OANDA, short for Olsen AND Associates, is a well-established American brokerage firm that has been providing services to clients around the globe for over 25 years. With a diverse array of trading instruments available, OANDA caters to the growing interest in forex trading among investors looking to profit from their investments. To assist potential traders in determining if OANDA is a good broker for beginners, we have put together a comprehensive OANDA review for our readers.
Forex trading presents an enticing opportunity for many, with the allure of significant profits and the possibility of quick wealth. However, the journey begins with a crucial decision: choosing a trusted and reliable forex broker that not only opens the door to the markets but also fosters your development from a beginner to a seasoned trader.
A broker that offers an easy-to-navigate platform, clear trading conditions, a wealth of educational resources, and exceptional customer service is essential for newcomers. OANDA stands out as a good broker for forex as per our standards.
In this article, we will delve into a detailed review of OANDA, focusing on their fee structure, advantages and disadvantages, and how they stack up against other brokers in the industry.
OANDA Review – Factors to Consider
When you’re starting forex trading, choosing the right broker is crucial. Consider these key features to keep an eye out for while deciding if OANDA is a good forex broker or not:
- Low Minimum Deposit: As a new trader, you might not want to invest a large sum of money right away. Look for brokers that require a low minimum deposit, as they tend to offer better options for beginners.
- Low Fees: It’s common for beginner Forex traders to face losses or see only small gains. To help manage this, find brokers with low fees for trading and withdrawing money so you can keep more of your earnings.
- Special Accounts for Beginners: If you’re new to trading, you might not have the experience to make big profits. Brokers offering demo and cent accounts can let you trade with lower risks while you learn. Also, consider brokers with options like copy trading or PAMM accounts to help you earn while gaining experience.
- Easy Account Opening: Some brokers may turn down applications from individuals with limited trading experience or a lower income. It’s beneficial to choose brokers that accept everyone and process applications quickly so you can start trading without hassle.
- Easy-to-Use Trading Platform: For those starting forex trading, having a platform that’s easy to navigate is vital. It allows for faster market research and makes trading more pleasant.
- Comprehensive Educational Programs: Educational programs play a key role in attracting users to brokers and helping beginners understand how to trade successfully while improving their skills.
- Dependable Customer Support: Having dependable customer support is crucial for addressing any issues traders might face. Good support builds confidence, whereas ineffective service can make traders hesitant to continue.
OANDA for Beginners – Review
1. OANDA Minimum Deposit
To begin forex trading, you must deposit some money into your account. This initial deposit is known as the minimum deposit. Many brokers keep this amount low to make it easier for newcomers. OANDA is a good forex broker providing a minimum deposit as low as $1, which is quite competitive.
2. OANDA Fees
All brokers have trading fees, but OANDA’s are generally lower than many others. For instance, the cost to trade the EUR/USD pair is usually one pip. If you want even lower trading costs, OANDA offers a commission-plus core pricing model. This involves paying lower spreads but includes a $40 charge for every million USD traded.
OANDA does not charge withdrawal fees for one debit or credit card transaction per month. However, if you withdraw funds using a bank or wire transfer, there is a $20 fee. If you make more than one withdrawal per month using a debit or credit card, each additional withdrawal costs $15.
Additionally, if your OANDA account remains inactive for 12 months, a $10 inactivity fee will be charged.
OANDA Accounts for New Traders
OANDA provides a free demo account for beginners, which lets them practice trading and experiment with strategies without risking real money since any profits or losses are just for learning. However, OANDA doesn’t offer a cent account. Cent accounts are a mix of demo and real accounts, using cents instead of dollars or euros, allowing newcomers to trade with less risk and the chance to earn small profits.
OANDA Investment Programs
OANDA also offers options for both active and passive investing through its FxManager service. These programs give clients a way to earn extra income, even if they are just starting in the financial market. Experienced traders have the opportunity to become managers and earn passive income as well.
Opening an OANDA Account
Establishing an account with a good broker like OANDA follows a procedure similar to that of most brokerage firms. The process involves a few straightforward steps, which include:
- Visit the Oanda.com website and select the “Create Account” option.
- Choosing your country of residence and proceeding.
- Creating a username and password, along with providing your email address.
- Inputting personal information such as your name, date of birth, and phone number.
- Indicating your citizenship.
- Provide your residential address.
- Disclosing your employment status, annual income, and the source of funds for trading activities.
- Respond to questions about your trading experience and complete a brief assessment to evaluate your basic knowledge of Forex trading.
- Submitting proof of identity and residence.
Trading Platforms
OANDA provides three trading platforms: MetaTrader 4, WebTerminal MT4, and MetaTrader 5. MetaTrader 4 is widely regarded as the most user-friendly platform for beginners due to its intuitive design and extensive indicator support. While MetaTrader 5 is also a viable choice, it is more tailored for seasoned traders.
Educational Resources
OANDA, being a good Forex broker, excels in its educational offerings, making it an excellent choice for novice Forex traders. In addition to regular articles that clarify trading terminology and provide tips, OANDA hosts free live webinars that enable beginners to enhance their trading skills.
These webinars allow novice traders to learn market analysis techniques from experienced professionals. Furthermore, there is an online library of recorded webinars available for free viewing.
Customer support
Oanda has useful customer support options. You can contact a representative via email, phone, or their virtual assistant when you need assistance. Sometimes, getting a response may take a few days. For quicker issues, the FAQs section on OANDA’s website covers many common questions and provides answers to help you.
Pros and Cons of OANDA
Advantages
- Comprehensive Platforms: Provides a proprietary trading platform alongside MetaTrader 4 and 5.
- Extensive Educational Resources: Offers a variety of instructional videos for both novice and experienced traders.
- Mobile Trading: Highly rated mobile applications improve trading convenience.
- Regulatory Confidence: Maintains a strong trust rating and is regulated in key financial markets.
Disadvantages
- OANDA does not provide negative balance protection for clients in the U.S., which means that traders may incur debts to the broker if their account balance falls below zero.
- The platform does not offer guaranteed stop-loss orders (GSLO) for clients in the U.S. or U.K.
- U.S. clients are restricted from trading CFDs on individual stocks, ETFs, or industry sectors, with access limited to over 70 currency pairs and the option to trade cryptocurrencies through a partner.
- OANDA imposes a monthly inactivity fee, in addition to charges for deposits and withdrawals, bank wire transfers, and multiple debit card withdrawals within the same month.
Conclusion
In conclusion, OANDA stands out as a good broker for beginner Forex traders due to its low trading costs, outstanding educational resources, and user-friendly trading platforms. However, OANDA, being a good broker, does come with some drawbacks, including the absence of a cent account, an inactivity fee, and slower customer support response times. While it serves as a great starting point for beginners, it’s important to note that it isn’t without its flaws.