Anyone Trading Oanda?

Discussions about trading the Forex markets.
Forum Mgmnt
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Anyone Trading Oanda?

Post by Forum Mgmnt » Thu Apr 22, 2004 9:56 am

I just opened an FXGame account so I could learn more about the capabilities of the retail FX systems.

My first two trades were profitable but I noticed something really lame that caused me some concern.

I had a long position with 500,000 EUR/JPY bought at 129.96 things ran in my favor after a bit and I placed a stop one pip below the bottom of the last 10 to 20 bars at 130.02.

Oanda took me out of the position when the BID went to my stop even though no actual trade took place there. If you look at the 1 minute chart the price was not penetrated. Of course it then proceeded to immediately go to 130.35 and I would likely have kept this position for many days.

Now, this is just play money at this point so I'm only slightly annoyed but I would really not like this behavior if I was actually trading.

That one "feature" cost me over $1,000 in a $100,000 account.

Does anyone use Oanda? Is this really how their stops work? Does anyone think this is useful behavior?

- Forum Mgmnt
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Nic Garvey
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Post by Nic Garvey » Thu Apr 22, 2004 11:45 am

I use OANDA, for real trades on FXTrade and this is exactly how it works. The chart data correspond to midpoints. If EURUSD is trading 1.2000/02 then the chart shows 1.2001. As long as you remember to add the spread it’s no problem as far as I’m concerned. On each trade that my system produces I add half the spread to get the order for OANDA. So, if my system says go long at 1.2004 on EURUSD, and EURUSD has a 2 pip spread, I enter an order to go long at 1.2005. I found this out during the game as well and was annoyed, but I’m pretty sure they document this. Does it work differently at other online FX market makers?

By the way, I don’t think there is any way to tell whether the market traded at a particular price or not at OANDA. The market is simply their bid and ask, there doesn’t need to be any trades for their prices. It could be at 1.2000/02 and move to 1.2001/03 with no trades and back to 1.2000/02 as far as I’m aware. The only thing stopping them from gunning for stops is arbitrage – although you might want to check this on their forums. Michael Stumm is president of OANDA and usually answers all such questions on the forums.

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Post by Nic Garvey » Thu Apr 22, 2004 3:52 pm

It seems someone else had this problem last night. Here's his post:

http://www2.oanda.com/cgi-bin/msgboard/ ... p=1#000004

and OANDA's explanation:

"The FXTrade platform will never trigger an order if the execution price has not been reached. If you are using the Close Price, Candlestick, HLOC, or HLC chart overlays your order may appear to be out of bounds. Please make sure you are using the Min-Max chart view when examining your trades."

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Post by Kiwi » Thu Apr 22, 2004 8:37 pm

I have an oanda game account and have just opened a GFT account. In both cases you have to be very careful about where you place stop and limit orders. In oanda's case they use the mid point and you have to put your stop 1pt outside of the pt you want to stop but put your limit one point inside the point you want to trigger.

In GFXs case it is similar but more difficult to figure. They show the bid and you have to figure the ask ... you can work out the rest but I have to write it down very carefully before I do it live. I chose GFT for the guarateed stops. After reading all the complaints on the oanda board about the slippage I decided that 3pts guaranteed might be better than 2pts doubtful.

Another thing to be aware of with Oanda is that a limit isnt a limit ... its more of a market if touched order. You need to specify zero "slippage" to make it a real order. At least thats my interpretation of the posts.

John
Last edited by Kiwi on Wed Apr 28, 2004 3:34 am, edited 1 time in total.

Chris67
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Post by Chris67 » Fri Apr 23, 2004 5:54 am

Forum Mgmnt,

Thats exactly how my real trading account works with cmc : deal4free.com .. HOWEVER .. matching off against this problem is guranteed fills in fx for stops .. although its not explicitly stated in their rule book after 5 years of trading on cmc ive never taken any slippage on an fx stop loss .. however if i have a stop in the euro to buy at 1.1950 for example and their price goes 47/50 i will be taken out even if the price collapses from this point and 50 never trades.. ( although they are good at trying to ensure the real fx market has traded there before stopping you and if you aregue with them they'll usually re-instate the position )

So the big question becomes does the impact of no slippage on stops override the instances where the above happens ( it doesnt happen that much ) .. i cannot backtest this but can think of probably 5 instances in the last 3 years where the euro or usdchf instantly moved 100 pips through my stop and I was done at my stop ..my gut tells me that if you were able to backtest that the zero slippage would far outweigh the odd occasion when your scenario existed ,, and even then if the market doesnt trade at the level theyll probably reinstate you //??

Hope this helps

Chris

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Stop Loss in Forex

Post by brendo » Sat Apr 24, 2004 6:29 am

c.f.

This issue is argued every day in the wholesale Forex markets where often a price is only seen traded because a Stop-Loss is triggered.

Because most Forex trading houses promise and deliver zero-slippage, they have no real option but to hit stops when the price is seen on the other side of the bid/offer spread. If they don't, they may incur slippage as they'll then have to trade on the next available price.

Do I make sense?

