working well in simulation. Thanks!
Not to bother you but the only reliable simulation I can think of is the program trading realtime on an FXGame (demo) account for a while. Until you've done that, you can have an unwelcomed surprise, like the one I had (that is, if you're trading high frequency and don't have very reliable high-frequency historical data).
