CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 71% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Originally founded as AvaFX in 2006, AvaTrade offers average-to-competitive spreads and a broad variety of tradable instruments through its Ireland domicile and multiple satellite offices, with financial registration across six jurisdictions on five continents.
Novice traders can open accounts for as little as $100 while the broker’s commitment to education should get them up to speed quickly. A dedicated educational and research site has grown in the last year, now offering a broader variety of free courses, videos and market analysis.
Since our last review, the broker has reduced the number of trading platforms while adding a professional designation to bypass ESMA leverage restrictions. Some of these changes are poorly documented, raising potential confusion when prospective clients are looking at account types, spread schedules, and fee listings.
Full slate of forex, CFD, cryptocurrency offerings
Unique social trading features
Impressive educational offerings
Trading platforms lack news and research functionality
Clients have account protection up to EUR 20,000 through Ireland’s Investor Compensation Company (ICCL) but the broker provides no additional insurance. They offer negative balance protection, now mandated under EU financial regulations. Desktop, web, and mobile platforms utilize no second-factor authentication but account holders can use Metatrader’s One Time Passwords (OTP). The company holds client funds in a segregated account but runs a dealing desk that makes markets against clients, raising the potential for conflicts of interest. A large Australian operation is regulated through the Australian Securities and Investment Commission (ASIC).
The broad variety of trading platforms noted in our 2018 review no longer holds true due to the removal of RoboX and Mirror Trader social trading programs and AvaTradeAct, their dedicated platform and Metatrader alternative. As a result, clients executing traditional technical or fundamental trading strategies now have little choice but to use Metatrader 4 and its aging feature set. It’s instructive to note that many EU competitors have added a Metatrader 5 option in the last year but AvaTrade has announced no plans to offer the more up-to-date platform.
Traders can take spot and options positions through AvaOptions, a dedicated but basic platform that provides plain vanilla and complex hedging with streaming put and call quotes for a subset of forex pairs, as well as a diverse set of strike prices and expiration dates. The two remaining social and copy trading platforms, ZuluTrade and DupliTrade, include most of the features offered by the discontinued programs.
Metatrader and AvaOptions web versions provide integration with desktop platforms but AvaTradeAct for the web is no longer available. AvaTradeGO, featuring AvaProtect, released in November 2017, now offers an Android and iOS alternative to the plain vanilla Metatrader 4 Mobile.
The rebranded and updated MT4-based app includes enhanced social trading capacity but a limited feature set that’s generated dozens of complaints on Google Play. The app is also geared toward newer and less skilled traders, providing “step-by-step guidance on opening trades” and a feedback system that experienced traders aren’t likely to use.
AvaTrade provides an economic calendar and limited research through sharptrader.com. A brief (2 to 4-minutes) daily Trader’s TV video (via YouTube) comprises the core of research materials, with the script then transcribed as a Daily Market Review.
AutoChartist intra-day updates list short-term technical signals while a fundamental analysis section included a few links to daily reports but just four other stale, dated articles. A more current feature article section lists six broad brush reports on topics that included tariffs, Brexit, and Bitcoin.
Trading courses and other educational materials are offered through sharptrader.com as well. Well-organized tutorials are segmented into beginner, intermediate, and advanced topics, offering logical paths to skill building. A broad variety of general articles covered all sorts of market topics as well as tutorials on trading platforms.
Materials were segmented into five major sub-topics, allowing clients to find answers quickly and efficiently. A buggy search function detracted from the learning experience, failing to include many articles and topics. And inexplicably, the main broker site includes an education sub-menu and a variety of useful materials not integrated into the dedicated site.
The broker now provides a pathway to a professional designation that permits much higher leverage under new ESMA rules. However, few retail customers will qualify for those benefits, which require financial industry experience and a large trading account. They also offer fixed and floating spread accounts as well as an Islamic account that will incur wider spreads.
Customers can access third-party platforms for copy and social trading while the AutoChartist plug-in for Metatrader adds technical functionality. This option requires at least $500 in the account, locking out very small traders.
The list of forex, CFD and options trading instruments is impressive while the addition of 8 cryptocurrencies provides new opportunities for high-risk speculators. CFDs include a basic selection of commodities and bonds as well as 69 shares and 5 ETFs, dominated by highly liquid US big tech stocks. UK and Ireland traders can open spread betting accounts as well, rounding out a full-featured investment product catalog.
Commissions and Fees
The broker touts no commission trading and ultra-low spreads but that may be inaccurate, depending on account type. A single page lists spreads for all tradable instruments as well as overnight interest calculations, maturity rollover fees, and inactivity fees.
Retail traders are charged higher spreads than professional traders but few clients will obtain that designation. The marketing page only lists fixed spreads, with no documentation on floating spread minimums or averages. That information was buried within the FAQ, adding confusion about account types and relative costs. No documentation was provided on actual spreads for Islamic accounts.
A legal document review found some discrepancies on spread and fee disclosures that included hidden withdrawal fees and a provision to charge commissions on some account types, although those types were not disclosed. These omissions could be remedied with more detailed information about account types, especially fixed vs floating, as well as side-by-side account comparisons.
It takes just $100 to open an account and AvaTrade offers no volume discounts or guaranteed stop losses. They charge a $50 fee after three months of account inactivity and a $100 administration fee after one year of inactivity. As mentioned, no withdrawal or closure fees are listed in the marketing materials but the legal documents noted fees for bank transfers and credit card transactions. Withdrawal processing can be unusually slow, requiring as long as 10 business days to receive wire transfers.
A comprehensive FAQ will address most inquiries. The broker offers 24/5 chat/phone support as well as social media portals and an online form entry. Connecting with chat may be cumbersome, with three requests at different times of day answered by a live representative within 8 minutes.
The broker maintains international offices, allowing customers local contact when needed. They provide an international phone number as well as a laundry list of local phone numbers covering their numerous jurisdictions and EU member states.
What You Need to Know
AvaTrade offers average-to-competitive spreads, depending on account type, and excellent educational resources. Along with low account minimums, they’re a sound choice for new and undercapitalized traders seeking to build limited skill sets. However, large-scale and professional traders are likely to find better value elsewhere due to the lack of volume discounts, high-end trading platforms, and comprehensive news and research.
Investors seeking a wide variety of forex, CFD, and cryptocurrency offerings may find what they are looking for with Avatrade. See how they compare against other online brokers we reviewed.
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