Brendo

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Forex and Stoppies

Post by brendo » Sat Apr 24, 2004 11:13 pm

Guys,

....just following on from above, one obvious solution would be to impose your own slippage when placing a S/L order.

For example if you are LONG a unit of USD/JPY at 110.50 and your 2 ATR S/L calculates at 108.80, you could always place the actual S/L order one spread worse that your intended S/L and thus place it say 108.75...

In the wholesale Forex markets, Stops are a real pain for the party (bank) holding the order. Unlike T/P (limit) orders you can't really make money from them, and often one of 3 things will happen:
- The bank will wear the slippage and incur a loss
- The client will wear the slippage and complain
- The client will complain that the stop was done too early or should never have been triggered.

Some desks have from time to time tried to limit the number of stops a counterparty can place e.g. all stops must be matched by an entry or limit order. This sort of limitation would certainly hinder a Turtle Trader that exclusively places Stops....

Having worked on both sides of the market, I truly believe that the better quality retail Forex shops perform a very good Stop/Loss service...(much better than the large French Bucket Shop I last worked for!!!!) :roll:

Brendo

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Re: Anyone Trading Oanda?

Post by FrankWala » Wed Apr 28, 2004 1:46 am

I am looking at fxcm.com and gft forex. Prices on both dont match. and sometimes I wonder if the currency brokers are 'the bucket shops of the 20 th century' I have a demo account at fxcm and GFT.

I was long GbpUsd from time 3.47 from 1.7927. Suddenly I was taken out by GFT at time 5.06 at 1.7932.

The
o 1.7959
h 1.7971
l 1.7891
c 1.7935

The price went from 1.7940 --> 1.7891 --> 1.7940 in 3 ticks. I had a trailing profit approx. $ 800. and I was taken out for a profit of $ 200.

I checked the price for the same timeframe from FXCM , and they dont show the 1.7891 price.

Something similiar has happened 2 times before at GFT.

Jpeg chart is at the bottom.

I am seriously considering opening a account with fxcm or gft; now I am RECONSIDERING.

Frank

**********************************************
I had a long position with 500,000 EUR/JPY bought at 129.96 things ran in my favor after a bit and I placed a stop one pip below the bottom of the last 10 to 20 bars at 130.02.

Oanda took me out of the position when the BID went to my stop even though no actual trade took place there. If you look at the 1 minute chart the price was not penetrated. Of course it then proceeded to immediately go to 130.35 and I would likely have kept this position for many days.

Now, this is just play money at this point so I'm only slightly annoyed but I would really not like this behavior if I was actually trading.

That one "feature" cost me over $1,000 in a $100,000 account.

Does anyone use Oanda? Is this really how their stops work? Does anyone think this is useful behavior?

- Forum Mgmnt[/quote]
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GBP_GFT.JPG
GBP_GFT.JPG (33.38 KiB) Viewed 25188 times

Kiwi
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Post by Kiwi » Wed Apr 28, 2004 3:32 am

Frank,

Open an oanda trial account as well. Of all of them it tracks the futures movements most closely.

I have a gft account now but am still trading futures. I understand that IB will be offering a "good" cash option as well so am waiting to see what that is as well.

John

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Post by batuco9 » Wed Apr 28, 2004 9:32 pm

In line with my comment on the CSI Forex Data thread, I wonder which one would most closely track Reuters or Bloomberg, which are institutional standards.

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Post by Ronny » Mon Jun 28, 2004 5:30 am

Nic,
I'm about to register for real FXtrades with Oanda, and since you mentioned you've been using them, I'd like to know if they are safe when withdrawing your money. I'm a bit worried about sending my money overseas and never seeing it again.
From your exprience, have you always recieved your money when withdrawing ?

Thanks,
Ronny.

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Post by Nic Garvey » Mon Jun 28, 2004 10:02 am

Ronny,

I haven’t withdrawn any of my account, so I can’t help you with my personal experiences. From regularly reading the forums it seems that problems occasionally arise with withdrawals taking over a week, but I’ve never seen anyone claiming that they haven’t received their money.

I did a quick search for “withdrawâ€

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Solution

Post by SMKJ » Tue Jun 29, 2004 5:43 pm

I trade Forex using Refco as my broker... here are a couple solutions I would like to offer

a) Lengthen your time frame with wider stops
-If you trade on a longer time frame with wider stops, it's less likely that you will be right about the direction of the trade but still loss money b/c you stops got knocked out.

2) Place your stops wisely - Remember what Bruce Kovner said
-I use a weighted stnd deviaiton algorithm <I call it..Adj. Std. Dev. or..ASD>to find the "noise" of the system <kinda like ATR> and then place my stops at a point BEYOND two ASDs that way, I know I am wrong for sure if it's hit. So that my stops won't get touched off if I am right about the direction of the market. Of course, I was not smart enough to come-up with the idea...I stole it from Bruce Kovner's interview in Market Wizards... where he says something like.."place stops at a place where you know you will be wrong for sure..."

