AvaTrade, an international CFD broker since 2006, initially debuted as AvaFX. It has garnered significant popularity, boasting over 400,000 + clients. Operating as a regulated broker in seven countries, including Ireland, Australia, and Japan, AvaTrade offers a user-friendly platform with competitive spreads.
I want to share my insights based on my experience using AvaTrade. I’ve personally tested and used their system with my own account. On top of that, I hold the EFPA (European Financial Advisor #37363) certification. Let me share my findings with you.
Josep GarciaFinancial Advisor
However, several questions remain crucial for you to know if it’s a good option. For example, what is the range of financial instruments available, are there any hidden fees, and can you trust this trading platform.
Note: Bear in mind that any investment comes with a risk of losing your capital and that when you trade in derivatives such as CFDs, which are more complex and use leverage, that risk is increased. 76% of retail investor accounts lose money when trading CFDs with AvaTrade; before you start, it’s important to understand how these trades work.
AvaTrade Review Verdict
AvaTrade caters to investors focused solely on derivatives, including CFDs and Forex options. For purchasing stocks, ETFs, or cryptocurrencies, consider alternatives such as Trading 212, eToro, or Interactive Brokers. Also, note that AvaTrade may not have the widest variety of CFDs compared to other platforms.
The Pros & Cons of AvaTrade
Pros
Opening an Account
Account opening is quick, easy, and fully online.
Economic Calendar
The economic calendar is impressive, one of the best I’ve used. It alerts you to economic and financial events impacting transactions, like new UK unemployment data.
Easy to use
The AvaTrade platform is intuitive but lacks some features – details below.
Trading Calculator
A trading calculator is available to determine trading costs (spread) for specific instruments.
Regulation
AvaTrade is regulated in trustworthy countries like Ireland, Australia, and Japan.
Cons
Assets on Offer
Although AvaTrade provides a variety of CFDs and currency pairs, platforms like Trading 212, DEGIRO and XTB may offer a broader range. Additionally, AvaTrade doesn’t facilitate investments in non-derivative assets such as ETFs or stocks.
Inactivity Fee
The steep inactivity fees charged by AvaTrade after just three months are a significant drawback for me.
Charts
AvaTrade’s chart analysis system falls short of expectations, lacking features such as price comparisons with other assets and indices, and the ability to make annotations.
Non-Guaranteed Stop-Loss
Setting a stop-loss order in AvaTrade to automatically close positions at a certain price is possible, but it’s not guaranteed during high volatility periods, which is common among similar brokers.
AvaTrade In Detail
Is AvaTrade Secure?
AvaTrade goes to great lengths to ensure a secure platform where your investments are protected against theft or hacking by cybercriminals. For instance, it employs SSL encryption and implements several security protocols, including McAfee Secure, which, although its specifics are unclear, enhances overall security.
That said, I would prefer the implementation of two-step authentication, similar to what DEGIRO or eToro offer. This process would involve AvaTrade requesting identity confirmation via a verification code sent to your mobile, akin to many banking apps. Such a feature would add an extra layer of security to your account, which, regrettably, is not currently available.
Who Regulates AvaTrade?
If you have concerns about AvaTrade’s legitimacy, rest assured it is regulated in several reputable countries, with multiple regulatory bodies overseeing its activities.
AvaTrade is regulated by the following authorities:
- Central Bank of Ireland, adhering to rules set by EU guidelines
- Financial Services Agency of Japan
- Australian Securities and Investments Commission
- Investment Industry Regulatory Organisation of Canada
- British Virgin Islands Financial Services Commission
- Abu Dhabi Global Market’s Financial Regulatory Services Authority
* Note: It’s all very nice that they comply with this regulation, but it’s one of those places that are considered tax havens, so I imagine it’s not the strictest of standards for them to follow.
AvaTrade Fees
Before starting to trade derivatives with AvaTrade, it’s important to consider the associated fees.
AvaTrade Non-Trading Fees
I like it that AvaTrade doesn’t charge any fees for the following:
- Creating your account
- Deposits made from within the platform
- Withdrawals of funds
However, AvaTrade imposes a significant inactivity fee for dormant accounts. Note that this fee is applied if you do not make a trade for three months, and accumulates an additional $50 every subsequent three-month period. It’s important to be mindful of this when you register.
