Forex.com vs Oanda

Oanda vs Forex.com is a popular search term among traders looking to find a reliable broker. Which of these two is the better choice?

Before picking a broker, it's important to do a background check about their history and every other important detail. Trading the financial markets comes with a certain level of risk that requires you to do your due diligence regarding your choice of broker.

Company Background

Oanda offers a stellar trading platform and a regularly updated mobile app, allowing experienced traders to create complex strategies and get the latest insights. The firm offers transparent pricing, is regulated by an impressive number of government bodies, and top class research tools and insights. Combine this with Oanda's product offerings, including spread-betting in Ireland and the UK, and you get a great option for experienced traders.

Oanda was one of the first brokerages in the forex trading industry. It was also the very first to provide free real-time exchange rate information online.

This was a big, big deal. It changed how every competitor did business.

In 2005, Oanda made another big move. It released a document called The Forex Trader's Bill of Rights.

The Forex Trader's Bill of Rights did then and still does set the standard for how brokerages should operate when it comes to pricing and protocols. In short, the Bill of Rights tells forex traders what they have a right to expect and deserve when it comes to their trading platform partner.

Oanda was acquired by CVC Capital Partners in 2018. Less than a year later, Oanda was awarded the top dog slot in the Investopedia's“Best Online Brokers”forex category.

As of 2020, Oanda's future continues to look very bright.

Forex.com offers transparent pricing that varies depending on your account. The broker caters mostly to active and high-volume traders, and offers a couple of advanced platforms to suit different activity levels. Traders will have the option to choose between several account types, and over 80 currency pairs, in addition to gold and silver.

Since Forex.com was founded in 2001, the company has made continual strides to stay on top of its game and at the top of the notoriously fickle forex industry.

Part of the reason may be that, while Forex.com may be named for its riskiest asset class, traders can access a wide range of securities beyond simply forex pairs.

Forex.com joined the National Futures Association (NFA) and the Commodities Futures Trading Commission (CFTC), the U.S. powerhouse regulatory duo, in 2004.

Since that time, Forex.com has been cited twice for regulatory infractions.

The first citation, which happened in 2010, resulted in the fine of a measly $459,000 – the equivalent of soda machine change in the trillion dollar-a-day forex industry. The charge? Basically, it amounted to fraud. Abusive margin, slippage and liquidation practices. The charge was settled out of court, with NFA mediating.

In 2019, Gain Capital Group, Forex.com's parent company, was cited. This time, the charge resulted in a $50,000 fine – so low as to be nearly free. The charge was related to a malfunction in the forex giant’s electronic trading platform.

While it is never a small deal to be cited by any regulatory oversight entity, the truth remains that the U.S. marketplace is the most restrictive in the world. So to be cited in the U.S. is to be held to a very high bar indeed.

Regulatory Compliance

Staying safe and secure when online trading is imperative. Therefore, we only recommend brokers that are licensed, transparent about their operations, and that use the latest security features. We're happy to say that Forex.com and Oanda exceed our expectations regarding their security, ticking all the essential boxes.

Forex.com is regulated by five tier-1 regulators – the Australian Securities & Investment Commission (ASIC), Japanese Financial Services Authority (JFSA), Commodity Futures Trading Commission (CFTC), Investment Industry Regulatory Organization of Canada (IIROC), and Financial Conduct Authority (FCA). These are followed by zero tier-2 licenses and one tier-3 regulator.

Oanda is regulated by six tier-1 regulators, including the Australian Securities & Investment Commission (ASIC) and the Monetary Authority of Singapore (MAS), in addition to JFSA, CFTC, IIROC, and FCA, which also regulate Forex.com. Furthermore, like its competitor, Oanda holds zero tier-2 licenses and one tier-3 license.

Having done our research, we need to say that these two platforms are practically identical when it comes to security. That said, there's no clear winner.

Trading Platforms

Forex.com offers a range of trading platforms, including its proprietary platform, Advanced Trading, and the popular MetaTrader 4 and 5 platforms. OANDA offers its proprietary platform, OANDA Trade, and also supports MetaTrader 4.

Both Forex.com and OANDA support MetaTrader 4, the most popular forex trading platform. Forex.com also offers MetaTrader 5, the newer and more advanced version of the platform.

Forex.com does not support cTrader or TradingView. OANDA, on the other hand, does not support cTrader but does offer integration with TradingView.

Neither Forex.com nor OANDA offers 3rd party social or copy trading on their platforms however, it is possible with MetaTrader Signals if using MetaTrader 4 or 5.

Forex.com offers free VPS hosting for qualified clients and a range of other trading tools, including advanced charting and analysis tools. OANDA also offers advanced charting on its platform, as well as a range of tools for market analysis.

Account Types and Services

Oanda lets you trade over 70 currency pairs, plus CFDs, bonds, precious metals and indices. CFD and precious metals trading are not available to U.S. clients. The broker is well regulated in a number of jurisdictions and offers 2 account types:

Standard: This account type gives you a choice of 4 trading platforms and a wide range of analysis tools. No minimum deposit is required and you get access to institutional-grade execution services.

Premium: A minimum deposit of $20,000 is required for this account type that offers all of the features of the Standard account, plus unlimited wire transfers, a dedicated relationship manager and priority service queues. You can also access several 3rd-party platforms via your premium account including NinjaTrader, TradingView and Oanda’s proprietary Oanda Pro platform powered by Currenex.

