Considering Switching from OANDA to LMAX (via LQD Markets)

[Liquid validity]

Not interested.

lulz

 

[hungcable]

Not interested.

lulz

You're a funny type of guy, but I like ya!

 

[Purple Brain]

PB he's trying to help you,

Yes, I know and I appreciate it. I’m obviously coming across as ungrateful, which of course I’m not.

its a simple fact that LMAX costs are lower than Oanda.
Compare the LMAX spreads to Oanda spreads (allowing for LMAX commission - 2.50 base currency per side per 100k)
at any time during tomorrow and every day after.

Yes, you’re right. Just had a look and the spreads are significantly better than OANDA – and given the typical number of pips profit I’m making on most trades it could nominally add a minimum of 5% and more typically around 10% to profit per trade (and reduce losing trade losses by 10-20%). Which all makes perfect commercial sense for me to consider switching.

Spreads and execution speed are not the same on most platforms.
That won't be an issue if you swing trade.
Anything more frequent, where the spread is a larger % of average
win / loss and its makes a big difference - in slippage and spread costs.

I’ve never experienced slippage or delays with OANDA, but as above, that’s not the prime issue.

As for maximum spread, who cares, if its too wide don't trade it.
If you know the typical times it widens, don't trade those times.

Which is almost always where I’m at, but occasionally, if I’m in a trade and news which typically (historically) will widen spreads to say 10 pips and I’m a good 20-30 pips away from price with my stop, I can choose to stay in. I used to think that the news driven volatility would carry you as often as kill you and on balance that’s probably true. Where the zero/double zero comes into it is the spread widening. That’s just for the house which means news is not a straight 50/50 bet. Even if the move does go your way you’re already down to the tune of half the spread.

Oanda may be better for live practice and learning due to smaller
capital outlay.
Other than that LMAX costs are better.

Yes, I understand. LMAX are likely going to support my trading aspirations far better than OANDA as I transition from rank beginner to toddler trader.

 

[Liquid validity]

Don't forget to factor in LMAX commissions though.
5.00 base currency per trade, per 100k traded.
The equivalent of widening the spread by 0.5 points.
Still very good, all the same, plus the possibility of volume discounts.

 

[Purple Brain]

I opened a demo account this morning and am currently running it in parallel with my live OANDA account. Obviously a bit of a lag between my live platform activity and the demo, but it's a useful exercise.

Their live support has been surprisingly responsive and knowledgeable too.

Like the platform, but obviously will take a bit of getting used to.

The only other aspect I'll need to cover before committing funds to them is due diligence on their financial position. Although their 2nd year of posting losses is apparently better than expected versus their 3-year plan, their 3-year plan didn't factor in GS selling out their share and the original management team leaving. Mercer is by all accounts a good guy and they seem to be doing well on first pass, but there's no alternative to doing the spade work on the detail.

 

[Shakone]

Their finances are a concern.

The last report I read, their volume had gone from 25 billion per month to 125 billion per month in a year. At 25 billion, they were running a loss.

 

[Purple Brain]

OK. Like LMAX very much indeed. I appreciate their Depth of Market is just their depth of market and not THE depth of market, but even so, I suppose you could argue the case for it being a reasonable proxy. Which raises the spectre of me going off on a tangent of studying Level-2 (DoM) on forex. A subject in which I have a great deal of interest and have studied, but which has hitherto been a technique quite unusable with my current broker. Not that I plan on doing anything of that nature, or anything else, until I am squared away with my first 100 trades against the current version of my trading plan.

I asked LAMX if it would be possible to get more than the 5 levels provided as standard and they sent me the JAVA API programming interface in return. Really impressed with the platform, the support, the facilities and most importantly, the spreads.

 

[Liquid validity]

OK. Like LMAX very much indeed. I appreciate their Depth of Market is just their depth of market and not THE depth of market, but even so, I suppose you could argue the case for it being a reasonable proxy. Which raises the spectre of me going off on a tangent of studying Level-2 (DoM) on forex. A subject in which I have a great deal of interest and have studied, but which has hitherto been a technique quite unusable with my current broker. Not that I plan on doing anything of that nature, or anything else, until I am squared away with my first 100 trades against the current version of my trading plan.

I asked LAMX if it would be possible to get more than the 5 levels provided as standard and they sent me the JAVA API programming interface in return. Really impressed with the platform, the support, the facilities and most importantly, the spreads.

If you did decide to use the tape and DOM, I would use a 6E futures feed instead.
Be careful of signing up to the API facility, there are qualifying volume levels
and inactivity fees if you don't meet them, and account suspension after 3 months.
The API is really only for programmers, you don't need it to hook up
multicharts free for instance.
www.lmax.com/pdf/LMAX-API-Agreement.pdf
Section 4.

