How did I first hear about AvaTrade?
I came across an advertisement on a billboard in London and was sure I had heard the name before so thought I’d check them out.
What was my first impression of them as a broker?
I was under the assumption that they are a well established broker for over 10 years, and could not recall any negative press about which really adds weight to my completely open and optimistic view on them from the get-go.
How easy is it to navigate the broker website?
The website itself is not particularly exciting or enticing, but it does the job- all the information you need is displayed clearly and there is a handy FAQ page with a search feature to be able to pinpoint answers efficiently and with ease.
Do they offer a good variety of tradable assets?
Yes, with AvaTrade you have a variety of tradable assets to choose from: Forex, Stocks, Commodities, Indices, Options, Bonds, ETFs and Cryptocurrencies. This is an excellent banquet of assets to pick and choose from, and there is something for everyone.
Do they offer different account types and what are the benefits?
With AvaTrade you have limited options. However, should your residency be the United Kingdom, you have access to trading with variable spreads, however if you are not form the UK, you are only able to trade with fixed spreads. I did find this a little odd as it does not seem logical at all.
Frustratingly, account specs are not available on the website, but I spoke with a live chat agent who offered me a little more information. AvaTrade offer one ‘Standard’ account with fixed spreads (unless you are from the UK, you have access to variable spreads instead). With this account, you may choose to use the MT4 platform or the ‘AvaOptions’ platform which is their very own tailor-made platform. I asked what the differences are between the two in terms of trading conditions and was advised that there are none. This was interesting to hear as usually, the case would be that there are preferable spreads or commission charges on one of the two platform choices, but with AvaTrade, this is not the case. This is a breath of fresh air that the broker are seemingly not pushing their clients into one particular direction to select one platform over another for the benefit of the broker.
How competitive are their spreads?
On the whole, the spreads are not bad across the board for all assets. However, the issue I have is that unless you are a UK resident, you are confined to trading with fixed spreads, which can work very well in the brokers favour for the most part. On the flip side, some traders do not mind this, however, I feel this is a subtle, yet cunning way in which the broker is able to profit nicely off client losses, and very frequently.
If the fixed’ spreads shown on the website were reflective average floating spreads, I would not be so disappointed, however, the fact they are not variable does not sit so well with me; a floating spread to me, is fair and makes trading what it is. However, if you throw fixed spreads in the mix, I cannot help but think this is an element of gambling as the client has no control over the spread, but the operators do. Now of course, the spreads being fixed or floating does not wholly determine the trade results, it does contribute to the result.
What is the maximum leverage they offer?
Unfortunately, for all EU trader accounts, as a result of ESMA regulation, the leverage is capped as follows:
1:30 for major currency pairs
1:20 for non-major currency pairs, gold and major indices
1:10 for commodities other than gold and non-major equity indices
1:5 for individual equities and other reference values
1:2 for cryptocurrencies
If you have substantial amounts to deposit, you may then undergo some scrutiny to prove your wealth and be approved for a ‘professional’ trader account, where you will be granted more freedom with a maximum leverage of 1:400.
Although it cannot be helped, the EU leverage restrictions are not attractive to the majority and it is incredibly challenging to make great profits from such leverage if the average trader deposits the bare minimum requirement. Then, add in the mix fixed spreads, and you have yourself a whole lot of fight to make any sizable profits, even if you are a well experienced and successful trader; these trade conditions will hinder you.
What is their commission charge?
AvaTrade are generous in the sense that they do not charge a trade commission. This all sounds very lucrative for the trader however this does then lead me to question how the broker are making their money. This is obvious- since the spreads are marked up from the ‘average’ that a competitor would offer, and then fixed, the broker is making their profits via this method quite nicely.
Do they offer a deposit bonus?
For residents within the EU, AvaTrade is restricted from offering clients a bonus. However, if you are a resident outside the EU, you are entitled to a first time deposit bonus of up to 20%, should you make an initial deposit of $1,000 or more.
Clearly, the lure of getting a bonus of ‘up to 20 percent’ is a very good way to encourage clients to deposit large sums of money, as soon as they become a client. This is a one time offer as you register, so it is no wonder many people would fall for the trap and do not realise that the deposit cannot actually be withdrawn.
What do I need to open a verified account?
In order to open a live account with AvaTrade, one must submit a document proof of photographic ID such as a driver’s licence or passport, and the proof of residency document such as a utility bill or bank statement, must be dated within the last 6 months.
How long does it take to open a live account?
The verification and account approval process can take a maximum of 1 business day. I was impressed that my documents were verified and approved within 8 hours, so I could begin trading live the next day.
Do they have a minimum/ maximum deposit requirement?
Initially, you must deposit a minimum of 100 (EUR, AUD, GBP or USD. However, should you wish to take advantage of the one time only offer of the deposit bonus, one must deposit a sum of 1,000 or more.
One must also note that AUD deposits can only be made and accepted if you are an Australian resident, and likewise, only GBP deposits can be made by UK residents.
