The Forex Chronicles

Oanda Moves Into Prop Trading With Labs Trader Program

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Introduction

There have been hundreds of prop trading firms popping up in recent years, many of which have been completely unregulated.

Subsequently, they have conducted some fairly dubious practices in order to prohibit or ban profitable traders, and prevent them from passing their challenges.

I think we have all read about what happened with My Forex Funds, for example, which used to be one of the leading names in this space.

In addition, many others have also made life difficult for traders with slippage, downtime and delayed executions, for instance.

So it is interesting to see that Oanda, one of the leading forex brokers, and arguably one of the most trusted brokers, are entering this space with their own unique prop trading program – the Labs Trader program.

Why are Oanda Starting a Prop Trading Program?

I think it is fairly obvious why Oanda and other currency brokers are interested in starting their own prop trading program.

The fact is that these prop firms have enjoyed huge success in recent years and have racked up some huge profits because very few people actually pass the challenges.

So it is only natural that they will want a slice of the action, particularly as many traders are now trading through these firms rather than through a traditional broker.

Oanda have a large and active database of traders that they can promote this service to, and also have significant marketing resources to attract new traders.

Plus they should be able to offer tighter spreads, better executions and a generally more professional service than many of the smaller prop firms.

Who Can Join This Oanda Labs Trading Program?

It should be pointed out that this program will not be available to traders from all countries.

According to the official press release, Oanda Labs Trader is only available to residents of countries serviced by Oanda’s Global Markets division, which means that traders from the UK, the US, Australia or Canada, for instance, will not be able to join their prop trading program.

What Challenges / Account Sizes are Available?

As with many similar prop firms, Oanda are offering a variety of different challenges and account sizes, as you can see below:

The smallest account size that you can go for is the $25,000 Titanium account, which will set you back $249, but you can also take the $50,000 Silver challenge for $399 or the $100,000 Gold challenge for $699.

Alternatively, you can pay $1200 to take the Platinum challenge in the hope of obtaining a fully funded $250,000 account, or you can take the Black challenge for $2400 in the hope of obtaining a fully funded $500,000 trading account.

Whichever one you go for, you will need to achieve a 10% profit in phase one followed by a 5% profit in phase two to pass the challenge (without hitting the daily drawdown limit of 5% or the maximum drawdown of 10%).

You will then be able to start earning 75% of any profits on a fully funded account.

Final Thoughts

I think many people were very excited when they heard the news that Oanda were creating their own prop trading program because they are undoubtedly one of the more reputable brokers with operations in numerous countries.

However this will quickly have turned to disappointment when it became clear that this service would not be available to traders in the UK and the US, for example, and several other countries.

Nevertheless, if you do live in one of the countries serviced by Oanda’s Global Markets division, you may want to consider signing up to Oanda’s Lab Trading program because they are offering the chance to obtain a fully funded account up to $500,000.

My eToro Performance in 2023 – Up 33.24%

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November and December Results

Before I discuss my overall performance for the year, I just want to update you with the results from November and December 2023 because these made a strong contribution to the final result.

  • November +9.82%
  • December +5.83%

As you can see, November was a big month for the portfolio with a gain of just under 10%, thanks largely to a big rebound in the US stock market that started at the end of October.

This continued into December with a traditional Santa rally that can be relied upon nearly every year to push share prices up, and this increased the value of the portfolio by a further 5.83%.

Overall Performance for 2023

Another strong month for me was January, right at the start of the year, which saw a gain of 9.51%.

Many of the other months saw more modest gains of 2 or 3%, but I was more than happy with that because the final result for 2023 was a gain of 33.24%.

Biggest Gainers

It is fair to say that Google (up 49% on my last purchase in February) and Amazon were two of the biggest gainers in 2023, along with the SPY ETF, which tracks the S&P 500.

However some of my UK dividend stocks have bounced back strongly and paid healthy dividends, especially IG and Aviva, and Catalyst Pharmaceuticals is currently over 41% in profit at $16.81, having originally bought at $11.90, and I think there is a lot more to come from this particular healthcare stock.

