Oanda Vs FXCM

Category: Broker Guides | Author: Trading Brokers | Date: June 29, 2023

In the vast and exciting realm of foreign exchange trading, choosing the right forex broker can make all the difference in your trading journey. With a multitude of options available, it’s essential to find a reliable and trustworthy platform that aligns with your trading goals and preferences. Two well-known contenders in the forex brokerage industry are Oanda and FXCM. In this article, we’ll dive into a head-to-head comparison of these brokers, examining their features, services, and overall performance. Whether you’re a seasoned trader or just starting out, join us as we explore the strengths and weaknesses of Oanda and FXCM to help you make an informed decision for your trading endeavors.

Overview of Oanda

Oanda

Oanda

Oanda is a reputable online forex broker that has established itself as a prominent player in the financial markets. Founded in 1996, Oanda has amassed over two decades of experience in providing trading services to individuals and institutions worldwide. The company offers a wide range of currency pairs, including major, minor, and exotic pairs, along with trading opportunities in commodities, indices, and precious metals. With user-friendly platforms, advanced technology, competitive pricing, and tight spreads, Oanda caters to both novice and experienced traders. The broker operates under the oversight of regulatory bodies such as the FCA, ASIC, and MAS, ensuring compliance and client protection. Additionally, Oanda is committed to customer support and education, providing various channels for assistance and offering educational resources to empower traders with knowledge and insights.

Pros of Oanda

  • Established and reputable forex broker with over two decades of experience.
  • Wide range of currency pairs and trading opportunities in other asset classes.
  • User-friendly platforms with advanced technology and comprehensive tools.
  • Competitive pricing, tight spreads, and flexible leverage options.
  • Regulatory compliance and client protection under multiple regulatory bodies.
  • Strong commitment to customer support and educational resources.

Cons of Oanda

  • Limited selection of account types compared to some other brokers.
  • Research and analysis tools may be more basic compared to specialized platforms.
  • Limited range of trading instruments and markets compared to some competitors.
  • May not offer some advanced trading features or options preferred by professional traders.
  • Inactivity fees charged for accounts with no trading activity over a certain period.
Oanda Logo

Oanda is a multi-regulated and established online broker offering an excellent range of financial instruments via powerful and user-friendly trading platforms with industry leading trading conditions and a superb selection of premium trading tools for comprehensive market analysis.

Leveraged trading in foreign currency contracts or other off-exchange products on margin carries a high level of risk and may not be suitable for everyone.

Overview of FXCM

FXCM

FXCM

FXCM (Forex Capital Markets) is a renowned online forex broker that has established a strong presence in the financial industry since its inception in 1999. With a global reach, FXCM offers a wide range of currency pairs, including major, minor, and exotic pairs, as well as trading opportunities in commodities, indices, and cryptocurrencies. The broker stands out with its robust trading platforms like MetaTrader 4 (MT4) and Trading Station, providing advanced charting tools and customizable indicators for traders of all levels. FXCM prioritizes competitive pricing, low trading costs, and transparent execution, while adhering to regulatory standards set by respected authorities such as the FCA and ASIC. Additionally, FXCM excels in customer support, offering various channels of assistance and providing educational resources to equip traders with market insights and knowledge to enhance their trading skills.

Pros of FXCM

  • Established and reputable forex broker with a strong presence in the industry.
  • Wide range of currency pairs and trading opportunities in commodities, indices, and cryptocurrencies.
  • Robust trading platforms with advanced charting tools and customization options.
  • Competitive pricing, low trading costs, and transparent execution.
  • Regulatory compliance and client fund protection under respected authorities.
  • Strong emphasis on customer support and educational resources.

Cons of FXCM

  • Limited selection of account types compared to some other brokers.
  • Research and analysis tools may not be as extensive as specialized platforms.
  • Limited range of trading instruments and markets compared to some competitors.
  • Certain advanced trading features or options may not be available.
  • Inactivity fees charged for accounts with no trading activity over a certain period.
FXCM Logo

FXCM is an established and well-regulated online broker with an excellent range of powerful trading platforms that are loaded with tools and market insights to help you discover trades and make informed decisions.

Between 74-89% of retail investor accounts lose money when trading CFDs with this provider.

Comparing Oanda and FXCM: Choosing the Right Online Trading Platform

To determine which platform is more suitable for you, let’s compare Oanda and FXCM across various factors:

Regulation

When it comes to regulation, both Oanda and FXCM prioritize compliance and operate under the oversight of reputable authorities. Oanda holds six global Tier-1 licenses, including authorization from the CFTC (Commodity Futures Trading Commission), FCA (Financial Conduct Authority), NFA (National Futures Association), ASIC (Australian Securities and Investments Commission), IIROC (Investment Industry Regulatory Organization of Canada), JFSA (Japan Financial Services Agency), and MAS (Monetary Authority of Singapore). FXCM, on the other hand, holds three licenses, being authorized by the FCA, ASIC, and FSCA (Financial Sector Conduct Authority) in South Africa. These regulatory bodies enforce strict guidelines to ensure fair trading practices and client fund protection.

