What kind of activity does Oanda consider as scalping and prohibits?

C

CFerret

Hello everyone -

I'm testing waters in trading FX with the same method I used to trade index futs, but in doubt if Oanda allows trading activity which assumes 10+ trades a day with 5 pips stop-losses?

Maybe anyone has experience on what kind of activity is considered scalping by them and prohibited.

If this is a case, maybe I should better use FX futs (though of course would prefer Oanda for no slippage and flexible position size).

Thanks in advance!

Janis
 
Try going with an ECN model instead of a dealing desk model. A dealing desk has to offset your trade whereas an ECN provides straighthru processing in which your trades are matched with those of another trader in their liquidity pool. ECNs don't worry about losses on rapid trades since they take no sides. All they get out of it is the commission. Plus the spreads on ECNs tend to be tighter than you would find on a dealing desk. If rapid trading for small gains is your style, look at these first.

GL
 
They will definitely not mind such trading behaviour. Frequently trading during news is frowned upon, but that should be fine.
 
Thanks for answers. I simply settled down with IB's IDEALPRO after today when I tried Oanda spread for no obvious reason and without any warning became 10 pips around 9AM GMT.

This caused my order to be cancelled instead of entering a trade.
 
If your stop is 5 pips below your entry price, be prepared to get stopped out very often on any market maker platform. Almost every skalper has posted negative feedback on Oanda (and other similar companies). I wonder why that is.

As for the reason Oanda opens it's spreads, there must have been a news event during that time.
 
Quote from CFerret:

Thanks for answers. I simply settled down with IB's IDEALPRO after today when I tried Oanda spread for no obvious reason and without any warning became 10 pips around 9AM GMT.

This caused my order to be cancelled instead of entering a trade.
More...

There was a reason, and always is, that the spreads increased. At 9:00 cst - Consumer Confidence was released.

9am GMT, which I think is 3am CST, was German Ifo Business Climate Index & German Ifo Business Expectations Index.
 
I see about news, but it seems a bit rough to increase spreads so much in every news case (I can understand movers like jobs or FOMC, but every news?).

Idealpro didn't do this at that time.

As for being stopped out it's ok as long as it goes with a plan, at least today with Idealpro I wasn't stopped out by mistake.

Oanda would be OK too if not this news spreads increase. I suspect that as there are often some news this can happen very often.
 
IdealPro works on an ECN model in which they have multiple liquidity providers quoting the pairs throughout. At present, IB claims they have 10 or more providers (banks and brokerages) that provide these quotes. This helps allay such wide moves you see from some dealing desk brokers.

Oanda's model is different in that they are a dealing desk. Their liquidity providers are not as deep as IB. They also use some mathematical algorithm to determine prices throughout the day, so I am sure they price news into this formula.

I use IB and I like the spreads and the liquidity. I have been able to push 5-10MM size lots without a problem. But it has it drawbacks - if you do crosses (i.e. EUR/GBP, then you have a margin on both sides of that pair relative to your base account currency as opposed to other firms which only hit you on one side of the trade.) Also, IB does not represent all the tradeable currency pairs that Oanda has, such as NZD, which I love to trade along with AUD.

Each has their pluses and minuses. Neither are perfect.
 
Quote from CFerret:

I see about news, but it seems a bit rough to increase spreads so much in every news case (I can understand movers like jobs or FOMC, but every news?).

Idealpro didn't do this at that time.

As for being stopped out it's ok as long as it goes with a plan, at least today with Idealpro I wasn't stopped out by mistake.

Oanda would be OK too if not this news spreads increase. I suspect that as there are often some news this can happen very often.
More...

You will find that the spread increase will vary on the pair as well as the news event. Go to forexfactory.com and check their calendar. The events that show red, are the ones where you can expect the wider spreads. The wide spreads only last for a minute or two.
 
Quote from cstfx:

IdealPro works on an ECN model in which they have multiple liquidity providers quoting the pairs throughout. At present, IB claims they have 10 or more providers (banks and brokerages) that provide these quotes. This helps allay such wide moves you see from some dealing desk brokers.

Oanda's model is different in that they are a dealing desk. Their liquidity providers are not as deep as IB. They also use some mathematical algorithm to determine prices throughout the day, so I am sure they price news into this formula.

I use IB and I like the spreads and the liquidity. I have been able to push 5-10MM size lots without a problem. But it has it drawbacks - if you do crosses (i.e. EUR/GBP, then you have a margin on both sides of that pair relative to your base account currency as opposed to other firms which only hit you on one side of the trade.) Also, IB does not represent all the tradeable currency pairs that Oanda has, such as NZD, which I love to trade along with AUD.

Each has their pluses and minuses. Neither are perfect.
More...

Well, my scalping FX instruments are restricted to EURUSD and maybe USDJPY, so IDEALPRO seems to fit perfectly for this.

And for swing trades brokers doesn't matter that much i guess.
 
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