I have also traded in and out of this same stock a few times as well, which has helped to boost my performance stats.

Another strong gainer was Easyjet which gained just under 25% in two months before I decided to bank my profits on this stock last month.

Biggest Losers / Disappointments

Most of my portfolio stocks are now in profit, but I have one Russian stock that I am still unable to sell (Qiwi) and another stock that has been a constant disappointment (Tencent).

The fundamentals of Tencent remain strong, but it keeps experiencing setbacks every time the share price looks like recovering, and the recently announced regulation on Chinese gaming is the latest setback.

This is one stock that I am currently considering selling, and I may well replace it with Alibaba because I think this could be one of the strongest performing stocks in 2024 as it is hugely undervalued, with a very low P/E and a rapidly increasing free cash flow yield.

Recent Purchases

With regards to my most recent investments, I haven’t made too many changes to the portfolio. However after banking profits on Easyjet, I did buy back into two Chinese stocks, JD and Baidu, that were far too undervalued to ignore after they both saw some big sell-offs.

I think these will both do well in 2024, and as I just mentioned, I also really like Alibaba as well because this is arguably even better value right now, so this is probably next on my list when I next bank some profits.

Trading Strategy

With this current high interest rate environment, I have been very selective about the stocks that I have been buying.

For example, I will not even consider buying a stock that has high levels of debt because this is obviously very expensive to finance with interest rates so high compared to recent years.

Equally as important, I will only buy stocks that are generating large amounts of free cash flow that is forecast to grow even more in the next few years.

That’s because these companies are best equipped to deal with any recession if there is one, and have lots of capital to reinvest back into the business, buy back shares to increase the EPS or pay out to shareholders in the form of dividends.

IG Group is a good example of one such stock that satisfies both of these criteria, and this is currently up 12.1% and 22.25% (not including dividends) on the two purchases that I made in 2023.

Finally, as in any economic climate, I always want to see some degree of revenue and earnings growth moving forward to help maintain a steadily rising share price over time, and I use analyst forecasts, trading updates, conference calls, webinars, etc. to help me with this.

I should point out that I do place a few forex trades in this eToro account from time to time, but I mainly use this account to trade a global portfolio of stocks.

Risk Score

My risk score has remained between 3 and 4 in 2023, which indicates that I have a fairly low-risk strategy, so a gain of over 33% is a decent result when you compare it to the overall risk of the trading strategy and the portfolio of stocks held.

Copiers

At the end of 2023, I do not currently have any active copiers as I am not currently part of the Popular Investor program, and therefore do not receive a great deal of exposure.

However I also understand that many prospective copiers will be wary of the losses made in previous years, and I can completely relate to that.

So all I can do is to stick to my current strategy of investing in quality growth stocks that are generating large amounts of free cash flow, and hopefully the performance of this year can be repeated in 2024 and beyond.

Final Thoughts

While I am delighted with my overall performance in 2023, I can not take too much satisfaction because of the disappointment of previous years.

In previous years I was trying out different strategies and undoubtedly bought too many speculative early-stage companies that ultimately resulted in some big losses because I was too stubborn to cut my losers early.

However I have now gone back to the strategy that I use for my retirement accounts which is to only invest in proven quality companies that have little or no debt and are increasing their earnings and their free cash flow every year, and preferably paying a dividend as well.

Follow Me on eToro

If you would like to automatically copy my trades in eToro, my username on this platform is SteadyProfits and you can copy my trades here if you have an account with eToro.

You can also track my performance and see my latest trades from the same page.

Whether you choose to follow me or not, I wish you luck with your trading and investing, and hope that you have a great 2024!

The5ers Offering $20K Bootcamp Challenge For Just $1

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Bootcamp Challenge

Prop firm challenges have become very popular in recent years because for a small one-off fee, traders can gain access to a fully funded account if they successfully pass the challenge.

