Oanda users - Oanda widening spreads

all of you oanda users out there,

How do u deal with thier widening spreads policy specially during news events??
I use Fxsol and I'm really interested in opening an account with Oanda but im worried about widening spreads.
I'm a swing trader but Im afraid that spread widening can turn winners into losers or stop me out before the move even if on other platforms my trade is still valid.

what do u think? ur experienced replies are highly appreciated

The spreads only widen for a minute or two. I deal with it by waiting for them to return to normal before I enter any trades.

Not sure how I understand, if you're a swing trader, the widening of spreads around news time will hurt you? You should be more concerned in making sure your trade direction agrees with the market following news.

Not only they last for just a few minutes, they are also very predictable. If you are a swing trader and you hold your trades for more than one day then I don't think you have to worry about the spread widening around news time. You'll only be stopped if price happens to be very very close to your stop and news come out widening the spread and triggering your stop, which is not going to happen very
often if you are a swing trader.

If you don't do day trading or news trading you have nothing to worry about.

Thank u guys for ur input,
I'm saying this coz it happened to me on a Demo account before..
when spreads widened by about 30 pips very close to my s/l before continuing moving in trend direction.
Thank u guys

In that case, you may wish to simply move your stop further away so you're not "artificially" taken out of your trade. The wide spreads vary on the pairs as well, whereas the EUR may be 10 and the GBP 20 during the most volatile news events.

You just gotta learn the way to play the game, if you know what I mean!?

btw i witness that they widen it during those news events rated high and even medium. im wondering if they do it for news graded "low" by FF ?

also, this widening stop is not much of a problem when you say compare Metatrader 4 brokers, when they artificially LOCK trading, giving bullshit error messages, and oh god teh slippage.

face it, if ur daytrading, retail forex is a bad bad choice (exception of Interactive Brokers which turn out to be so much better than EFX or MBT with their bullshit commissions). u might as well spreadbet.

I have handle this problem with having no stops during news time. You can hedge it with a sub account at Oanda during news time and un hedge it immediately after the news. If you do that early enough before news. that 3 or 4 pips does not make a differece to you profits on a longer term swing trade. Anyway they do not widen it for all news.
Hope that helps

Yeah.. I got stopped out prematurely, when I should not have, a few times when I used a broker that widened spreads massively during the news. So I changed broker. Some brokers widen then upto 25 pips and beyond, that can easily make the difference between price hitting your stop and not doing. Good for the broker, bad for you.

does Oanda will reimburse these loss when our SL hit by spread widening?

FYI: spreads widen for institutional forex as well. CNX, Hotspotfxi, LavaFX

they DO NOT widen like Oanda does. everyone knows its ridiculous.


having said that, i think ur better off with such wide spreads during news. At least in MT4, u will face slippages, platform lock down, or ur orders just sort of hang for a few minutes.

again, if ur small, u got nothing to complain about. its just the very nature of this market.

Well several months back I had posted a video on youtube of hotspotfxi going 50+ pips wide on the EURUSD.

This video is no longer available due to a copyright claim by Knight Capital Group. (Hotspot FXi LLC is a wholly owned subsidiary of Hotspot FX, Inc. Hotspot FX, Inc. is a subsidiary of Knight Capital Group, Inc.)

This is why in the end... oanda is the greatest !!! At least they are honest with you and you can see right there on the screen what the spread is... as long as you are aware, this really should be no problem !!!

I have never had any problem with my orders being placed exactly when and where I want... no freez ups... no hanging in the air just to find out you are suddenly losing when if your order had been placed correctly, you would be winning...

Has anyone tried playing the differences in the 'real' market vs Oanda's price quotes just prior to when they begin on Sunday?

What I am getting at is, that the market is moving 24/7 even if Oanda (or most other brokers) doesn't show it until they open the trading desk and a price prints.

So there is a gap sometimes between the 'real' price and the O price. When this gap is wider than their week end spread, and you place an order, which is I believe, permitted any time, then 'theoretically' you should make some pips despite the extra wide spread.