Stick to the web platform or multicharts free and none of that applies.
You could also use any platform for charting / tape and so on,
but actually execute using the web platform.
Without live execution, Ninja is free for instance.

 

[Purple Brain]

Continuing to use demo platform today and note an interesting difference from OANDA.

With OANDA you set your user preferences for default number of lots, stop, target etc. Means most trades are a one click event which you can hit fast. With LMAX - it uses whatever data you used last time you traded the given pair, which was a little disconcerting. Not a minus point, just something to be aware of if you're transitioning from OANDA.

Means you have to make a point of checking and resetting your buy/sell data every time you place an order. Asked LMAX if there was any way to have a default value and got a rather curt 'No'.

 

[Shakone]

Continuing to use demo platform today and note an interesting difference from OANDA.

With OANDA you set your user preferences for default number of lots, stop, target etc. Means most trades are a one click event which you can hit fast. With LMAX - it uses whatever data you used last time you traded the given pair, which was a little disconcerting. Not a minus point, just something to be aware of if you're transitioning from OANDA.

Means you have to make a point of checking and resetting your buy/sell data every time you place an order. Asked LMAX if there was any way to have a default value and got a rather curt 'No'.

Have you tried setting preferences using Multicharts (free version)? Not an ideal solution, since you only can trade 2 instruments on it, but may make things like this easier.

 

[Purple Brain]

I'm using metatrader for my charting and don't really want to take another new product on board, but thanks for the suggestion.

The LAMX data memory 'feature' isn't that much of an issue when you know about it. Most of my trades are in the same ballpark for number of lots, stops etc and I can always alter everything except the lots after entry if I'm in a rush.

You can always alter the size after entry as well of course if you've accidentally gone in too large which is exactly what I had to do earlier today, but not something you'd do too often before learning to take your time checking the data before entry.

 

[Purple Brain]

On the plus side of using LMAX: The spreads. They are generally, although not always, sharper than OANDA. On the more exotic pairs there's little in it and very occasionally OANDA beat LMAX by a small margin.

I am advised there are other benefits which a professional trader would appreciate more fully than a beginner like myself. But that's it. The spreads - mostly.

On the minus side of using LMAX:The support staff can be a bit curt with beginner type questions. They expect to be dealing with professionals and give me the impression that if I need to ask questions, I shouldn't be using their platform.

There is no GUI available similar to OANDA for placing trades, moving stops and take profit levels on a graphical basis; it's all hard slog number by number, position by position. If you have a number of trades for the same pair open such as when you scale-in to a position, you need to set the stops for each trade rather than the position as a whole.

The stops and take profits can only be set as a number of pips delta to the current price - not a specific price level. This is almost a deal-breaker for me. As a technical trader I set my stops on technical s/t levels. I don't want to have to do the math to work out how many pips that is from the current price - I just want to put in the price. And if you have more than one trade for a position and you want to set the stops/take profit the same 0- forget it. You have to calculate tick by tick what the delta will be to get them the same. Really, really painful. OK if you're hit and miss and couldn't give a toss if it's a few pip different, but for precise trading, almost useless.

Apparently they did have it where you could set the levels at a specific price, but there was demand to have it changed to number of pips. Why on earth they couldn't have provided both methods rather than forcing one set of traders to use another's preferred mode is beyond me.

While your aggregate P&L is shown in the account's base currency, the P&L for each trade/position is shown in the currency of the counter currency. Why? It just is. Can I change it? No.

There is no facility to set default for standard position size, stop or take profit levels - it all has to be done each and every time.

Will I switch to LMAX? Probably. I like to spreads advantage and I am advised the matching engines are going to give me a better price and fill than I will ever get going through a broker such as OANDA. But I will miss the ease of use, most definitely.

 

[Shakone]

On the plus side of using LMAX: The spreads. They are generally, although not always, sharper than OANDA. On the more exotic pairs there's little in it and very occasionally OANDA beat LMAX by a small margin.

I am advised there are other benefits which a professional trader would appreciate more fully than a beginner like myself. But that's it. The spreads - mostly.

On the minus side of using LMAX:The support staff can be a bit curt with beginner type questions. They expect to be dealing with professionals and give me the impression that if I need to ask questions, I shouldn't be using their platform.

There is no GUI available similar to OANDA for placing trades, moving stops and take profit levels on a graphical basis; it's all hard slog number by number, position by position. If you have a number of trades for the same pair open such as when you scale-in to a position, you need to set the stops for each trade rather than the position as a whole.