One of the most popular challenges is the Bootcamp challenge offered by The5ers, one of the most popular prop firms, and I have some exciting news to report because for a limited time only, you can now buy one of these challenges for just $1 until midnight on 31 December 2023 (usual price is $95).

Simply click on this link and click on Bootcamp challenge to take advantage of this offer.

Please note that this has proven to be a very popular promotion according to The5ers’ feed on X, so it may take a few hours to receive your account credentials, and the server has gone down a few times, so you may need to be patient during this time.

Passing the Challenge

The Bootcamp challenge is a real test of your trading skill because you are required to pass three individual challenges without breaching the 5% drawdown limit on each one.

The profit target is 6% for each phase of the challenge, which is quite hard to achieve, but it is not too demanding in comparison to the drawdown, and you do have an unlimited amount of time to pass each challenge.

Therefore you do not have to take excessive risks to complete the bootcamp challenge. You can simply trade slowly and steadily using your existing trading strategy, managing your risk accordingly to ensure that you don’t fail the challenge with a couple of bad trades.

If you do pass the challenge, there are no other fees to pay as part of this special $1 promotion, unlike the regular bootcamp challenge that requires a one-off fee to gain access to the fully funded account after passing the challenge.

The Rewards

If you are successful in your quest to pass each phase and complete the bootcamp challenge, you will start off with a $20K fully funded account and will then need to hit a profit target of 5% to scale up to the next level, $30K in this case, without breaching the drawdown limit of 4%.

You will receive 50% of the profits on the first level only, and then it goes up to 75% on each of the higher levels, before increasing to 80% at $2m and finally up to 100% when you reach the $2.5m level, where it will remain until the final level of $4m.

There are certain trading conditions that you should be aware of before you start trading. For example, a stop loss needs to be entered on every trade, and you cannot risk more than 2% per trade.

However you are allowed to trade the news, for example, and there are many instruments that you can trade, including currency pairs, indices, metals, commodities and cryptocurrencies.

So there is no reason why a skillful trader cannot pass this challenge and obtain a funded account.

How to Buy This $1 Challenge

If you have a debit or credit card, you can buy this bootcamp challenge online for just $1 (or your local currency equivalent).

You will then receive your evaluation trading account within 24 hours and will be able to start entering trades once you have downloaded and logged in to the MT5 trading platform using your login details.

→ Click here to buy this $1 bootcamp challenge

If you do take up this offer, I wish you the best of luck!

Beware of Spikes in GBP/JPY, EUR/JPY, USD/JPY, AUD/JPY Pairs

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Crazy Spikes in Yen Pairs

If you trade the forex markets every day and follow some of the major yen pairs in particular, such as the GBP/JPY, EUR/JPY, USD/JPY and AUD/JPY, for example, you may have noticed that these have all had some huge spikes at various times in the last few weeks.

Of course it’s normal to see some big price spikes after major economic data releases, but with these yen pairs we have seen some huge movements on all of these pairs at the same time for no apparent reason.

The latest big price spike occurred early this morning at approximately 7.45 AM UK time, when there was no news scheduled on the economic calendar.

You can see on the 5-minute charts of the GBP/JPY, EUR/JPY and USD/JPY below how the price spiked sharply downwards before bouncing back upwards again almost immediately:

What is Causing These Price Spikes on the Yen?

The most likely explanation is that the Bank of Japan are intervening to try to strengthen the yen, particularly with the USD/JPY continuing to try to push above the key 1.50 level, although nobody knows for sure if this is true or not.

If it is, it doesn’t seem to be working because whenever there is a huge spike down, the price always bounces back straight away.

Why is This A Big Problem for Traders?

These spikes may not necessarily pose a risk for longer term traders who trade the daily, weekly or monthly timeframes, for example, but for those short-term traders who trade the lower timeframes, they can potentially destroy your account.

That’s because even if you use a relatively tight stop loss of 20 points, the price could easily gap down 80-100 points and your stop loss would be executed at this level instead.

Therefore you could incur huge losses on your personal account, and potentially lose a prop firm account if they have a low drawdown limit.