Trading platforms

Oanda and FXCM offer their own proprietary trading platforms, as well as support for the widely used MetaTrader 4 (MT4) platform. Oanda’s fxTrade platform is available in desktop, web, and mobile versions, providing a user-friendly interface and comprehensive trading tools. FXCM’s Trading Station platform is also accessible across multiple devices and offers advanced features such as technical indicators, charting capabilities, algorithmic trading functionality, and integrated news feeds. Traders can choose between the two platforms based on their preferences and trading strategies.

Pricing and fees

The pricing structure of Oanda and FXCM differs slightly. Oanda generally offers lower spreads compared to FXCM, particularly for major currency pairs. For instance, the average spread for EUR/USD at Oanda is around 0.9 pips, while at FXCM, it is approximately 1.3 pips. However, FXCM caters to high-volume traders with its Active Trader account, which provides reduced spreads and commissions. It is worth noting that Oanda does not have different account types or tiers, and all traders are subject to the same pricing structure.

Broker type

Oanda operates as a market maker broker, meaning it acts as the counterparty to its clients’ trades. This setup may involve a potential conflict of interest, as the broker’s profitability can be influenced by clients’ losses. On the other hand, FXCM operates primarily as a no dealing desk (NDD) broker, routing clients’ orders to liquidity providers and avoiding direct involvement in the trades. However, FXCM also offers a dealing desk (DD) option for certain products, giving the broker more control over pricing and execution.

Leverage

Both Oanda and FXCM offer leverage options for traders to amplify their positions. In most regions, including Europe, Australia, and Asia, both brokers provide leverage up to 1:30 for forex trading. However, in the United States, the maximum leverage offered by both brokers is limited to 1:50 due to regulatory restrictions. Notably, Oanda goes beyond these limits and offers higher leverage options, such as 1:100 for certain exotic currency pairs and even up to 1:400 for selected CFDs, providing more flexibility for experienced traders.

Asset selection

While both brokers offer a diverse range of trading instruments, FXCM has a broader selection compared to Oanda in terms of the number of tradeable symbols. FXCM provides access to 440 symbols, including 41 forex pairs and 399 CFDs on indices, commodities, metals, cryptocurrencies, and shares. On the other hand, Oanda offers 124 symbols, encompassing 71 forex pairs and 53 CFDs on indices, commodities, metals, and bonds. Traders seeking a wider variety of instruments may find FXCM more suitable for their needs.

Social Trading

Oanda and FXCM both offer social trading features, allowing traders to benefit from the wisdom of the crowd and follow successful strategies. Oanda has partnered with TradingView, a popular social network for traders, enabling users to share ideas, strategies, and signals. Oanda clients can directly copy trades from other TradingView users within the fxTrade platform. FXCM, on the other hand, has partnered with ZuluTrade, a leading social trading platform that grants access to thousands of signal providers. Through the integration of ZuluTrade into the Trading Station platform, FXCM clients can easily follow and copy trades from these signal providers.

Minimum Deposit

Oanda offers an exceptionally low minimum deposit requirement, starting at just $1 across all account types. This affordability makes it highly accessible to beginners and traders with limited initial capital. Conversely, FXCM has a higher minimum deposit requirement, with the Standard account requiring a minimum deposit of £300 (or equivalent), while the Active Trader account necessitates a minimum deposit of £25,000. Traders with a smaller budget or those who prefer to test the broker’s services before committing more funds may find Oanda’s lower minimum deposit more appealing.

Withdrawal and Deposit Methods

Both Oanda and FXCM provide a range of options for depositing and withdrawing funds from trading accounts. Oanda supports various methods, including bank wire transfers, credit/debit cards, PayPal, and electronic wallets such as Skrill and Neteller. FXCM offers similar options, including bank wire transfers, credit/debit cards, and electronic wallets like Skrill and Neteller. However, it is important to note that FXCM does not support PayPal as a payment method. Both brokers typically do not charge fees for deposits or withdrawals, except for certain instances such as withdrawal fees charged by Interactive Brokers.

Choosing the Best Trading Platform: Oanda or FXCM?

When it comes to choosing between Oanda and FXCM as trading platforms, the decision ultimately depends on your individual preferences and trading style. If you prioritize lower spreads and a user-friendly platform with advanced features, Oanda’s fxTrade platform may be the best fit for you. Additionally, if you prefer a market maker broker and have a limited budget, Oanda’s low minimum deposit requirement of $1 makes it highly accessible. On the other hand, if you value a wide range of trading instruments, including cryptocurrencies and social trading capabilities, FXCM’s Trading Station platform with its partnership with ZuluTrade may be more suitable. Furthermore, if you prefer the no dealing desk (NDD) model and are a high-volume trader looking for reduced spreads and commissions, FXCM’s Active Trader account is worth considering. Consider your trading goals, desired features, and budget constraints to determine which platform aligns best with your specific needs, as both Oanda and FXCM offer unique advantages tailored to different types of traders.

Conclusion

In conclusion, choosing between Oanda and FXCM as trading platforms depends on your preferences and trading style. If you value lower spreads, user-friendly interfaces, and a market maker broker, Oanda may be the best choice. However, if you seek a wide range of trading instruments, social trading options, and a no dealing desk (NDD) model, FXCM could be more suitable. Consider your specific needs and goals to determine which platform aligns better with your trading requirements. Both Oanda and FXCM offer distinct advantages tailored to different types of traders, so thorough research and consideration are crucial in making the right decision.


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