If you make money, does Oanda make money? | Page 2 | Forex Factory

Options

Go to
Permalinks
Print Thread

Similar Threads

How much do you want to make and why do you want to make it 17 replies

Oanda users - Oanda widening spreads 62 replies

Does anyone know a website which does technical analysis for you? 5 replies

OANDA Canada vs OANDA Corp. 4 replies

How does your broker make money from you? 7 replies

If you make money, does Oanda make money?

  • #21
  • Mar 30, 2010 1:56am Mar 30, 2010 1:56am
Quoting Xaron
Yes they make money with the spread. Just look at interbank spreads and Oanda's spreads. Take the difference and multiply it with about 300 million transactions so far.

Regards - Xaron
Could you point me toward a website that you recommend for viewing the interbank rates?
The greatest force on earth is compound interest.
  • #22
  • Mar 30, 2010 8:25am Mar 30, 2010 8:25am
Remenber that when Oanda hedges it assumes a cost for it.
  • #23
  • Apr 25, 2010 7:58am Apr 25, 2010 7:58am
Regardless of whether you make money or not, Oanda or any forex broker will make money from its spread and rollover policies. Like any other businesses, as long as cost of running the biz ie hedging their net exposure plus overheads, is factored into their selling price ie their spread, rollover etc they will make money. A savvy casino will just let time and statistics make money for them as they have time on their side as the odds are always in their favor. Those players who can't manage their costs or have a lousy business model, will/may resort to underhanded methods in order to survive. I can't understand why a forex biz will try to "killoff" any of their customers as it is in their best interest for them to ensure a growing database of "longlived" prosperous customers. For a particular forex broker, it is not a zero sum game as it can be a win/win situation. Remember you are trading against the world. If I am the forex broker, I'd love all my customers to make money and grow with them. Of course someone else round the world may have to pay for your successes.

On the variable rates, I'd guess during news time, liquidity providers shirk away and as a result Oanda's rates will have to widen if it continues to operate its biz model on a fully hedged basis. I am amazed at those brokers who continue to offer fix rates during news times even when liquidity evaporates. This must mean those brokers are taking a gamble ie they must end up with unhedged exposure if their customers decided to trade during news times and they couldn't find a corresponding offset. And if the broker were to lose money during those times, they must find ways to make it back during non-news periods. So I am not surprised Oanda offers low rates during non-news times and wide spreads during news times.
  • #24
  • Aug 21, 2010 3:15pm Aug 21, 2010 3:15pm
oanda like volume.. would be nice to know the ins and outs of how they work
  • #25
  • Aug 22, 2010 6:23am Aug 22, 2010 6:23am
I think its more if you've prooven to them that you're a profitable trader they'll likely offset your positions in the market. Since you're profitable you'll likely trader larger sums of money and thus they earn a nice spread.

If you're like 95% of traders and lose more than you win then there's no reason to offset.
  • #26
  • Aug 22, 2010 6:45am Aug 22, 2010 6:45am
yeah all real brokers have that, I wonder what the threshold is in this case
  • #27
  • Aug 22, 2010 1:55pm Aug 22, 2010 1:55pm
I see it as a potential conflict if they take the opposite side of your trades given they see your stop, pending orders, etc. and have all your account history.

a good broker will just make money on the spread at the time you place the order. I have no idea what Oanda does though...
BarrySDCA Commercial Network Services
  • #28
  • Aug 22, 2010 2:15pm Aug 22, 2010 2:15pm
Quoting BarrySDCA
I see it as a potential conflict if they take the opposite side of your trades given they see your stop, pending orders, etc. and have all your account history.

a good broker will just make money on the spread at the time you place the order. I have no idea what Oanda does though...

How Market Makers Work
Market makers "make" or set both the bid and the ask prices on their systems and display them publicly on their quote screens. They stand prepared to make transactions at these prices with their customers, who range from banks to retail forex traders. In doing this, market makers provide some liquidity to the market. As counterparties to each forex transaction in terms of pricing, market makers must take the opposite side of your trade. In other words, whenever you sell, they must buy from you, and vice versa.
  • #29
  • Aug 22, 2010 2:36pm Aug 22, 2010 2:36pm
MM's like Oanda are really traders just like you and me, only they are much much bigger in terms of account size and trade size. Just like casinos, they are really players like us only they are bigger. They act as intermediate traders and trade with us and trade on behalf of us with aggregate of us in the Interbank market.