The stops and take profits can only be set as a number of pips delta to the current price - not a specific price level. This is almost a deal-breaker for me. As a technical trader I set my stops on technical s/t levels. I don't want to have to do the math to work out how many pips that is from the current price - I just want to put in the price. And if you have more than one trade for a position and you want to set the stops/take profit the same 0- forget it. You have to calculate tick by tick what the delta will be to get them the same. Really, really painful. OK if you're hit and miss and couldn't give a toss if it's a few pip different, but for precise trading, almost useless.

Apparently they did have it where you could set the levels at a specific price, but there was demand to have it changed to number of pips. Why on earth they couldn't have provided both methods rather than forcing one set of traders to use another's preferred mode is beyond me.

While your aggregate P&L is shown in the account's base currency, the P&L for each trade/position is shown in the currency of the counter currency. Why? It just is. Can I change it? No.

There is no facility to set default for standard position size, stop or take profit levels - it all has to be done each and every time.

Will I switch to LMAX? Probably. I like to spreads advantage and I am advised the matching engines are going to give me a better price and fill than I will ever get going through a broker such as OANDA. But I will miss the ease of use, most definitely.

Yes I agree, unless you're using Multicharts, that could be annoying. You could use a separate order as a stop i.e. open a stop order which you can do by price rather than number of pips, but then you'll have the problem of the stop not cancelling when position is closed which is dangerous. Either way it is fiddly. If you're happy with Oanda there's no reason to change. Like you say the spreads on some pairs may be better on Oanda. If you only trade a couple of the majors, then LMAX with multicharts is very good.

 

[kimo'sabby]

Will I switch to LMAX? Probably. I like to spreads advantage and I am advised the matching engines are going to give me a better price and fill than I will ever get going through a broker such as OANDA. But I will miss the ease of use, most definitely.

Seems like you're going to be much more profitable with LMAX. Thanks for the feedback and advisement.

 

[Liquid validity]

Yes I agree, unless you're using Multicharts, that could be annoying. You could use a separate order as a stop i.e. open a stop order which you can do by price rather than number of pips, but then you'll have the problem of the stop not cancelling when position is closed which is dangerous. Either way it is fiddly. If you're happy with Oanda there's no reason to change. Like you say the spreads on some pairs may be better on Oanda. If you only trade a couple of the majors, then LMAX with multicharts is very good.

I'll second that, the thing with MC free is you don't permanently restrict yourself
to just 2 instruments, you can delete 1 or both so you can add others.
Bit of a kludge I know, but until you decide to get a full MC license, or not,
its a decent workaround.

 

[random12345]

Their finances are a concern.

The last report I read, their volume had gone from 25 billion per month to 125 billion per month in a year. At 25 billion, they were running a loss.

Aye, annualised turnover was only 5 mill last year and they have a pretty hefty outstanding amnt due to Betfair on their books. Total loss was around £15 million (non annualised - accts are for 8mths after MBO).

I have significantly more than the FSCS guarantee deposited with them however... sometimes you get a feeling that people are playing by the segregation rules.

 

[Purple Brain]

There appears to be no way to order either individual or combined positions or even the instrument list itself. Are these things that concern only small fry like me? I'm not looking for Bloomberg functionality here, just basic facilities to order my book in a way that suits me best.

Spreads aside (and at the size I'm currently trading) - OANDA feels like a Savile Row made-to-measure while LMAX is an off-the-peg at M&S.

 

[Purple Brain]

I have significantly more than the FSCS guarantee deposited with them however... sometimes you get a feeling that people are playing by the segregation rules.

Does LMAX fall under deposit or investment definition? And is that still £85K and £50K respectively?

What do you mean by your last comment?

 

[Purple Brain]

Thought I'd check out the FSCS situation with LMAX. Wasn't anybody available to talk to when I tried first thing so I contacted OANDA.

I am covered up to £50K. I asked if it would be possible to open multiple accounts and be covered for £50K on all of them. The answer is no, as a client of OANDA Europe division I am only covered in the UK as an individual regardless of the number of accounts I have and regardless of how much I have deposited with them. The former point is moot as OANDA will only allow you one primary account. I asked if I could register with any other division for better protection and they said as a UK resident I couldn't. But they were helpful, I'll give htem that.

Finally found someone at LMAX to chat with. Transcript follows.

Am I being sensitive or it this chap being a bit snotty? Got the same sort of curt responses from him the other day. Less and less impressed with LMAX. Especially if he's got the amount wrong and it's only £50K not the £85K he says.

{Apologies for typos and format, but I had to do a screen dump to get the transcript, you can't cut & paste it).

 

[VielGeld]

I don't get the impression he's being snotty. Perhaps curt, but I'm sure he can't spend too much time answering customer questions. I find his responses satisfactory as they answer your questions concisely. That may just be me.

Though on topic, I'm reminded I really should move up from Oanda, but I've been very satisfied with their service. Can't complain.