3) Beware of "Stop Sweeps"
-When approaching a significant number... there can be increased volatility in the price action b/c a lot of the bigger players knows the stops are around those points and like to gun for the stops. For example, look back a bit to see when GBP/JPY was first approaching 2.000 in early May. A very significant number.... The market gapped higher all the way to 2.02....but then actually took a nose dive right back down to around 197. So what happened? All the people who put on or increased their long position when 2.000 was broken and placed their stops just below 2.000...got slaughtered. Of course, the market soon reverted and went to around 201 by the end of the week. So for all those ppl who were long but were stopped out...they actually lost $ even though they were right about the market direction.

For the big instititutions with the ability to cause some action in the market (albeit temporarily...), hitting those stops is like..free money. My friend at Citi says that they do it all the time, especially for the less liquid currency pairs that Citi is able to exert more influence. So the lesson here? Yes, it hurts a bit more when your stops are wide and they get hit. But by making your stops just a bit wider, you acutually greatly decrease the chance of it being hit.

d) Application: What I am doing now
Now..lets see...the same trade....I am actually short GBP/JPY right now. If you look at the charts, you will note that it reached a low of 194 last week with a high of 198+ this week. That's a 400 pip swing... Now...I start to scale out if the trade goes the wrong way.... but right now, the stops placed at the last "batch" of my scaling out is actually at 201.10, b/c I know if it actually goes there, I am WAY WRONG. Yes, is that a wider stop than most ppl can stomach? For sure~! But has it kept me in the trade from 199.98 to 195.57? Yes.

e) Beware
-It's tough to see a position lose money..even if it hasn't hit your stops. Beware of the temptation to prematurely close your position before the stop is hit. I avoid it by using weekly charts, and only placing orders when Tokyo opens on Sunday nites and NY opens on Monday mornings. The rest of the time, I do my system testing, I do research, I read books about the markets, but I don't look at the price action.

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Post by Ghostrider » Thu Jul 08, 2004 3:23 pm

This happens in the FX markets all the time. Don't waste time with an online broker. It's good for the guy who has a 100K to trade but if you have any size, open an account with a real bank and trade directly through a dealer. If you must trade on line there's one way to do it and you get much better fills than with fxcm or anyone else, so shop around and you'll see what I'm seeing, too.
GR

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Forex brokers

Post by traderDJ » Thu Jul 08, 2004 4:02 pm

I've spent six months researching and demo trading Forex brokers. Finally, I decided last week to open a live account with Oanda, based largely on the lower spreads and better-than-most reputation. I'm also considering HotspotFX. Anyone tried HotspotFX's platform or trading live with them?

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Re: Forex brokers

Post by FrankWala » Fri Jul 09, 2004 11:10 am

I looked at Oanda, FXCM and GFTForex. My criteria for selection was
1 Safety of Principal,
2 Reputation of firm, length of time in business, opinions of fellow traders (whom I respect) of the broker
3 Bid Ask difference (spread)

I finally decided on a stop-gap approach; take the prices from the cash market and trade the CME euro (ECU 04) . I am paper/real life trading the Euro this method ( I havent found the holy grail)

I did not feel comfortable with all three forex. All three forex firms were nice, have a good front and back end ; and let you paper trade. Moreover I have an account with IB(Interactive Brok.) The problem with IB is - I have to do the $ 250,000 contract where the spread is 3 pips. Anything below $ 250,000 the spread is 10 pips. That is a disadvantage( 10spread + 2 slippage)
Suggestions/criticisms welcome

Frank
San Diego
*********************************************************
traderDJ wrote:I've spent six months researching and demo trading Forex brokers. Finally, I decided last week to open a live account with Oanda, based largely on the lower spreads and better-than-most reputation. I'm also considering HotspotFX. Anyone tried HotspotFX's platform or trading live with them?

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Post by batuco9 » Fri Jul 09, 2004 5:50 pm

Not adding anything, but recall that there are also the interest differentials, or carrying cost, to look at. Going forward they can substantially outweight the pip spreads

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Post by fliesch » Sun Jul 11, 2004 9:17 am

It's really difficult to choose the right broker.

- Oanda: godd, cheap.. but heard from severals that slippage is a problem
- ACM: Know of people who are happy with, garanteed stops, just 3 pips in all majors. Very nice, but has been bougth by Refco lately.
- Big ones like FXCM/REFCO: Spreads are too big.
- fxall, currenex, hotspotfx: No idea, but if I want to use their API you will have to do size
- IB: I would reallly like to see that one, but just futures, just 250k contracts - no thanks

MY FAVORITE: CBFX and maybe later on fxall/hotspotfx. If you just want to test sth. Oanda is ok (you can trade with 1$Position).

BY THE WAY - IS THERE ANYBODY WHO HAS EXPERIENCE WITH FX-BROKER-APIs? I would like to trade several systems semi-automatically...

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Oanda Slippage

Post by batuco9 » Sun Jul 11, 2004 4:06 pm

Just a note: per their forums, it seems that Oanda revamped its trading engine and slippage has been reduced as of recent.

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I wonder

Post by Ghostrider » Wed Sep 08, 2004 6:42 pm

I read posts from intelligent sounding people, but I say, trading on owanda or fxcm?? I see these sites as an online casino, if you trade currencies trade the interdealer market. Anything less is unprofessional.

:P

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