Broker editor picks: eToro for CFDs and DEGIRO for shares and ETFs.

The pros, cons, and fees of AvaTrade

Josep Garcia

17 August, 2021

AvaTrade

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AvaTrade is an international CFD broker that has been around since 2006, although it was originally launched under the brand name AvaFX. It’s fair to say that AvaTrade has already attained a degree of popularity, as it has more than 300,000.

It claims to operate as a regulated broker in seven different countries, including Ireland, Australia, Japan, and a few others. It promises a user-friendly platform and it seems to offer competitive spreads (fees).

AvaTrade Broker Review

But, of course, there are many questions that need answers before you can determine whether AvaTrade is a good option for you. For instance, which financial instruments am I able to trade, are there any hidden fees, is it a scam?, etc.

In order to answer all these questions, I prepared this review of AvaTrade and I’ll tell you all you need to know about this trading platform.

Shall we begin?

AvaTrade review: the short version

AvaTrade is a regulated broker in several (reputable) countries, including Ireland, Australia, and Japan. It’s a platform that trades exclusively in derivatives (CFDs and Forex options) – which means it’s only suitable for derivatives traders – and the leverage cannot be changed.

Alternatively, if you don’t want to trade in derivatives and/or are looking for a platform on which to invest without leverage, you may want to consider eToro or DEGIRO.

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. 72% of retail investor accounts lose money when trading CFDs with AvaTrade; before you start, it’s important to understand how these trades work.

The pros and cons of AvaTrade

Before I explain all the features offered by AvaTrade, I want to tell you about its advantages and drawbacks, and about who might benefit from opening an account with AvaTrade.

avatrade economical calendar

The pros of AvaTrade

  • Opening an account: Opening an account is quick and easy. And the process is completely online.
  • Economic calendar: I’m a huge fan of its economic calendar; it is actually one of the best I have ever tried. It will remind you of upcoming economic and financial events that may affect your transactions (e.g. new UK unemployment data).
  • Easy to use: I find the AvaTrade platform intuitive and easy to use. It does, however, lack a few options – read below.
  • Trading calculator: It has a trading calculator that you can use to find out how much it will cost (in terms of spread) to trade a particular instrument.
  • Apps: Its iOS and Android apps are well-designed. That said, I myself am not a big fan of trading on my phone; I prefer larger screens.
  • Regulation: It’s regulated in a number of countries that, theoretically, can be trusted (e.g. Ireland, Australia, Japan).

The cons of AvaTrade:

  • Assets on offer: While there are plenty of CFDs and currency pairs that you can trade, I feel that other platforms, such as DEGIRO or XTB offer far more. Also, you won’t be able to invest in other (non-derivative) assets, like ETFs or stocks.
  • Inactivity fee: I don’t like the fact that AvaTrade starts charging very steep inactivity fees after only three months.
  • Charts: The chart analysis system isn’t the best I’ve ever seen; it’s missing some options, like being able to compare prices against other assets and indices, and it would also be nice to be allowed to make annotations.
  • Non-guaranteed stop-loss: It’s possible to set a stop-loss order when opening a position so that it closes automatically if a certain price is crossed, but that price is not guaranteed if, for example, there is a lot of volatility at the time. This is fairly typical with these types of brokers.

Who should be using AvaTrade?

AvaTrade is a broker for investors who intend to invest exclusively in derivatives such as CFDs and Forex options. If you want to buy stocks, ETFs, or even cryptocurrency, there are better alternatives out there, like DEGIRO, eToro, or Interactive Brokers.

72% of retail investor accounts lose money when trading CFDs with AvaTrade; before you start, it’s important to understand how these trades work.

AvaTrade in detail

Criteria Comment
Country and regulation
Ireland, Australia, South Africa, Japan, etc.
AvaTrade is regulated in several continents, as it has entities in: Ireland, Australia, South Africa, Japan, United Arab Emirates, and British Virgin Islands. Sadly, it’s not regulated within some countries like the UK or the US.