AvaTrade Trading Fees
AvaTrade charges what are effectively spreads, not traditional fees, when you make a trade.
AvaTrade uses a spread system, offering one price for selling and another for buying. This spread, integrated into the transaction cost, is AvaTrade’s primary means of revenue.
Example of AvaTrade Fees:
Below is a comparison of AvaTrade’s fees across various products to illustrate the spreads, these are examples and may not be the most recent ones.
| AvaTrade Margin | AvaTrade Daily Swap Points | |
|---|---|---|
| GBP/USD | 1.6 | -0.0049% (long)
-0.0047% (short) |
| DJ30 | 3.00 over market | -0.0058% (long)
-0.0058% (short) |
| FTSE100 | 0.50 over market | -0.0058% (long)
-0.0058% (short) |
| Crude oil | 0.03 | -0.0053% (long)
-0.0053% (short) |
| Gold | 0.28 | -0.0053% (long)
-0.0053% (short) |
| Apple | 0.13% | -0.0166% (long)
-0.0111% (short) |
| Barclays | 0.16% | -0.0166% (long)
-0.0111% (short) |
| Learn more | www.AvaTrade.com | |
Bear in mind that the fees fluctuate; the table above refers to the fees as of 24 January 2023.
Available Products & Markets
The bottom line is, AvaTrade limits investment options to a narrow range of financial products. Essentially, it only offers investment opportunities in derivatives. Therefore, for investments in stocks, investment funds, ETFs, or cryptocurrencies, seeking an alternative platform would be advisable.
On the other hand, it can serve as your entry point into the world of trading through CFDs (contracts for difference). These products are ideal for short-term speculation due to their low trading cost, specifically the spread, as mentioned earlier.
When dealing with financial derivative products, such as a CFD on Apple shares, it’s crucial to recognize that you are not purchasing the actual Apple shares. Instead, you are investing in a derivative product, the price of which is tied to the actual share price. These are typically riskier investments.
These are the types of CFDs in which AvaTrade allows you to invest:
- CFDs on Forex: For those interested in Forex trading, AvaTrade offers a solid selection of the most traded currency pairs, including EUR/USD, EUR/GBP, and others. The platform provides access to just over 55 currency pairs for trading.
- CFDs on stocks: AvaTrade provides CFDs on approximately 700 different stocks from multiple markets, including the US and Europe. However, it’s important to note that competitors such as XTB and eToro offer a broader selection.
- CFDs on ETFs: These products are highly favoured by investors for pooling numerous assets into one; certain ETFs encompass thousands of instruments. However, with only 60 CFDs on ETFs available, AvaTrade doesn’t have the most extensive portfolio in this category.
- CFDs on commodities: If you want to invest in derivatives of products like gold, oil, cocoa, or even copper, AvaTrade offers you the opportunity. Its portfolio comprises approximately 30 different commodities.
- CFDs on indices: Another highly popular short-term investment strategy involves trading entire indices, such as the S&P 500 or the DAX 30. While AvaTrade does provide access to some ‘exotic’ indices, like the Cannabis Index, it’s worth noting that they offer fewer than 25 of them. This might not meet the requirements of all investors.
- CFDs on Cryptocurrencies: Please note that if you wish to purchase real cryptocurrencies, AvaTrade does not provide this option. They exclusively offer CFD trading. For actual cryptocurrency purchases, consider using eToro. AvaTrade offers CFDs on a selection of 14 cryptocurrencies.
- CFDs on bonds: AvaTrade has only 2 CFDs on bonds (fixed interest): one is on European bonds and the other on Japanese bonds.
How Does AvaTrade Work?
AvaTrade offers two account types: retail investor accounts and professional investor accounts.
The key difference is higher risk trade access for professional traders, including increased leverage levels. Professional investor accounts may not be available in all countries.
You should also be aware that there are several ways to invest using different platforms:
- AvaTrade Web Trader: AvaTrade’s web interface for trading derivatives via modern browsers like Chrome, Safari, or Firefox. Well-designed and fairly intuitive, but lacks some features, such as advanced chart analysis.
- Android and iOS: Smartphone-compatible platform available on Android and iOS. I, personally, find navigating investment platforms on a phone quite awkward.