I think $100 or equivalent in alternative currencies is not unreasonable to start out with, and does give some berth for new traders, and a substantial chance to earn profit.
Are desktop/mobile/web trader versions all available?
Yes, AvaTrade must be given credit here for being innovative for ensuring they can provide compatible versions for both their MT4 and their very own platform called AvaOptions. Although I am dubious about brokers who offer their own platform, I feel at ease with this broker as they offer MT4 as well, and no difference between them- it almost comes down to the simple matter of whichever software the client prefers, aesthetically.
Which countries are restricted from trading with AvaTrade?
According to the live chat agent I spoke with, the only citizens restricted from trading with this broker are: USA, New Zealand and Iran.
What deposit and withdrawal methods are available?
To locate the answer to this question I decided to utilize their ‘knowledge base’, which has a handy search feature for efficient pinpointing of information, however I was disappointed to find information not directly relevant to the question ‘what withdrawal methods area available?’. Instead, I was presented with information regarding anti-money laundering policies meaning one must withdraw the first 200% to the same method they deposited with, before being able to use an alternative withdrawal method.
I had to seek the answer from their live chat and was advised that depending on the country you are from, methods available vary. I then proceeded to inquire about the methods available to UK clients and was shocked to be told that the live chat agent ‘did not know’.
I found it incredibly bizarre and also very off putting that nowhere on the website can you find this information prior to registering as a client, nor do the staff disclose such basic information. This is another little hook to push clients to sign up and find out later, once they have already committed to the live account.
Do they sell additional products/services/managed accounts?
AvaTrade do not sell signals or EAs however they do provide automated trading services, should you wish to take up that option. AvaTrade do not offer managed accounts however, they do offer ‘account managers’ for the clients that deposit over $1,000, which essentially, will be providing the same service as that of having a managed account.
Of course, should you opt for the MT4 trading platform, then you will be able to use third party software EAs etc, as normal.
If assistance is required, how can you get in touch?
I was disappointed to know that a broker of such calibre, who has been established for a long time, does not offer customer support 24/7. I think it always adds some peace of mind for the client knowing they are ale to speak to a representative at any moment.
Unfortunately, with AvaTrade, you may only receive (English speaking desk) assistance via live chat, email, or telephone during the hours of 9AM until 1AM GMT (Monday-Friday). For the non=english speaking, they also offer customer service in Spanish, French, Italian, Arabic, Russian, Portuguese and German between 11AM and 7PM GMT.
What is the quality of customer service?
Firstly, I was not impressed with the customer service availability, or lack of (not available 24/7) but I was not unimpressed with the quality of service, especially from live chat. I never had to wait more than 5 minutes to receive a response, and did not have to repeat myself in order to get a comprehensive response. Overall, the agents I spoke with were friendly and efficient, however there was one occasion where I did feel some defensive attitude needed to be reigned in, as I was only asking a simple question, and felt I had been responded to rather abrasively, and unnecessarily. You can see this in the below image:.
Do they offer an IB affiliate program?
The website states that they do offer an Affiliate programme, and the overview of it all seems incredibly attractive, but does not state the individual’s commission structure so i asked a live chat agent for further details on this, but was advised that I must send an email to their support department, which I did, and had to wait a further 48 business hours until I received a response, which was automated, and in fact i gained more information from the vague information displayed on the website itself:
What is my overall opinion of AvaTrade?
I feel rather neutral about this broker. Some aspects of their services I felt were amicable, and other elements really quite questionable. For example, at first glance, the fact that there is no difference in prices (instruments) between AvaOptions platform and MT4, their spreads are fixed (unless you are a UK client) and this allows the broker to make easy profits and regularly. Add in the fact they do not charge trade commissions means they naturally have to mark up their spreads, then fix them. The idea of fixed spreads, no trade commissions yet low leverage, (unless you deposit over $1,000 and trade with 1:400 leverage) seems lucrative for the client, but this is just a sugar coated way in which the broker have captivated their audience into thinking they are being sold a more than agreeable service overall.
The fact they offer a deposit bonus made me very dubious, as we all know that this is another clever ploy to lure people in to deposit large sums right from the very beginning of their trading experience with this broker, and even then, 9/10 chances they will never actually see the deposit bonus sum in their own account, able to be withdrawn.
I do like the fact they offer MT4 and all compatible versions as well, so for those that prefer to trade with fixed spreads on certain assets, this could work well, should you have sufficient experience and strong strategies.
I would be comfortable to recommend this broker as an all round decent broker, but only to those that truly understand the reasons behind the 0 commissions, and marked up fixed spreads, as this will really impact one’s trades. Without this knowledge, and falling for the deposit bonus trap, i feel a lot of money could be lost, and fast. If you are new to the Forex space, I would highly recommend trying out the demo first until consistent profits have been made, before moving on to the live account, so you properly gauge out these types of trading conditions in respect of your trading style.