AvaTrade will take pretty much almost every client from every country. Some exceptions are the US, Iran, and Belgium.

Deposits









It’s possible to add funds to your AvaTrade account via credit and debit card and wire transfer. There’s a minimum deposit required of 100 € (or equivalent local currency).

AvaTrade accounts can be in euros, US and Australian dollars, or British pound sterling; this will depend on where you are located.

Demo account









There’s also a demo account which is limited to 21 days, but it seems like you can extend that period if you contact the support team, or at least that’s what it says on the website. You’ll have a virtual balance of $/£/€100K with which to test the platform without risking your own money.
Products & trading
Stocks It’s not possible to trade real stocks, as AvaTrade is a CFD broker.
ETFs & Funds It’s also not possible to buy ETFs or other investment funds with AvaTrade. You’ll only be able to trade in CFDs (derivatives) of such products.
Forex It is possible to trade Forex with AvaTrade. You’ll be able to find about fifty currency pairs. This, of course, includes the most popular ones, like EUR/GBP, GBP/USD, EUR/USD, EUR/JPY, and EUR/AUD.
CFDs You’ll find CFDs on stocks (about 700 CFDs in various markets, including the British, European, and American markets), cryptocurrencies (14 CFDs on Bitcoin, Etherum, etc.), major indices (about 30 CFDs), commodities (about 30 CFDs, including on gold, crude oil, and copper), CDFs on European and Japanese bond, and some 60 on ETFs. There are other alternatives with more instruments on offer, such as XTB or eToro.
Cryptos It’s not possible to buy cryptocurrencies directly with AvaTrade. What is possible is to buy CFDs on cryptocurrencies.
Other products It’s possible to trade in Forex options.
Types of orders









With AvaTrade, it’s possible to trade using market orders, limit orders, stop-loss orders, and take-profit orders.

Please note that the orders are not guaranteed (e.g. stop-loss orders). For instance, if there is volatility in the market, the order will be executed at the next available price.

Leverage









Different countries allow for different leverage levels; therefore, depending on where you are based, you’ll have more or less leverage. Additionally, different instruments come with different leverage levels; for instance, in the UK, we can find leverages between 2:1 (for crypto CFDs) and all the way up to 30:1 (for Forex CFDs). Sadly, unlike with other CFD traders (e.g. eToro), you can’t reduce the leverage for your trades.
Fees
Trading AvaTrade charges a spread between the bid price and the ask price; this spread is how most trading platforms make their money. The spread will change based on the type of CFD being traded. For instance, the spreads for CFDs on stocks are higher (more expensive) than those on ETFs.
Overnight fees If you have any open positions at the end of the day (10 PM GMT), AvaTrade will charge a small amount of interest on those positions. Please bear in mind, however, that this interest is charged on a daily basis and can rise quickly. For instance, the daily interest is -0.0058% for positions on indices, -0.0053% on commodities, and -0.0111% on stocks.
Inactivity fees If you don’t use AvaTrade for 3 months, you will have to pay a fee of $/£/€50. This fee will recur every 3 months that you don’t use the platform. And after 12 months of non-use, AvaTrade will charge what it calls an ‘administration fee’ of $/£/€100.
Other fees There doesn’t seem to be any other fees.
Platform features
Available platforms









AvaTrade provides a basic online broker with which you can trade online, using your browser. You can also trade with popular (third-party) applications MetaTrader 4 and MetaTrader 5. Please note that these have to be installed on your computer.

It also has apps for Android and iOS smartphones and tablets from which you can trade, and they actually look pretty good. On Google Play and on the Apple App Store, the AvaTrade app has a rating of around 4.5.

Charting









AvaTrade will allow you to play around with the charts a little bit, but the truth is that other platforms – like XTB or Plus500 – provide more options. With AvaTrade, for example, there’s no way to compare prices with other instruments or indices.

