OANDA cheating ?!
- Thread starter NickBarings
- Start date
Why is this completely wrong? Though Oanda does not disclose their hedging mechanism, this is almost certain the basic concept for hedging positions applied by Oanda.
Misha7,
That's EXACTLY how it works !
If they can't match customers orders
on which they make exactly the spread
(market making),
they take the other side of the trade
and hedge in the interbank market
if necessary on which they make their
spread displayed minus the interbank
spread.
So the more customers they can macth
internally the more they make.
I know this so precise because I know someone who works there.
Trent,
The average spread for the EUR/USD in the interbank market is less than
1.5 pips(Oanda's spread) so if
they can't match internally they still
make money by offsetting in the
interbank market.
That's EXACTLY how it works !
If they can't match customers orders
on which they make exactly the spread
(market making),
they take the other side of the trade
and hedge in the interbank market
if necessary on which they make their
spread displayed minus the interbank
spread.
So the more customers they can macth
internally the more they make.
I know this so precise because I know someone who works there.
Trent,
The average spread for the EUR/USD in the interbank market is less than
1.5 pips(Oanda's spread) so if
they can't match internally they still
make money by offsetting in the
interbank market.
I saw 1.2 pips on Oanda today....
OK, guys you asked for this...
1) Why are you talking about the "Interbank" (aka Inter-bank, or as some genius put it on another forum "Innerbank"
)?? Is Oanda a bank? No.2) The Interbank spread is not "1 pip". It varies, can 1 or 2 or more depending on market conditions. But you see that don't matter 'cause Oanda is not a freaking bank. Get it? I can bet you anything that Oanda gets on average 1.5 -2 point spread from whoever their liquidity provider is (Deutsche, JPChase, UBS, whatever).
3) EVEN if you assume that you get 1 pip and quote 1.5 (i.e. quarter point on each side) how the f*** are you going to make 0.5 pips?
4) Last time I checked Oanda had no minimum. Try calling Deutsche and selling them yr $1 position as a 'hedge'.
This can go on, but it's getting boring. Anyway, no broker will hedge individual trades unless it's a substantial client (e.g. 10 mil and up). There is just no physical way to do it with rapidly moving prices, hundreds of trades per minute and miniscule volumes for every trade. What they may hedge is the net position of the dealing desk. But considering the amateurs that work on most of these dealing desks (e.g. FXCM, CMS) I doubt that they ever do even that.
Whether you manipulate prices is a fundamental question of ethics, and has little to do with hedging.
Quote from misha7:
OK, guys you asked for this...
1) Why are you talking about the "Interbank" (aka Inter-bank, or as some genius put it on another forum "Innerbank"
2) The Interbank spread is not "1 pip". It varies, can 1 or 2 or more depending on market conditions. But you see that don't matter 'cause Oanda is not a freaking bank. Get it? I can bet you anything that Oanda gets on average 1.5 -2 point spread from whoever their liquidity provider is (Deutsche, JPChase, UBS, whatever).
3) EVEN if you assume that you get 1 pip and quote 1.5 (i.e. quarter point on each side) how the f*** are you going to make 0.5 pips?
4) Last time I checked Oanda had no minimum. Try calling Deutsche and selling them yr $1 position as a 'hedge'.
This can go on, but it's getting boring. Anyway, no broker will hedge individual trades unless it's a substantial client (e.g. 10 mil and up). There is just no physical way to do it with rapidly moving prices, hundreds of trades per minute and miniscule volumes for every trade. What they may hedge is the net position of the dealing desk. But considering the amateurs that work on most of these dealing desks (e.g. FXCM, CMS) I doubt that they ever do even that.
Whether you manipulate prices is a fundamental question of ethics, and has little to do with hedging.
The profit from hedging positions internally is huge. One long position against one short position in the same currency is 2 times the spread. Only positions which can not be hedged internally have to be hedged at the interbank market. Oanda could make a small profit or maybe a small lose, it really doesn't matter. As long as the (huge) profit from internal matching offsets the small lose from external hedging, Oanda profits.
The Oanda network is completely automatic. A good algorithm should be able to hedge the net exposure at the interbank market. Also, the 'interbank market' is not exclusively used by banks. It's just the name.
Would appreciate answers from people who have traded on the Oanda live platform for a while and who make good money.
Can you hit them in any size you like up to an amount of say ten million per trade.
What is the widest quote you have seen on euro/dollar in the most volatile times eg the second the non farm payrolls are are published?
Has anyone ever been put on manual execution?
How quickly do they confirm trades when it is busy/volatile? What happens if you say hit a bid at 1.2150 but you have missed it by the time their computer recieves the trade - are you shown the next bid or just dropped?
Many thanks.
Can you hit them in any size you like up to an amount of say ten million per trade.
What is the widest quote you have seen on euro/dollar in the most volatile times eg the second the non farm payrolls are are published?
Has anyone ever been put on manual execution?
How quickly do they confirm trades when it is busy/volatile? What happens if you say hit a bid at 1.2150 but you have missed it by the time their computer recieves the trade - are you shown the next bid or just dropped?
Many thanks.
I have seen 30 pip spread...once...
As far as missing orders, I never have? That's the truth...I use both market orders without any slippage that I can remember and limit orders always fill at their specified price..
I was not aware of Manuel Execution at Oanda. I do not believe they have that. If you practice "picking" they will simply cancel your account.
My orders are not in the 10 million dollar range and I usually do not use that much leverage. I place many scaled trades which may add up to a "half a lot" at times, but I only have 5k in my account and am small potatoes...
During busy times you get filled, but sometimes it seems like the report back takes longer than it takes the trade ticket to punch through..I do not trade news other than it may trigger some levels or long standing limit orders that I have or watch...
I find trading Forex and using Oanda fits my style of trading perfectly. I use almost every feature on their platform...There are so many ways to take money out of the market, really the key is to use your tools to their max and fit a strategy around them. Stay consistent and take the slow and steady route to making money in Forex.
Michael B.
As far as missing orders, I never have? That's the truth...I use both market orders without any slippage that I can remember and limit orders always fill at their specified price..
I was not aware of Manuel Execution at Oanda. I do not believe they have that. If you practice "picking" they will simply cancel your account.
My orders are not in the 10 million dollar range and I usually do not use that much leverage. I place many scaled trades which may add up to a "half a lot" at times, but I only have 5k in my account and am small potatoes...
During busy times you get filled, but sometimes it seems like the report back takes longer than it takes the trade ticket to punch through..I do not trade news other than it may trigger some levels or long standing limit orders that I have or watch...
I find trading Forex and using Oanda fits my style of trading perfectly. I use almost every feature on their platform...There are so many ways to take money out of the market, really the key is to use your tools to their max and fit a strategy around them. Stay consistent and take the slow and steady route to making money in Forex.
Michael B.