OANDA is a big-name broker with a strong reputation in the trading community. It doesn’t try to be all things to all people but instead offers a suite of services and additional extras, allowing them to be the best choice broker for a particular type of trader.
Established in 1996 and headquartered in New York, OANDA has set out to provide high-spec trading services from day one that makes the most out of technological advances. Set up in 2014, OANDA Australia Pty Ltd operates out of Level 1, 60 Martin Place, Sydney. NSW 2000 and is regulated by ASIC.
The pioneering approach of the firm has led to it clocking up a series of ‘firsts’. It was the first company to share exchange rate information on the Internet, free of charge; the first to introduce fractional pips’ pipettes’ quoted to the fifth decimal place to provide greater pricing flexibility and tighten spreads; and it was the first to launch Market Pulse which provides traders with in-depth insights into events that could impact the markets.
A passion for introducing innovative services remains part of OANDA’s core philosophy. Groundbreaking ideas are now financed by the leading private equity firm CVC Partners, which bought the firm in 2018. Unsurprisingly the OANDA trading platform has proved popular with traders. So CVC now owns a brokerage platform with a diverse client base and is managing more than $70bn of investor assets worldwide.
The decision to provide clients with institution-grade trading infrastructure has resulted in OANDA picking up a range of industry awards, including being named the world’s Best Retail FX Platform at FXWeek’s prestigious eFX awards and Most Popular Broker and Best Forex and CFD Broker at the TradingView Broker Awards 2021.
Products and Trade Offers
OANDA Australia offers markets in 15 stocks indices, including the Australia 200 (ASX 200), which can be traded using spreads as low as a highly competitive 0.8 points. An impressive 70-plus currency markets are available to trade, ensuring forex traders can access a wide range of major, minor, and exotic currency pairs. As with the indices pricing, the OANDA FX rates are in line with the broker’s peer group.
Other asset classes are also catered for among the range of OANDA CFD markets. There are five metals markets, including platinum and palladium: five soft commodity markets, including wheat and soybeans; and markets in crude and natural gas. Cryptocurrencies can also be traded with four major cryptocurrencies available, including Bitcoin, Bitcoin Cash, Litecoin, Mini Bitcoin, and Ether which are priced against the US dollar. Spreads start from only US$40 and margins from 50% for Bitcoin. OANDA has stated an intention to offer stock CFD trading in the future. That will be a welcome addition and solve the problem of a lack of equity trading options currently being a negative mark against the firm.
Retail traders can choose between two accounts which can be opened using AUD or USD as a base currency. These are called the Core Pricing account and Spread-only Pricing account. Both offer a broadly similar range of markets and services, with the main differences relating to pricing T&Cs.
Traders using the Core Pricing account pay a commission on trades, which have spreads starting at 0.1 pips, whereas traders using the Spread-only account avoid paying commissions but book trades using spreads that start at 0.6 pips. Both versions can be set up in the name of a corporate entity or as a joint account and benefit from Negative Balance Protection, so investors can’t lose more than their original stake.
Investors with sufficient funds and experience can upgrade to a Professional account. While this account highlights how the OANDA spreads and platform cater to institution-grade traders, the barriers to entry are prohibitive. The required criteria include having at least AU$2.5 million in assets or AU$250,000 annual earnings for the last two years or having traded CFDs / forex for more than 12 months and executing at least 150 trades with a notional value of US$10 million.
The free-to-use OANDA demo account allows novice traders to practise trading and experienced traders to test new strategies in a risk-free environment. It uses virtual funds and live market prices, offering a hands-on, real-time simulation of what to expect when trading using the broker. Setting up a demo account takes moments, and trying out the service is a natural accompaniment to this OANDA review.