FOREX.com lets you trade over 80 currency pairs, plus spot gold and silver. If you wish to trade futures and options on futures, you can open an account with FOREX.com's FuturesOnline affiliate. The 3 types of accounts you can open at FOREX.com are:

Standard account: This basic account offers competitive dealing spreads and no commissions. You can also reduce your costs by as much as 18% through cash rebates, and it supports the use of MT4/5 platforms in addition to FOREX.com's proprietary platforms.

Commission account: This account features dealing spreads as low as 0.2 pips on EUR/USD, although you must pay an additional $5 commission per 100,000 base currency units. No MT4/5 option exists for this type of account.

STP Pro account: FOREX.com's premium account requires a minimum deposit of $25,000 and has a minimum trade size of 100,000 base units. This account gives you access to an electronic communications network (ECN) and Level II quotes, but it does allow using MT4/5 trading platforms.

Trading Instruments

Both Forex.com and Oanda excel when it comes to Forex and CFDs trading. But how do these two brokers compare regarding trading markets available?

Forex.com users can take advantage of the following:

Forex Market: Trade over 80 Forex currency pairs with a minimum spread as low as 0.2 pips;

Commodities: Forex.com offers 16 commodities (5 metals, 4 energies, and 7 agricultural contracts) as CFDs and Futures;

Indices: There are 15 available indices from all over the world;

Stocks: Forex.com grants access to over 4,500 most popular US and UK stocks with commissions as low as 0.08%;

Cryptocurrencies: The broker offers five popular cryptocurrencies: Bitcoin, Bitcoin Cash, Ethereum, Litecoin, and Ripple.

Regarding what Oanda can offer, its selection of markets includes:

Forex Market: You can trade over 70 currency pairs with spreads as low as 0.6 pips (or even 0 pips when trading from Australia);

Commodities: Oanda offers over 31 commodities to trade;

Indices: Oanda users can trade 16 worldwide indices;

Bonds: Oanda offers its users bond trading, with 4 US bonds and 1 UK bond available for trading;

Bitcoin: You can trade only two crypto assets at Oanda – Bitcoin and Mini Bitcoin.

Spreads, Fees, and Commissions

Forex.com offers competitive spreads on its standard account, often lower than the industry average. On the other hand, OANDA's spreads tend to be variable, with the potential to be lower during peak trading times. For more details on standard account spreads, you can check out this Standard Account Testing.

When it comes to forex trading, the spread is a crucial factor to consider. It's the difference between the buy and sell price of a currency pair, and it directly impacts the cost of a trade. Looking at the data, it's clear that there are some differences between the brokers.

OANDA, for instance, has impressively low spreads across the board. For the EUR/USD pair, they offer a spread of 0.6, which is significantly lower than Forex.com's 1.2. This trend continues across most of the pairs, with OANDA consistently offering lower spreads. This suggests that OANDA could be a more cost-effective choice for traders who prioritise low spreads.

Forex.com, on the other hand, has higher spreads, but this doesn't necessarily mean it's a worse choice. Brokers often balance out their offerings, so while Forex.com's spreads are higher, they might offer other benefits such as superior trading platforms or customer service.

Comparing these brokers to the industry average, it's clear that both are competitive. OANDA's spreads are consistently below the average, while Forex.com's are slightly above in some cases but still in line with what's typical in the industry.

In conclusion, if low spreads are your primary concern, OANDA seems to be the cheaper option. However, it's essential to consider other factors such as the trading environment, platforms offered, and the broker's trustworthiness before making a decision.

Forex.com's RAW account, known as the DMA account, offers spreads as low as 0.1 pips. OANDA doesn't offer a RAW account, but its spreads on the standard account can be competitive.

Forex.com charges a commission on its DMA account, while OANDA charges no commission on its standard account, relying instead on spreads.

Neither Forex.com nor OANDA charges deposit or withdrawal fees, which is a significant advantage for traders.

Forex.com charges an inactivity fee, while OANDA does not. However, OANDA charges a monthly inactivity fee after one year of no trading activity.

Customer Support and Education

Customer support is a very important aspect of any online forex broker and the lack of good support can cost a trader significantly in a volatile market. Find out what each broker offers below.

Oanda offers a complete customer service facility and among the best in the online forex market. You can contact all of its major offices in Asia, North America and Europe through local phone numbers during regular local business hours and get support in 7 languages: English, German, Spanish, Portuguese, Russian, French and Italian.

Additionally, Oanda offers a demo account to allow traders to test their copy trading and trade strategies before using Oanda Trade with forex pairs, exchange rate, and margin rates in the market.

Oanda's customer support team can be reached via email 24/7 and through live chat and phone between forex trading hours of 4 p.m. Sunday to 6 p.m. Friday EST. If you have a specific concern, Oanda has an extensive frequently asked questions (FAQ) page to target specific trader concerns.  

FOREX.com's customer support lets you contact the broker via email and live chat. While no direct phone number was found on its website, you can contact FOREX.com through its convenient live chat feature 24 hours a day during the trading week from 10 a.m. Sunday until 5 p.m. Friday EST.

Conclusion

Forex.com and Oanda are on a very short list of available forex trading platforms that still accept U.S. traders. So if you are American and want to trade forex, these are two of the best options you have, period.

For traders outside the U.S., choosing between Oanda vs. Forex.com really will be a matter of deciding which platform best suits your personal preferences.

Neither comes out of this comparison with any major black eyes. Both offer comparable spreads, fees, customer support and tools. If you are new to forex, you may find you prefer Forex.com. For experienced traders, Oanda often seems to suit.

Ultimately, both companies are built to last, which means you are likely to find yourself in basically good hands with either company.