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Did anyone else get burned by OANDA's Stop Hunting Practices Today?

TradeSmarter
Feb 07 2014 at 17:26
22 posts
Just got burned this morning by OANDA's practice of setting their own prices on the USD/JPY pair in order to take out their customers stop loses so that they can profit. This happened to me this morning and I'm still pretty upset about it.

But this is what you get when dealing with a bucket shop that may or may not be in financial distress and therefore feels the need to rip their customers off from time to time.....

Anyhow, check out this chart and read my discussion with Oanda and judge for yourself and tell me if Oanda or I am wrong in this. Am I being unreasonable in demanding them to give me my trade back?

https://www.tradingview.com/v/ybqheJnz/

CrazyTrader (CrazyTrader)
Feb 08 2014 at 10:15
1718 posts
Hi,

Unfortunately they are right. I think you got sl hit on NFP released and market usdjpy has been very volatile.

My lowest was @ 101.42 but it could have been the same dip or lower or a bit higher for some brokers.

It depends on Liquidity providers.

You have been unlucky this time... you can change broker but no guarantee that it won't happen again with others.

It is the same when TP is not hit by 1 f..... pips. And it would have done with others brokers.

This is forex rules.


Haggan798 (Haggan798)
Feb 08 2014 at 10:20
5 posts
Hi there,

sorry to hear that it happened. But brokers have no incentive to hunt your stops since they make money when you open the trade via spread/comission.

Spreads aren't fixed in the market place and they depend on liquidity (liquidity providers). Spreads that brokers advertise are usually average spreads.

On news events and certain hours liquidity might dry up meaning market participants will remove limit/stop order from the market and the next price to fill your order might be higher as was in your case.

Please remember to consider both the ask and the bid price. you can see it in the order window i.e. on mt4: https://screencast.com/t/1AUJFtqzH4Ll


If brokers would be hunting stops - they would be quickly out of business. they need to misprice particular instrument at [articular time... and people would use that as opp tu buy/sell since REAL price is different and market would come back to normal levels very quickly.

Please take a minute to re-think it. Since you seem to have a flaw in your fundamental knowledge about the market. (no offence intended here).

Peace

arturas.sadauskas@
TradeSmarter
Feb 08 2014 at 14:42
22 posts
Yeah, I've been reading about the liquidity argument there for a bit. I can understand spread widening in non USD Major pairs, but not in USD Major pairs.

In any event, I've been trading off and on for over 5 years and never got burned like this on a USD pair. Also, a lot of dealers offer fixed on USD Major pairs.

With this said, if I want to trade with Oanda, I am going to have to employ the same strategy that I used for Exotic Pair Stops.

 

TradeSmarter
Feb 10 2014 at 12:20
22 posts
Hmm.

First, Oanda is not a Broker. They are a Dealer/Market Maker. Stop loss hunting is not done at the broker level since brokers do not act as the party on the other side. How ever Forex Dealers which are acting as Market Makers are the counter party and this is where this activity occurs.

See https://blog.currensee.com/2012/05/the-truth-about-stop-hunting/

Again, if Oanda was a Broker which is what you seemed to have been mislead to believe you are simply wrong, or you are misrepresenting the truth.

Furthermore, the fact that Oanda deals in micro lots further confirms they are a Market Maker verses a broker since these lot sizes can not be traded anywhere else except with Oanda.

Haggan798 (Haggan798)
Feb 10 2014 at 12:37
5 posts
price moves every millisecond. there are quite a few milliseconds between what you and when you click. it has to be really tiny difference though.

In volatile times spreads widen and prices are different from broker to broker (minimal difference though).

FX is not centralized so don't expect it to work like it would be.

Every trader is aware of NFP volatility and mispricings(amongst brokers) and spread widenings is not something illegal.


arturas.sadauskas@
TradeSmarter
Feb 10 2014 at 12:46
22 posts
It's funny how people keep on referring to Oanda as a broker. I'm starting to wonder if those people are victims of a misinformation campaign by Oanda, or if they are Oanda trying to spread the misinformation. 😀

minyu2 (minyu2)
Feb 11 2014 at 20:19
38 posts
how is that funny?

TradeSmarter
Feb 12 2014 at 13:01
22 posts
There's a huge difference between a broker and a Dealer/Market Maker.

Meaning a broker has a duty with both parties to broker a fair and honest deal and has no other interest in the deal than making his commission and get paid the same no matter which party comes out on top.

A Dealer/Market Maker makes his money by betting against the other party with the hopes of market volatility creating gaps in the prices so that he can make his money. That's why Dealer/Market Maker's make their money on the spread between the ask and the bid. Also they make their money by playing against their customer.

Here's another an analogy, it like when you are playing cards, when you play black jack in the casino the house has no interest in you winning and every loss is a win for them. However when you are playing poker, the casino in general is just providing the coalitions for the game to occur and may only make a small fee off each pot, but they themselves are not players in the game.

In short, Oanda is a player, and they are playing against their 'Customers', just like the Casino does when you play black jack. To believe in anything else is just plane ignorance and actually it's probably not funny but sad.

So in essence, I got ripped off by the black jack dealer at Oanda.

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