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OANDA users...how do you profit when spreads change

  • #1
  • First Post: Jul 26, 2006 10:12am Jul 26, 2006 10:12am
Yesterday, i didn't realize the thing about the spreads changing until someone mentioned it. Since I've only been on the demo for a day, I simpley didn't notice it. That got me a little nervous so i wanted to know from OANDA users how you are able to make consistent profits when the spreads can change even while you are in a trade? Like, once you're in a trade and you're making a profit, have you ever noticed the spread changing suddenly and thereby erasing any profit you may have made?

I still plan to pursue it - mostly due to all the good reviews. But i'm just worried about the spreads changing without warning.
  • #2
  • Jul 26, 2006 10:15am Jul 26, 2006 10:15am
Quoting awcmon
Yesterday, i didn't realize the thing about the spreads changing until someone mentioned it. Since I've only been on the demo for a day, I simpley didn't notice it. That got me a little nervous so i wanted to know from OANDA users how you are able to make consistent profits when the spreads can change even while you are in a trade? Like, once you're in a trade and you're making a profit, have you ever noticed the spread changing suddenly and thereby erasing any profit you may have made?

I still plan to pursue it - mostly due to all the good reviews. But i'm just worried about the spreads changing without warning.
Oanda is known for widening their spreads around news releases. This is to dicourage those traders scalping the market when news are released.

Cobra
Never Ever Give Up!
  • #3
  • Jul 26, 2006 10:26am Jul 26, 2006 10:26am
No ....it has nothing to do with trying to discourage traders..... it is a reflection of the banks prices at the time of the volitility
Same Whore .... Different Dress
  • #4
  • Jul 26, 2006 10:38am Jul 26, 2006 10:38am
Quoting johnedoe
No ....it has nothing to do with trying to discourage traders..... it is a reflection of the banks prices at the time of the volitility
So why do they widen the spreads just around news times?
I have read this elswhere on the web. One of their traders emailed them about it , and he published it on his website.

Cobra
Never Ever Give Up!
  • #5
  • Jul 26, 2006 10:51am Jul 26, 2006 10:51am
In a word VOLITILITY.
Same Whore .... Different Dress
  • #6
  • Jul 26, 2006 11:14am Jul 26, 2006 11:14am
Quoting awcmon
Yesterday, i didn't realize the thing about the spreads changing until someone mentioned it. Since I've only been on the demo for a day, I simpley didn't notice it. That got me a little nervous so i wanted to know from OANDA users how you are able to make consistent profits when the spreads can change even while you are in a trade?
You donīt have to be nervous. I donīt know if you post this on Oandaīs forum but I know the answer would be the same: there is no problem. Oandaīs spread in EUR/USD right now is 1.5 pips on news times goes to 3 maybe 4 and is still a low spread. A lot of plattforms spread 3 pips on EUR/USD on normal times.

Like, once you're in a trade and you're making a profit, have you ever noticed the spread changing suddenly and thereby erasing any profit you may have made?

I still plan to pursue it - mostly due to all the good reviews. But i'm just worried about the spreads changing without warning.
Itīs not without warning. Everybody knows is during big news (or unexpected news) so have a economic calendar near you and you will see how it works
Johann Channels and cycles are everything
  • #7
  • Jul 26, 2006 12:27pm Jul 26, 2006 12:27pm
Let us not miss the point here.

Oanda is known for doing that. It has got nothing to do with volatility around news events. If it was the feed from the interbank, then why don't other brokers do the same. Surely other brokers get the same feed from the interbank.No broker will keep his spread the same when his feed from the interbank suggest otherwise.
Never Ever Give Up!
  • #8
  • Jul 26, 2006 12:52pm Jul 26, 2006 12:52pm
Quoting awcmon
I still plan to pursue it - mostly due to all the good reviews. But i'm just worried about the spreads changing without warning.
I use Oanda. If you are nervous about the spread, trade just the EUR/USD pair, they don't widen the spread more than 4.5 pips from what I have seen. It is a shame because about 40% of the possible profit is immediatly gone if you only trade US news. Take it or leave it I suppose.

