Oanda Broker Review: Why Nobody Will Ever Promote Certain Brokers
With the media interest in online Forex brokers skyrocketing in recent years and the subsequent proliferation of Forex related websites, one would think that all of the best brokers would have been given abundant reviews, featured and linked to by dozens and dozens of websites and so on, all for the best interest of an FX trader. However, this statement does not exactly hold true.
Introducing Brokers (IB) in the Forex World
Many online brokers offer an affiliate program, awarding their affiliates with either a flat rate per client subscription or a percentage on the broker's earnings. Of course, since most online brokers gain profit exclusively from their spreads, this means (at least to some extent) that spreads featured by such brokers tend to be higher than they could actually be. This does not pose a big problem in terms of competition, since the vast majority of brokers adopt this mechanism to drive traders to their sites anyway.
But what if some chose to do everything in their power to try and reduce the spreads, thus giving their traders favorable market conditions? They probably would have to renounce resorting to affiliate programs altogether and reach all their customers by themselves.
Oanda Forex Broker Review
Oanda is one of such companies, maybe the best known of all among these. Comparing their conditions with a typical Forex broker, we honestly think that their trading conditions are extremely competitive and much better than a standard online broker offers, including:
- trading any fraction of a lot (even just 1 unit);
- ability to set stop and limit orders with absolute precision;
- spreads that are variable (which brings an inherent additional risk to the table), but typically lower than a normal broker;
- second-by-second interest, etc.;
- Oanda has some great trading tools: events calendar, conversion tools, and so on;
- even though they offer MetaTrader 4 platform, their original trading platform is more newbie-friendly and will work well for you if you do not use any unique feature of MT4.
The first three point are of great value for every Forex trader. But then, why is Oanda not reviewed and featured all across the Web? Of course, a great part of the answer lies in the fact that, as we already explained, they save on spreads by choosing not to have an IB program, so websites are rarely interested in featuring them.
Let us clear something up: we are not saying that Oanda is the absolute best broker you will ever find because that is not probably true. However, we definitely feel that it is getting less reviews and much less exposure than it actually deserves. To offer a more objective look at Oanda, we will also list some of the disadvantages:
- Oanda is a market maker, which means that it acts as a counter-party in at least some of the trades it executes on behalf of its clients. Some traders believe that this sort of conflict of interest is vicious. An alternative would be to trade with an ECN broker.
- Some traders report that Oanda's trading platform freezes often.
- Their proprietary platform is OK, but can be quite slow at times.
Are brokers like Oanda destined to fade into obscurity? We honestly hope not.
Update: In recent times, Oanda has launched an IB affiliate program, but it is only available in some jurisdictions and is restricted in the United States. So apparently, the broker is still able to offer reduced spreads, at least to the traders based in the USA.