- Long-track record and well regulated
- Impressive research and analysis tools
- Innovative approach and unique features
- Strong in forex and stock index markets, including Australia 200 (ASX 200)
- Excellent mobile trading app
- Limited range of asset types
- Some fees and charges are above the market average
Commissions and Fee Charges
OANDA Australia’s trading terms and conditions are laid out clearly and transparently, a sign that the broker is confident about its position in the market. The broker is far from a budget operation, so some spreads are not as competitive as those at low-cost platforms. However, OANDA Australia’s forex traders can feel confident because spreads on the Core-pricing account start from 0.1 pips for major currency pairs.
Depending on your deposit method, the sending bank may charge you a fee for depositing and withdrawing funds into your OANDA Australia trading account. Banks and credit card operators might apply a charge for deposits and withdrawals, so checking the small print can help you avoid incurring fees that could otherwise be avoided.
Funds deposited using credit cards can be withdrawn free of charge once during each calendar month, and all OANDA Australia applied fees and company bank fees with a valid receipt are waived for premium clients.
An inactivity fee is levied on your account if there has been no trading activity for 12 months. The maximum charge is AU$10 per month, and rebates can be claimed if you restart trading. This fee does not apply to account holders with open positions.
One fee you need to look out for is the currency conversion fee. When you trade an instrument in a currency different from the denomination of your base account, any realised profit or loss, fees, or commissions with a different quote currency to your account currency will incur a conversion charge. It specifically relates to traders with AUD-denominated accounts that trade international markets such as EURJPY or US stock indices. This currency conversion charge is calculated using the prevailing mid-price of the applicable FX spot rate for the conversion plus an additional spread of 0.5%.
In line with the terms and conditions stipulated by ASIC, the maximum OANDA Australia leverage rate for retail clients is 1:30. On some higher volatility instruments, such as cryptocurrencies, the margin rate is capped at 1:2. Professional traders can expand leverage terms up to 1:100.
What Others Say
The Oanda broker review by Forex Fraud highlights how bigger can sometimes be better.
“Industry sources estimate that the OANDA servers process over one million transactions a day and account for nearly 20% of all industry traffic, quite an accomplishment over the past fifteen years… This means that execution speeds are very quick, with 98% of all transactions completed in less than 0.057 seconds – which has a lot of added benefits in terms of pricing accuracy.”
While the OANDA review by AskTraders reminds readers that the broker has consistently managed to upgrade its services to ensure it provides the best possible trading experience.
“The broker offers a long list of tools to help traders analyse and make decisions. Tools include Advanced Charts Powered by TradingView with more than 65 technical indicators, Algo Lab, Technical Analysis Powered by Autochartist, economic overlay, MotiveWave professional charting analysis, and Dow Jones FX Select for breaking news and analysis.”
Forex Traders, in their OANDA review, highlight how the user-friendly functionality of the site is backed up by an extensive range of additional extras to help clients take their trading to the next level.
You can conduct backtesting, develop your own algorithms, and test your ideas using quant model forecasting tools. If you are ‘just’ looking for a reliable trading-focused platform and up-to-date news and research from a trusted broker, then OANDA also ticks that box.”
Clients can contact the multilingual OANDA Australia’s help desk via Live Chat, telephone, and email. We found the staff to be professional and informed during our testing, and our queries were swiftly resolved. Brokers benefit from cost-savings by encouraging clients to use FAQs, and those presented by OANDA Australia were satisfactory, but the virtual OANDA Australia Assistant had a distinctly ‘clunky’ feel. That is not a problem unique to OANDA Australia. Many brokers are in a position where they would benefit from upgrading that part of their service, which can, at times, be circuitous and frustrating.
Platform Features and Tools
OANDA Australia provides you with a choice of three top-of-the-range trading platforms, with each one catering to different styles of trading. The in-house developed OANDA Trade platform has gained the “World’s Best Retail FX Platform” title at the e-FX Awards. The ever-popular MetaTrader MT4 platform remains the ‘go-to’ option for many, and the tie-up OANDA has with TradingView allows you to join the largest investment community on the web. That platform has over 15.5m active investors, 6m trading ideas and more than 34m user-created charts.