Use Oanda as a launchpad. Make some profits, then start looking for a better fit. I currently have narrowed my new broker search to ODL Securities, HotSpot, MB Trading, Currenex, Interactive Brokers. I have heard that they might help me in my news trading ventures .

* Oanda typically will widen the spreads before the news is released, not during the actual trading. Yesterday they hiked the spread on AUD/USD to 15 from 2 @ 9:29:50, the news was released at 9:30:15. Generally will have 15-20 seconds or so to determine whether you want to take the risk or not.
The market is my nation. Traders, my family. Hello, brothers and sisters!
  • #9
  • Jul 26, 2006 1:50pm Jul 26, 2006 1:50pm
Surely other brokers get the same feed from the interbank.No broker will keep his spread the same when his feed from the interbank suggest otherwise.
This is what Oanda is doing there spreads corrispond to the banks and there fluctuations during volitility, ECNs do the same thing........brokers with fixed? spreads.....well they just gouge you all the time and when there is volitility they either halt trading or the slippage is horendous....take your pick!
Same Whore .... Different Dress
  • #10
  • Jul 26, 2006 2:07pm Jul 26, 2006 2:07pm
Quoting Cobra
So why do they widen the spreads just around news times?
I have read this elswhere on the web. One of their traders emailed them about it , and he published it on his website.

Cobra

johnedoe is right on the money


btw I trade with Onada, and it has to be one of the best forex market makers out there. But I still cant wait for CMEmarketplace
  • #11
  • Jul 26, 2006 2:20pm Jul 26, 2006 2:20pm
Quoting Cobra
Let us not miss the point here.

Oanda is known for doing that. It has got nothing to do with volatility around news events. If it was the feed from the interbank, then why don't other brokers do the same. Surely other brokers get the same feed from the interbank.No broker will keep his spread the same when his feed from the interbank suggest otherwise.
With other brokers, they will cancel, reqoutes after reqoutes, freeze the price, delay your order when the prices moves against them. When it is in their favour, you will get your trade filled. Run your platform along side an ECN platform, Ouanda's platform and other retail platform and you will learn for yourself and not what other says.
Why do you think servers suddenly goes down and the reason why retailers puts clients on manual? To DELAY in order to protect their their "fixed spread advertisement" The REAL market does not have fixed spread.
Highway
  • #12
  • Jul 26, 2006 2:53pm Jul 26, 2006 2:53pm
Just look what the rules are at the specific broker. Each have its it own strong and weak points. If you want to trade news rather not use OANDA, they say so themselves -

"Fixed or variable? The choice depends on your trading pattern. If you trade only or primarily on news announcements--when markets tend to be volatile--you may well be better off with fixed spreads. But only if quality of execution is good." - http://fxtrade.oanda.com/spreads/index.shtml .
  • #13
  • Jul 26, 2006 3:16pm Jul 26, 2006 3:16pm
Check your news release calendar daily and beware of the release times and you'll be safe from spread widenings 99% of the time. The remaining 1% is for those unexpected things that hit the market without advance warning.

If you're in an open trade you only pay wider spread on the close portion. If eur/usd spread rises from 1.5 to 3.5 pips, you've paid 0.75 pips spread when opening the trade, and will pay 1.75 pips when closing the trade for a total of 2.5 pips. It's worse than 1.5 but better than 3.5.

When I trade the news I pay the open half wide spread without a blink because then I'm in the market. Most of the times the spread goes back down before I close.