I looked at this carefully today after thinking about it since last week. Unless someone else has tried this and failed, I think I will put a toe in the water next week if a perceived opportunity presents itself.

Lou

I use Oanda and I have found that the spreads will widen for only a matter of seconds and vary rarely will it last for a minute or more.

This is not so much of a problem for me as I don't use stops for exits, just emergency measure that genrally never get hit. So I genrally close the position or wait out the increased spread (unless it is really pumping).

If you do use stops for exits, just be aware of your stop size as you will have to widen it just before news if you don't want to get taken out at the exact place you had predicted would serve as S/R (hence your stop placement just below this level).

This should not be a problem if you are trading the higher time frames as your stop will probably be quite large and so increasing it by 5 or 10 pips probably won't be too significant risk increase (better yet - factor in the widened spread when you calculate your position size as you know that if the trade works out you will be holding for a few days or more, in which time there will be anouncements) . If you can't be at your computer when the news anuncement hits, I would suggest leaving your stop wider for the periods that you can't manage the trade (unless there are no announcements over that period).

If you are trading lower time frames however, your stops will inevitably be smaller and the increase in stop size may substantially increase your risk. In this case, you may have to decide to close the position before the anouncment or close enough of the position so that the increased stop will equal the same loss as the originally intended loss. But make no mistake, you will have to widen your stop. The spread will get you. Even if the announcement is in your favour, price generally whips up and down at least a few pips before taking direction. If your stop is anywhere near price just prior to news, chances are you will be taken out not matter what the result. Just be aware of the anouncement times and factor this in when deciding wether or not to take a trade.

IMO Oanda more than makes up for the widening spread with the extremely tight spreads in normal market conditions - EUR/USD = 0.9, USD/JPY = 1.6-1.8, EUR/JPY = 2-2.5 etc

Hope this helps

Oanda advertize a spread of 0.9 on USD how can they widen to ten pips without being accused of false advertising ?!!!

Is there any law that prevents this in the US ?

I have sold a position which would have been profitable if there wasn't this wide spread so I lost money instead !

Another wannabe

from the Oanda site:


"Are the spreads fixed or variable?

The interbank forex market has variable spreads. If you are trading fixed spreads you are in effect paying for an insurance premium—unless you trade only around news events when markets tend to be more volatile—since fixed spreads are typically higher than variable spreads. Is it worth it? That depends on your trading pattern. (But if you choose fixed spreads, be sure to ask the next two questions too.)
OANDA's response:
OANDA has variable spreads. As in the interbank forex market, spreads will widen dynamically during times when liquidity is tight. This widening occurs typically around news announcements or off-market hours. OANDA FXTrade allows you to trade all weekend, but spreads will be significantly wider during weekends when liquidity is almost non-existent."

and

"No less important, spreads must always be considered in conjunction with depth of book. Strangely, when it comes to economies of scale, forex doesn't behave like most other markets. On the interbank market, the larger the ticket size, the larger the spread tends to be. Hence, when you see a 1-pip spread on an ECN platform, you have to ask: is that spread valid for a $2M, $5M or $10M trade? Probably not. In many cases, the tight spread offered applies only to a capped trade sizes that are grossly inadequate for typical trading strategies."

At OANDA, you get the same price and same spread up to 10M units

I guess you didn't see this then from their website:

 

1. During non-standard trading hours such as weekends, spreads are widened to reflect illiquidity in the market.
2. During periods of high volatility such as news events, spreads may be widened temporarily to respond to liquidity issues in the market.

Don't blame them for your loss, you obviously didn't take the time to look at the spread before you placed the trade. Your fault. Man up and take responsibility for your own actions.

I agree with you, having watched the currency futures i know the spread is unpredictable during news, but what Oanda does is ridiculus, it has stopped me trading with them as i had a few trades stop me out to the pip for quite a lot of money.
Traders that know the direction before the news and wish to stay in without widening their stops to a stupid level have no chance.