On AvaTrade, you can choose between candlestick, bar, or linear charts. The timescale of the charts can go from one month to one minute. You have the choice to overlay some 50 different analyses on any chart, including Bollinger Bands and the Aroon indicator.

Research









It doesn’t have its own system to provide news alerts that are relevant to users’ investments. It does, however, have an economic calendar available which can be useful for you to anticipate major economic and financial events. It’s quite good.
Education and guides









AvaTrade provides a number of detailed articles explaining how the platform works. It also has an education section with many (mini) tutorials that explain the basics of trading. The effort they’ve made to create educational videos is appreciated.
Alerts









Here, there isn’t a whole lot of flexibility; you can’t get price alerts or anything like that using the online trader. If you install the app, you can set up push notifications to be sent to your phone.
Support









It’s possible to contact AvaTrade via phone or chat (which isn’t always available). You can also leave a message using the contact form. Bear in mind that there’s no support during the weekend.
Overall rating









AvaTrade is a solid broker that is regulated in a lot of countries. In my opinion, the main drawbacks of AvaTrade are the excessive inactivity fees and the fact that it does not offer as many products and assets as other providers, such as DEGIRO, XTB, and eToro.

Is AvaTrade secure?

AvaTrade does go to great lengths to have a secure platform on which your investments are not at risk of being stolen/hacked by cybercriminals. For instance, it uses SSL encryption and has several security protocols in place, including McAfee Secure – not sure what this last one is, but sounds good.

That said, I’d prefer having two-step authentication – like DEGIRO or eToro offer. With that process, AvaTrade would ask you to confirm your identity with a verification code sent to your mobile, as is done by many banking apps. This would provide an extra layer of security to your account. Regrettably, it’s not available.

Who regulates AvaTrade?

If you are afraid that AvaTrade might be a scam, rest assured that it is regulated in a number of (reputable) countries, with many regulatory bodies supervising its activities.

AvaTrade regulation

AvaTrade is subject to the following regulators:

  1. Central Bank of Ireland (this means that AvaTrade must follow its rules, which are in turn determined by EU guidelines);
  2. Financial Services Agency of Japan;
  3. Australian Securities and Investments Commission;
  4. Investment Industry Regulatory Organisation of Canada;
  5. British Virgin Islands Financial Services Commission *
  6. Abu Dhabi Global Markets’ 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 and commissions

Before you take the plunge and start trading with AvaTrade, you may want to bear in mind the fees you will have to pay to trade derivatives.

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 will charge a hefty inactivity fee if you don’t use your account. Bear in mind that this fee will kick in after you haven’t made a trade in three months, and it will continue to pile $/£/€50 on top of $/£/€50 every 3 months. Just be aware of it when you sign up.

AvaTrade trading fees

There are the fees charged by AvaTrade when you make a trade – which aren’t exactly fees, but rather spreads.

AvaTrade Fees

What AvaTrade does with these spreads is it offers one price if you’re selling and a different one if you’re buying. This spread, which is already built into the transaction cost, is how AvaTrade and other market makers finance themselves.

AvaTrade fees example:

To give you an example, let me compare the fees charged by AvaTrade for several different products, so you get an idea of the spreads.

XTB Margin XTB 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 2021.

Products that you can trade with AvaTrade

The bottom line is that AvaTrade doesn’t allow you to invest in many different types of financial products. It’s really only possible to invest in derivatives. So, if you want to invest in stocks, investment funds, ETFs, or cryptocurrencies, it’s best you look for an alternative.

On the other hand, it can be your gateway into the world of trading via CFDs (contracts for difference). This type of product is suitable for short-term speculation, as the trading cost (the spread that I mentioned earlier) is low.

As these are financial derivative products, it’s important to understand that when you buy into a position – for example, a CFD on Apple shares – you are not buying actual Apple shares; you are investing in a (derivative) product whose price is linked to the price of the actual Apple shares.