OANDA Trade is a web-based platform with an easy-to-use feel. The convenience of access is backed up by exceptional execution and advanced charting and trade analysis tools. The firm has invested heavily in building a platform that allows traders to have all the additional extras needed to identify opportunities; however, the features do not get in the way when going through the process of booking a trade. That is achieved by allowing you to customise your trading dashboard in the same way as institutional investors. Monitors can be dragged and dropped and set up onto multiple screens resulting in you having a personalised dealing desk.
The crisp aesthetics and extensive range of trade indicators on offer make MetaTrader’s MT4 platform the natural home for you if you want to trade the markets using chart analysis. MT4 has been a market leader for almost two decades thanks to its intuitive interface and clinical trade execution. It’s also an ideal option for those who want to automate their strategies. That process is more straightforward than it sounds, thanks to the ‘wizards’ that MetaTrader offers, providing a step-by-step guide on starting trading using your own algorithms.
TradingView’s incredible following of 15+ million traders can be attributed to how the platform’s powerful software scours the markets, presenting the trading opportunities it finds in a simple manner. Technical analysis indicators can sometimes give opposing readings in terms of which way the price of an asset might head. Still, the indicator summary tool at TradingView aggregates those signals to give a simple total figure for buy or sell strength.
The OANDA Trade mobile app can be downloaded for free on iOS and Android devices. It allows you to keep in touch with the markets, carry out account management, or trade when on the go. Credit has to go to OANDA for managing to transfer the impressive array of tools found on the desktop version onto a smaller screen and still make it user-friendly. All of the instruments available at OANDA can be traded using hand-held devices, but the really neat feature of the OANDA Trade app is how it lets you personalise your set-up. You can create a personal set of default parameters, including units traded, risk management styles, and profitability levels for pending orders.
Those looking to take a more hands-off approach to trading and to use the ideas of others can take advantage of the market-leading Expert Advisors feature that accompanies the MetaTrader MT4 platform. It allows you to apply the trading decisions of others to your account, and the relationship can be discontinued at any time, at your discretion.
Expert Advisors is a popular tool within the trading community, with thousands of different traders available to copy. Some charge a fee for the service, but some are offered for free, though the inherent risks of handing trading decisions to a third party always apply.
Research and Learning Section
OANDA’s research and educational services are broken down into well-thought-out categories. Each one addresses the issues facing a first-time investor but also has materials catering to intermediate and advanced traders.
The three sections that form the learning resources’ foundation focus on fundamental analysis, technical analysis, and indicators and oscillators. There is an in-depth analysis of leverage and how it works, and the webinars and online training events allow you to follow the thought processes of an experienced trader making real-time decisions in live markets. Many techniques used to buy low and sell high can be applied to any asset type, but OANDA ensures their live coverage encompasses a range of instruments, including forex and crypto.
OANDA’s overall offering in this area is in line with brokers of its size. It caters to a wide range of trading styles and helps develop a better understanding of aspects of trading that are sometimes difficult to understand. It is good enough but could not be considered groundbreaking regarding the total content or how it is delivered.
OANDA Australia Pty Ltd is regulated by the Australian Securities and Investments Commission ASIC (ABN 26 152 088 349, AFSL No. 412981. The broker is bound by the Australian Privacy Principles in the Commonwealth Privacy Act 1988.
Australian citizens who fall under the regulatory protection of ASIC can take comfort from that organisation being considered a Tier-1 authority. The licenses that other entities in the OANDA group of companies operate under are also with some highly regarded regulators and offer additional comfort.
Regulated, extensive broker offering education tools
OANDA has a long track record of being the first broker to introduce innovative ideas which give its clients a competitive edge. That, tied in with the enormous flow of trades it processes daily, ensures it provides excellent trading conditions. It’s a high-quality service, and OANDA will likely make it onto your broker shortlist if you’re not looking to trade obscure markets. The current absence of equity markets does discount it as an option for stock traders. But if you’re looking to trade indices, forex, commodities, bonds, and crypto, then you can do so with some confidence if you opt to use OANDA.