Reflections on 2011

As the year draws to an end, I would like to take this opportunity to thank our clients and partners for their continued support throughout 2011, and the valuable trust and confidence they have placed in us.

Looking back, 2011 was another exciting year for OANDA. We opened offices in Chicago, London, and Tokyo so that we now have eight offices around the world to better serve our clients. We bridged the MetaTrader-4 platform to our proprietary fxTrade platform to give our traders more choices and flexibility, and we began accepting credit card deposits to fxTrade accounts. We greatly enhanced our mobile offerings, since we are convinced that mobile platforms will become the primary form of access within a few years. And as always, we spent tremendous energy to make our trading system faster, more efficient, and more reliable, improving the back-end with innovations that are not easily visible to our traders.

We introduced a number of new services and tools designed to help make our clients more profitable, which we strongly believe is in our best long-term interest. For example, we expanded our monthly fxTrade account statements to include statistical information to allow clients to better understand their trading performance. We now individually analyse each client’s trading patterns, pointing out common trading mistakes they may be making. And we released a number of new fxLabs tools to help clients make better trading decisions, including new candle stick graphs, the Forex Market Tracker, a chart that displays news effect and the attendant affect on exchange rates, and a review of our clients’ most successful and least successful forex trading strategies.

Finally, for what it is worth, my interview in Futures Magazine made it to that publication's "Top 10 Must-Read Articles for Traders". If you missed the article, you can read it here.

We live in interesting times
But 2011 was also a challenging year for many traders given the financial stresses and uncertainty in Europe. Especially towards the end of year, we began to see the start of some worrisome patterns reminiscent of the patterns we saw in late 2008, when the trading public endured large losses. 

Our concern over the similarity of these patterns led us to take the unprecedented step of warning our clients to be cautious and to consider not trading during times of excessive volatility. We sent a “Market Storm Warning” email to our most vulnerable clients outlining our concern, and we published an infographic and blog post to reinforce the message. We would rather prevent our clients from getting into a loss situation than worry about our short term revenue.

Given these tumultuous times, we firmly believe that fxTrade, as a trading platform, is better suited than other platforms to deal with situations that stem from economic turmoil. Clients can trade and experiment with very small trade sizes (as low as $1) while getting the same tight spreads. They can incrementally reduce positions sizes to avoid margin calls. They can use fxTrade Practice for as long as they wish without getting aggressive sales calls.

And most importantly, fxTrade allows clients to trade at one of the lowest price points available. Perhaps that is why the rate of new clients signing up for OANDA fxTrade is at an all-time high, as is OANDA’s overall trading volume.

OANDA, in fact, is in the top position of all non-bank Retail Foreign Exchange Dealers in the U.S., according to the most recent report published by the U.S. Commodity Futures Trading Commission (CFTC) on October 31, which showed that OANDA Corporation maintained $144,302,538 in Adjusted Net Capital and $117,210,321 in Excess Net Capital. In another set of data published by Forex Magnates, OANDA was twice named as having the highest ratio of profitable retail clients in the U.S. in Q2 and Q3 of 2011.

While we are cautious with respect to the economic turmoil in Europe, we do look forward to an exciting 2012. We expect to launch a number of major new products in the first quarter of 2012, and also make some other major announcements.

We wish everyone the very best this holiday season, and all the best for a healthy and successful New Year!