Avatrade available instruments

These are the types of CFDs in which AvaTrade allows you to invest:

  • CFDs on Forex: If you want to invest in Forex, AvaTrade has a good selection of the most common currency pairs (EUR/USD, EUR/GBP, etc.). It offers just over 55 currency pairs on which to trade.
  • CFDs on stocks: AvaTrade offers CFDs on around 700 different stocks from various markets (US, Europe, etc.). But it is worth noting that some competitors, like XTB and eToro, do offer a wider selection.
  • CFDs on ETFs: This type of product is also very popular with investors to pool a large number of assets into a single product; some ETFs can represent thousands of instruments. With a mere 60 CFDs on ETFs on offer, AvaTrade is also not the broker with the best portfolio of this type of CFD.
  • CFDs on commodities: If you want to invest in derivatives on products such as gold, oil, cocoa, or even copper, you can do it with AvaTrade. Its portfolio includes around 30 commodities.
  • CFDs on indices: Another very popular short-term investment is to trade on entire indices, such as the S&P 500 or the DAX 30. Although AvaTrade offers some interesting indices (e.g. the Cannabis Index), the fact is that it has less than 25 of them on offer, which may not be enough for some.
  • CFDs on Cryptocurrencies: Let me remind you that if you want to buy actual cryptocurrencies, you won’t be able to do so with AvaTrade, as it only trades on CFDs; take a look at eToro for that. AvaTrade supports CFDs on 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?

With AvaTrade, there are only two types of accounts: retail investor accounts and professional investor accounts.

The main difference between these two types of accounts is that if you are a professional trader, you will have access to higher risk trades; e.g. the leverage levels are increased. Please bear in mind that these 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 Platform

AvaTrade web platform

  • AvaTrade Web Trader: This is AvaTrade’s own web interface, with which you can trade derivatives using any modern browser, like Chrome, Safari or Firefox. It’s a well-designed and more or less intuitive platform, but I think it’s missing some features, e.g. for chart analysis.
  • Android and iOS: AvaTrade has its own version of the platform in app format, developed for smartphones.
  • You can opt for using MetaTrader 4 or MetaTrader 5. These are third-party platforms that allow you to connect to AvaTrade’s trading services. They’re very popular with this type of broker, but they can be a little difficult to navigate if you’re not used to them; they aren’t very intuitive and look a little dated.
  • Not all brokers offer options trading, but AvaTrade does allow you to trade on Forex options. This requires a special account and you’ll need to use AvaTrade’s options trading platform.

AvaTrade Review: parting thoughts

Now that I’ve reviewed AvaTrade in depth and given you my review, you should have a clear idea on whether or not this is a good option for you. But before I finish, I wanted to remind you of a couple of things about this trading platform.

It is a good option only if you intend to invest in CFDs (derivatives); it does not allow you to invest in stocks, ETFs or other financial products. If you’re interested in that, take a look at DEGIRO or Interactive Brokers.

Its web platform is easy to use, even if it’s not the most complete out there. Nor does it have the most diverse portfolio of CFDs; platforms such as eToro or XTB will offer you more options.

Despite not being regulated by the UK’s FCA, AvaTrade has offices and is regulated within reputable countries (e.g. including Ireland and Australia).

Okay, I hope this article has helped answer some of your questions, but leave a comment if you have any others concerns and I’ll try to answer them.

 

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. 72% of retail investor accounts lose money when trading CFDs with AvaTrade; before you start, it’s important to understand how these trades work.

 

Review updates:

10 Jul 2021 – Moved to upskillwise.comn

26 Apr 2021 – Affiliate disclosure added

16 Mar 2021 – Initial review

Josep Garcia

I am Josep Garcia, I live and work in Barcelona. I have a fulfilling 9 to 5 job as a digital marketer, but I also have several side gigs I enjoy working on. When I decided to launch my own website (in 2016) I took on the challenge of learning how to program, as I wanted my site coded from scratch. I have to say that finding online educational resources (I used Lynda at the time) was a blessing.
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