Remember there is no fixed spread on the real market, just asks and bids. The spread between them can be anything. And at news times when the news gaps the market your real spread on the market can usually be anything from 20 to 100 pips. Compared to this hard reality, Oanda's policy is pretty generous.
  • #14
  • Jul 26, 2006 3:34pm Jul 26, 2006 3:34pm
Why would you use a broker that changes the spread like that? i use FXsol and they never widen the spread before a big news or data release. try the fxsol demo. its the best platform out there and you always get filled immmediately.
"i wake up in the morning, and i piss excellence"
  • #15
  • Jul 26, 2006 3:51pm Jul 26, 2006 3:51pm
Quoting trader69
Why would you use a broker that changes the spread like that? i use FXsol and they never widen the spread before a big news or data release. try the fxsol demo. its the best platform out there and you always get filled immmediately.
It all depends on your system/timeframe. I use OANDA for my medium/longer term systems because I have full control about the number of units I want to trade with. With the stops I use for this systems 10 pips spread is not even close to playing a role. I also use them because they pay interest on your funds even when you are not in a trade. Furthermore I just like them.

FXSol is nice because you can hedge with them. I find it difficult (impossible) to change limit orders with them so I do not use them for system where limit orders change a lot. You can use a credit card to add funds when needed so no need to keep a lot of money with them. All part of money management.

Furthermore I have an FXCM account as well and the system I trade with them make use of their strengths.

Using different brokers is part of my risk profile, each have their place in the bigger plan.

Point I'm trying to make is that the broker you use is an integral part of your trading plan, look at the differences between them and use it to your advantage.
  • #16
  • Jul 27, 2006 3:09am Jul 27, 2006 3:09am
Quoting trader69
Why would you use a broker that changes the spread like that? i use FXsol and they never widen the spread before a big news or data release. try the fxsol demo. its the best platform out there and you always get filled immmediately.
Since this is your first post ever, it sounds like a shill for FXsol.

There are plenty of reasons to go with Oanda. From my perspective, they are a thousand times more reliable (in terms of execution), and a lot more flexible than FXsol.
  • #17
  • Jul 27, 2006 3:24am Jul 27, 2006 3:24am
Quoting trader69
Why would you use a broker that changes the spread like that? i use FXsol and they never widen the spread before a big news or data release. try the fxsol demo. its the best platform out there and you always get filled immmediately.
Read FXSol's 'fast market policy'.

I'd rather be in the market than get slippage, delay or both.
  • #18
  • Jul 27, 2006 7:39am Jul 27, 2006 7:39am
How do we make a profit on Oanda? Just like this! (See attachment.)

Oanda has always been good for me using the idea of straddling a channel right before a news release. It's especially nice because I don't have to spend all day watching graphs and trying to get my work done. Just 5 minutes in the morning.

It's worth noting that I only do this when it's an orange or red news release on the FF calendar. Also, I'm never really risking that much. The only risk is the difference between your limit buy price and limit sell price, usually no more than 8-15 pips.
Attached Image
  • #19
  • Jul 27, 2006 8:28am Jul 27, 2006 8:28am
Quoting girdle66
How do we make a profit on Oanda? Just like this! (See attachment.)

Oanda has always been good for me using the idea of straddling a channel right before a news release. It's especially nice because I don't have to spend all day watching graphs and trying to get my work done. Just 5 minutes in the morning.

It's worth noting that I only do this when it's an orange or red news release on the FF calendar. Also, I'm never really risking that much. The only risk is the difference between your limit buy price and limit sell price, usually no more than 8-15 pips.
Have you ever got whipsaw in OANDA?
  • #20
  • Jul 27, 2006 8:44am Jul 27, 2006 8:44am
Quoting awcmon
...so i wanted to know from OANDA users how you are able to make consistent profits when the spreads can change even while you are in a trade? Like, once you're in a trade and you're making a profit, have you ever noticed the spread changing suddenly and thereby erasing any profit you may have made?
Spreads will always change, but they've never erased my profits because none of my strategies employ a model where spread changes are a concern. My strategies dictate that I don't enter or exit trades before a news event, after 1PM on Friday's, or any time on the weekend.
Quoting awcmon
...i'm just worried about the spreads changing without warning.
There are plenty of ways to make money without needing to worry about spreads changing. All brokers change spreads...what you don't want to do is enter on the weekends or in conditions where spreads have risen significantly.
Mr. Trend
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