- External platforms: Third-party platforms connecting to AvaTrade’s services, like MetaTrader 4 or MetaTrader 5. These aren’t the most intuitive, and beginners will struggle to get around.
- Unlike many brokers, AvaTrade does allow you to trade Forex options. However, it requires a specific account.
AvaTrade Alternatives
It is very likely that you aren’t convinced that AvaTrade is your best option to invest your money with. If so, I’ve curated a list of alternatives that may be useful for you.
Trading 212
Investors looking to trade real stocks or ETFs may find a wide variety of assets available on Trading 212. You can invest in shares and ETFs from North America, Europe, etc. However, please note that Trading 212 does not offer Options trading, and its services are primarily available to users residing in EU countries (such as Germany, The Netherlands, France, or Spain) and to investors located in the UK and Switzerland.
Visit Trading 212XTB
XTB aims to provide a combination of investments in stocks, ETFs, and CFDs. This European-based online broker enables users from several countries to open accounts, including Spain, Brazil, Portugal, France, the UK, and Argentina. However, it’s important to note that XTB is not available for customers in the United States. Additionally, it’s worth noting that while XTB offers a wide range of assets, their selection may not be as extensive as that of platforms like eToro or Trading 212.
Visit XTBeToro
eToro is one of the world’s largest investment platforms, and you’ve probably come across their online ads. This broker enables users to invest in real ETFs and stocks (only fractional investments), as well as trade CFDs in commodities, forex, and stocks. They also offer a crypto exchange for buying and selling digital currencies. Plus, even US-based users can open an account with this popular trading platform.
Visit eToroAvaTrade Review: Parting Thoughts
After reviewing AvaTrade in-depth and providing my insights, you should now have a clear idea of whether this is a suitable option for you. Before concluding, I’d like to remind you of a few AvaTrade key aspects.
AvaTrade is a decent choice, exclusively, if you plan to trade in CFDs (derivatives). It does not offer the option to invest in stocks, ETFs, or other financial products. If you’re interested in those, consider exploring XTB or Trading 212.
While its web platform is user-friendly, it may not be the most comprehensive available. Additionally, AvaTrade’s CFD portfolio isn’t the most diverse. Platforms like eToro and XTB provide a wider range of options.
Although it’s not regulated by the UK’s FCA, AvaTrade maintains offices and is regulated in reputable countries, including Ireland and Australia.
In conclusion, I hope this article has addressed some of your questions. If you have any additional concerns or queries about AvaTrade or its alternatives, please feel free to leave a comment, and I’ll do my best to help out.
Learn moreAvaTrade FAQ
AvaTrade is an Irish CFD Forex broker regulated by the Central Bank of Ireland (among other countries, including Cyprus and Australia). AvaTrade allows its users to trade CFDs (derivatives) of stocks, bonds, ETFs, commodities, Forex, and indices.
The platform is intuitive and user-friendly, but it could provide additional features for technical analysis and charting. Please note that there is an inactivity fee if you don’t use the broker for an extended period.
AvaTrade is located in Ireland (Dublin), although its parent company is located in the British Virgin Islands; interesting location, right?
On top of Ireland, AvaTrade has offices in Spain, Japan, Australia, France, Italy, China and Mongolia – this is partly explained because AvaTrade has acquired some brokers in the past like ArtCo (Japan) or YouTradeFX (Australia).
AvaTrade is a rightly established company. It’s authorised and regulated by several reputable regulatory bodies, such as the Central Bank of Ireland, the Australian Securities and Investments Commission (ASIC), and the Financial Sector Conduct Authority (FSCA) in South Africa. So yes, it’s not a scam, although that doesn’t mean it’s risk-free.
Regulated brokers like AvaTrade are required to follow strict rules to make sure the clients’ funds are safe (e.g. not mixed with the company’s assets). However, AvaTrade is a CFD provider, this comes with a lot of risk, so please make sure to understand this.
AvaTrade is an international company headquartered in Dublin, Ireland. It was founded in 2006 and since then, it has grown and expanded globally. Although AvaTrade is a privately owned company, hence the structure of its ownership is not public. However, the company was founded by Emanuel Kronitz and Negev Nosatzki.
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