Indeed in recent weeks there have been quite a few traders on X (formerly Twitter) who have said that they lost their prop account because of one of these seemingly random spikes.

What is the Solution to this Problem?

If you want to protect your accounts, I think the most obvious solution is to simply stop trading the yen pairs altogether until the markets settle down and these sharp spikes stop happening.

There are plenty of other pairs that you can trade that don’t seem to have this problem, such as the GBP/USD, EUR/USD, EUR/GBP, AUD/USD, AUD/NZD, USD/CAD, USD/CHF etc.

At the present time, it is simply not worth the risk trading any of the yen pairs. Capital preservation is everything in this profession.

USD/JPY Hits New High and Had Another Strong Month in September 2023

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Introduction

As we enter a new month, we can see that the USD/JPY recorded another strong month in September. The price closed the month out at 1.4934, just 66 points off the key round number of 1.5000.

Subsequently, this was the 5th month out of the last 6 that this pair finished higher, which just underlines how strong this particular forex pair has been.

At the start of this 6-month period, the USD/JPY was trading at around 1.33, so the dollar has strengthened against the yen by over 12% during this time.

Where Does the USD/JPY Go From Here?

Many swing traders will now be asking themselves where the USD/JPY goes from here?

Does it break through the 1.50 level and continue heading higher, or is it more likely to fall back down?

As always, nobody knows for sure. We can only make educated predictions based on fundamental and technical analysis.

On a technical basis, it is obvious that 1.50 is likely to act as a strong resistance level in the near term.

A new high of 1.4971 was achieved on Wednesday, and many traders will be looking to see how the price reacts if it gets close to 1.50 once again this week or later this month.

Oscillating Indicators Point to a Possible Pullback

With such a sustained price rise, it is natural to assume that the traditional oscillating indicators that indicate whether a particular currency pair is overbought or oversold will show that the USD/JPY is overbought, and that’s exactly right in this case.

As you can see from the daily chart below, the RSI is very close to the 70 line and the stochastics indicator is well over above the overbought level of 80, suggesting that the USD/JPY is potentially overbought up here.

The weekly chart is even more emphatic because the RSI has just crossed above the 70 level on this timeframe, and the stochastic indicator is also well above the 80 level here as well.

Of course these are no guarantees that the USD/JPY will reverse. In fact it is extremely dangerous to take big positions based on RSI and stochastics indicators being overbought or oversold.

However they do form part of the overall picture, and when you consider that the price is trading close to the upper Bollinger bands in both of these timeframes, the odds do slightly favour a near term reversal at least.

No Key Levels if the Price Breaks Above 1.50

One problem that you have when a pair is hitting new highs is that you have no previous levels to work from if the price is making a new all-time high, or have to use very old levels from months or years ago in many cases, as is the case here.

The USD/JPY last traded over the key 1.50 level back in October 2022 for a very short period, and didn’t actually close above it, so you can’t even draw a level of resistance from the closing price. All you have is the monthly high of 1.5194 to work with.

So if the oscillating indicators are wrong and the price continues to make new highs above 1.50, it is running into clear air on the chart and could have a strong move up to 1.53, 1.54 or 1.55 in the coming months as there are no sellers above from previous levels, and the dollar is fundamentally strong thanks to the potential of one or two additional interest rate rises.

Final Thoughts

The USD/JPY is clearing running into a key level of 1.50 right now, and I personally think that it’s a difficult one to call because although the price looks technically overbought on both the daily and weekly chart, the fundamentals of the dollar are strong with the Fed already hinting that there may be one more interest rate rises this year.

So this is definitely a case of wait and see. Any hint of selling / profit taking could take the price down to 1.465 fairly quickly, which is around the level of the 50-day moving average, and possibly even a test of the 200-day moving average nearer to 1.40.

However if 1.50 offers little resistance and there is little selling around this level, there is definitely the potential for the price to break through 1.50 and clear the previous October 2022 high of 1.5194 because this is a fairly weak resistance level.