FXCM vs Oanda
Short on time? We know what that's like....and that's why we're giving you the bottom line at the top of this page. While both OANDA and FXCM offer top-of-the-line services and excellent charting tools, we found safety of funds better at FXCM, and appreciated their superior trade execution. In this competitive broker comparison,FXCM is our winner.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 74.74% of retail investor accounts lose money when trading CFDs with FXCM. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
FXCM and Oanda are two prominent forex brokers who have been in the online trading business for many years. Oanda’s first data feed went live in 1997, while FXCM was founded shortly thereafter in 1999.
In this FXCM vs Oanda review, we outline the highlights of each trading platform to help you make a more informed decision. We evaluate:
|Feature||FXCM (visit site)||Oanda (visit site)|
|Headquarter:||United Kingdom||United States|
|FCA, ASIC, FSCA||CFTC, FCA, NFA, ASIC, IIROC, JFSA, MAS|
Type of Broker:
|No Dealing Desk, Dealing Desk||Market Maker|
U.S. Clients Allowed:
Commissions / Spreads:
|Yes for clients under FXCM LTD, FXCM AU and FXCM ZA|
Features and Platforms
FXCM and Oanda both have the following types of trading platforms available:
- Desktop trading platform
- Web trading platform
- Mobile trading platform
- MT4 trading platform
- NinjaTrader 8
NinjaTrader 8 is packed with excellent features and gadgets.
FXCM and Oanda have very good proprietary trading platforms that are highly customizable. (These are all of their platforms besides MT4 and NinjaTrader 8.) Both FXCM and Oanda offer the following features on some or all of their proprietary trading platforms:
- Autochartist (automatic pattern recognition, etc.)
- A wide range of technical indicators and drawing tools.
- Financial news from leading providers.
- Algorithmic trading functionality - coding, back testing, and execution of automated trading strategies.
- Various APIs with which algorithmic traders can connect directly to FXCM and Oanda’s trading servers.
- On-chart order execution and trade management. (Order execution can be done while watching the chart(s).)
- PAMM functionality.
When it comes to trading tools, FXCM has more to offer than Oanda. In FXCM’s app store, you can access various types of technical indicators, add-ons, and automated trading strategies (trading bots). There are apps for FXCM’s trading station, MT4, and NinjaTrader 8. Some of these apps are free while others can be bought.
FXCM also offers a paid programming service to clients interested in automating their trading strategies.
FXCM’s app store is packed with all kinds of tools, indicators, and automated strategies for MetaTrader 4, Trading Station, and NinjaTrader.
Education and Client Support
FXCM and Oanda offer daily market commentaries and frequent webinars to assist and educate their traders. Both brokers also have really good client support systems in place. Oanda’s support team is available 24/6 while FXCM’s is available 24/5.
|Type of Platform :||MetaTrader 4, Proprietary platform, Web-based||MetaTrader 4, Proprietary platform|
Guaranteed Stop Loss:
Guaranteed Limit Orders:
Interest on Margin:
FXCM and Oanda both have a good range of tradable instruments. Look at this table:
*Oanda has 12 different commodities, including gold, silver, palladium, and platinum. However, gold and silver can be traded in a variety of pairs, for example, Gold/Silver, Gold/EUR, Gold/GBP, Silver/GBP, Silver/HKD, etc. This brings Oanda’s total number of commodity instruments to 31.
Although FXCM has fewer instruments than Oanda, it has a very good variety. This includes 3 currency baskets and 1 cryptocurrency basket.
FXCM’s JPYBasket is a Japanese Yen benchmark and is designed to reflect the value of the JPY against a basket of major world currencies.
FXCM also facilitates cryptocurrency trading while Oanda does not. As you may have seen in this table, you can trade 5 different cryptocurrency CFDs with FXCM. They are bitcoin, ether (ethereum), ripple, litecoin, and bitcoin cash.
Although Oanda has no cryptocurrency and basket instruments, it has more stock indices (16 vs 11) and bonds (6 vs 1) than FXCM.
Oanda offers many tradable instruments, including 16 stock index and 6 bond CFDs.
|Yes(Non-US Clients Only)|
Typical Spreads and Fees
Spreads and Commission
FXCM and Oanda both have two main pricing models. The first model is a ‘spread only’ account where traders pay just the spread and no commission. The other option is a raw spread plus commission model.
To compare the two brokers, we used their ‘spread only’ accounts and we found that their spreads were about the same. For example, during a typical trading day, their spreads on the EUR/USD were found to be in the region of 1.2 pips, which is quite decent. Both brokers use floating spreads, which means that their spreads vary frequently.