So do MM's like Oanda make money? Of course they do, if they themselves trade well and manage their cost well just like us individual traders. Just like us, if they don't manage their cost well and/or trade badly, then they fail.

Eventually though, when the retail Forex market develops to the point that it has large enough trade size and trade volume to match the interbank market, there will only be ECN's and there will be no need to have MM's just like the stock market. But as long as there are individual traders who trade only in mini lots, there will always be a need for MM's like Oanda.
Make your losses in demo. Earn your profits live.
  • #30
  • Aug 22, 2010 2:44pm Aug 22, 2010 2:44pm
Quoting BarrySDCA
I see it as a potential conflict if they take the opposite side of your trades given they see your stop, pending orders, etc. and have all your account history.

a good broker will just make money on the spread at the time you place the order. I have no idea what Oanda does though...
One way to counter that is not to put in a stop-loss or pending limit orders but monitor the market closely. Stop-loss orders are market order anyway so as soon as you see the price hit your stop-loss level or your pending order price, pull the trigger and take out the trade. That way, you are protected somewhat from their SL-hunting.
Make your losses in demo. Earn your profits live.
  • #31
  • Aug 22, 2010 3:07pm Aug 22, 2010 3:07pm
Quoting Forexia
One way to counter that is not to put in a stop-loss or pending limit orders but monitor the market closely. Stop-loss orders are market order anyway so as soon as you see the price hit your stop-loss level or your pending order price, pull the trigger and take out the trade. That way, you are protected somewhat from their SL-hunting.
With all the millions of transactions, and massive trade data that go thru the Brokers, don't you think "they" have enough statistical data to know where the danger zones are for their clients?

How do you think traders live everyday with 10 pips or less hard stops. What do they know that most don't?
  • #32
  • Edited 6:51pm Aug 22, 2010 3:31pm | Edited 6:51pm
Quoting Slack
With all the millions of transactions, and massive trade data that go thru the Brokers, don't you think "they" have enough statistical data to know where the danger zones are for their clients?

How do you think traders live everyday with 10 pips or less hard stops. What do they know that most don't?
Oh wow! That's brutal! I guess they really make money then
Make your losses in demo. Earn your profits live.
  • #33
  • Dec 26, 2010 2:00pm Dec 26, 2010 2:00pm
good traders don't like market makers , they like ECN or STP brokers .
  • #34
  • Nov 23, 2018 8:15am Nov 23, 2018 8:15am
Quoting shutopia
Oanda's Site states the following: (quoted on 10/25/2007) {quote}I would like to hear everyone's take on Oanda's statement. Taking into consideration that OANDA is a market-maker broker, is it still possible for OANDA to profit when we consistently make money? Has anyone ever been turned away from OANDA for making too much money? Your comments are very much appreciated.
I have a live account with Oanda Representative, they actually do make money whether you loose or win. Despite this, I still believe they are among st the list of genuine brokers.
  • #35
  • Nov 25, 2018 1:37am Nov 25, 2018 1:37am
Quoting Prisha
{quote} I have a live account with Oanda Representative, they actually do make money whether you loose or win. Despite this, I still believe they are among st the list of genuine brokers.

Market making services is not a sign of unfair brokers, it's a part of their effort to reduce costs for trading and make it more affordable. Calling the broker a bucketshop based on the knowledge that they run execution venue is a kind of ignorance, because we have to understand that our trade has to eventually find a counterparty and they will do everything to not let you win.
  • #36
  • Last Post: May 18, 2019 10:26am May 18, 2019 10:26am
Quoting Xaron
Yes they make money with the spread. Just look at interbank spreads and Oanda's spreads. Take the difference and multiply it with about 300 million transactions so far. Regards - Xaron
1 trader viewing now