While Oanda is a market maker, FXCM is an enhanced execution broker. What this boils down to is that FXCM is more likely to have better effective spreads than Oanda. For example, a trader is more likely to have his orders executed at the specified/desired price or even at a better price (positive slippage). This applies to different order types.
With FXCM’s enhanced order execution, traders often get positive slippage.
Both brokers offer better trading conditions for traders with large trading accounts or those (FXCM traders) who maintain a certain minimum monthly trading volume.
There’s a remarkable difference between FXCM and Oanda when it comes to the way they apply rollover charges and credits. FXCM uses the conventional method of applying rollover credits/charges at the end of the trading day (5 pm EST). Rollover charges/credits are triple on Wednesdays because the coming Saturday and Sunday’s rollover charges/credits are billed in advance.
Oanda has a second-by-second finance charge/credit system. This can be advantageous to some traders and negative for others, depending on which instruments they trade as well as the duration of their trades.
Security and Trust
A notable difference between FXCM and Oanda is that clients of FXCM have segregated trading accounts while clients of Oanda do not. The FCA, by which FXCM is regulated, requires FXCM to ensure a clear segregation between money belonging to retail clients and money that belongs to itself. The funds are kept safe by top global banks and cannot be used to reimburse creditors in the unlikely case of FXCM going bankrupt or insolvent.
Oanda, on the other hand, clearly states in their risk disclosure statement that customer deposits are not held in segregated accounts and “are not protected by the Securities Investor Protection Corporation, and are not covered by insurance or insured by a derivatives clearing organization in the event of the bankruptcy or insolvency of OANDA, or the misappropriation of such funds.”
FXCM is clearly better equipped to secure client funds than Oanda. However, we know that in 2017, FXCM was fined $7 million by the U.S. Commodity Futures Trading Commission for defrauding its retail clients. FXCM misled these clients to believe that it was a ‘no dealing desk’ broker and that its interests were aligned with that of its clients. Oanda, on the other hand, is known to be a ‘market maker’ (dealing desk) broker, which means that it can take the other side of its clients’ trades (trade against its clients).
Oanda and the FXCM group of companies are regulated by different top-tier financial authorities around the world. A major difference, however, is that traders from the United States are not eligible to apply for a live trading account with FXCM, while Oanda’s services are available to U.S. residents.
FXCM Vs Oanda – Verdict
FXCM and Oanda both offer outstanding trading conditions in terms of low trading costs, reliable trade execution, and great trading platforms. These brokers also have a good range of tradable instruments, although we would like to see them add a good number of individual stocks CFDs to their lists. Oanda’s list also lacks cryptocurrencies, but perhaps it will have some crypto instruments available soon.
Unlike FXCM, Oanda does not keep its clients’ funds in segregated accounts, which is a concern. Oanda is also a market maker, as opposed to FXCM which is an enhanced execution broker. The latter is better for retail clients because the matching algorithm always displays the best bid and ask prices from a multitude of different liquidity providers).
All in all, we are more comfortable trading with FXCM than Oanda. Both brokers are competitive, but we really like FXCM’s superior trading tools, segregated client accounts, and enhanced trade execution.
Does FXCM or OANDA offer lower pricing?
FXCM offers traders an overall lower pricing environment. While the EUR/USD is listed from a spread of 0.6 pips at both brokers commission-free, high-frequency traders have the choice of spreads as low as 0.2 pips for a commission of $25 per $1,000,000 in trading value.
Is FXCM or OANDA safer for Forex and CFDs trading?
Oanda maintains a safer trading environment, having a clean regulatory record. Its principal regulator is the US Commodity Futures Trading Commission (CFTC) and NFA. The FCA in the UK, the IIROC in Canada, the MAS in Singapore, the ASIC in Australia, and the FSA in Japan add additional top tier oversight. FXCM is in a rebranding phase as Leucadia company owned by Jefferies Financial Group, listed on the NYSE under ticker symbol JEF. It relocated to the UK after losing its US license amid scandals, malpractice, and fraud, but has a clean record since its transition.
Which trading platform is better: FXCM or OANDA?
The overall choice is superior at FXCM, where traders may select between the retail-favorite MT4, the independent NinjaTrader, its proprietary Trading Station, and the social trading market leader ZuluTrade. Enhancing the choice is the FXCM suite of tools for algorithmic trading solutions. Oanda maintains its proprietary trading platform and the MT4 trading platform. Numerous APIs support third-party developers.