This Forex broker comparison features eToro, a Forex broker heavily focused on social trading that was founded in 2007 and currently boasts over 3 million traders. Squaring up eToro is AvaTrade, operational since 2006, with a client base of approximately 200,000 traders. Both brokers are regulated in multiple jurisdictions around the globe and provide a secure trading environment with a focus on retail traders. eToro’s biggest advantage is that it offers over 2,000 tradeable assets, but this advantage is countered by the company’s painfully high spreads. AvaTrade offers some 1,000 tradeable assets, but with lower spreads that most traders will find a greater advantage.
This comparison will focus on the following four aspects plus an ultimate verdict:
- Features and Platforms
- Available Markets
- Typical Spreads and Fees
- Security and Trust
- eToro vs AvaTrade Verdict
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Headquarters | Israel | Ireland |
Regulators | ASIC, CySEC, FCA, FSA | ASIC, BVI, Central Bank of Ireland, FFAJ, FSCA, KNF, MiFID |
Tier 1 Regulator(s)? | ||
Owned by Public Company? | ||
Year Established | 2007 | 2006 |
Execution Type(s) | Market Maker | Market Maker |
Minimum Deposit | $50 - $10,000 | $100 |
Negative Balance Protection | ||
Trading Platform(s) | Proprietary platform | Other, MetaTrader 4, MetaTrader 5, Proprietary platform, Web-based+ |
Average Trading Cost EUR/USD | N/A | 0.9 pips |
Average Trading Cost GBP/USD | 2.2 pips | 1.5 pips |
Average Trading Cost WTI Crude Oil | $0.05 | $0.03 |
Average Trading Cost Gold | $0.45 | $0.29 |
Retail Loss Rate | 74% | 77.82% |
Minimum Raw Spreads | 0.8 pips | Not applicable |
Minimum Standard Spreads | 1.3 pips | 0.9 pips |
Minimum Commission for Forex | $0.00 | Commission-free |
Islamic Account | ||
Signals | ||
US Persons Accepted? | ||
Managed Accounts | ||
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Features and Platforms
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MT4 | ||
MT5 | ||
MT4/MT5 Add-Ons | ||
cTrader | ||
Proprietary Platform | ||
Automated Trading | ||
Social/Copy Trading | ||
DOM? | ||
Guaranteed Stop Loss | ||
Scalping | ||
Hedging | ||
One-Click Trading | ||
OCO Orders | ||
Interest on Margin | ||
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Social trading is where eToro has established itself as one of the most dominant brokers, and it rose to fame with its popular CopyTrader and millions of active traders that new traders can follow. eToro attempted to enhance social trading with CopyPortfolios, an offering that was intended to diversify investment opportunities while reducing risk. CopyPortfolios are somewhat akin to mutual funds, where traders put together blocks of assets that are traded jointly. Adding appeal to investors is the Popular Investor Program, where qualified signal providers may earn 1.5% annualized on the allocated capital to their strategies. The proprietary trading platform, available as a webtrader or mobile platform, is the sole option allowed by this broker. ProCharts, intended to support manual technical analysis, and TipRanks, where over 15,000 analysts offer market coverage, are two dominant features of the trading platform. eToro also buys and holds certain physical assets on behalf of its clients.
In-house research and education are published on the company’s blog and its daily market review, though during this broker comparison we found the information to be sub-standard. Since only the proprietary trading platform is supported, tens of millions of retail traders who depend on the MT4 infrastructure are either ignored or forced to accept a lesser trading platform. Still, with only 66.0% of retail traders operating at a loss, eToro achieves superior performance as compared to the majority of brokers.
This broker supports social trading through partnerships with DupliTrade and market-leader ZuluTrade. At the core of operations are proprietary trading platforms WebTrader and AVA TradeGo. Completing the selection are the MT4/MT5 trading platforms, upgraded with the Autochartist plugin. The AVAOptions platform, armed with the availability of what-if analyses, exclusively caters to options traders.
AvaTrade offers an educational program in the form of written content, eBooks, and videos. The research division was split into a separate service, provided as a trading academy labeled Sharp Trader. 71.0% of retail accounts face losses at this broker, placing AVA Trade in a competitive field, though at a slight disadvantage as compared to eToro. The 21-day restricted demo-account is not as welcoming as the unlimited demo offered by many other brokers. This broker offers AVAProtect, an insurance policy against losses covering a predefined period. The longer the period, the bigger the fee. In our professional opinion, stop-loss orders will accomplish better protection for a smaller charge.
Available Markets
Asset selection at eToro, with over 2,000 across six categories, is superior to AVA Trade’s roughly 1,000. Pure Forex traders have over forty-seven currency pairs and seventeen cryptocurrency pairs to select from at eToro. Thirteen commodities offer genuine diversification opportunities. AVA Trade lists 250 core assets but adding the option contracts and over 700 equity CFDs boosts this number closer to 1,000. Sixteen commodities and eleven cryptocurrencies provide a refreshing range, but two bonds and five ETFs is less than ideal for anyone who needs a very wide asset offering.
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Currency Pairs | ||
Cryptocurrencies | ||
Commodities | ||
Crude Oil | ||
Gold | ||
Metals | ||
Equity Indices | ||
Stocks (non-CFDs) | ||
Bonds | ||
ETFs | ||
Options | ||
Futures | ||
Synthetics | ||
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Typical Spreads and Fees
The 3.0 pips EUR/USD, a typical mark-up in spreads common at market makers, renders the trading environment at eToro uncompetitive. This broker advertises zero commission equity trades, but only applicable to non-leveraged portfolios, a 0.09% fee applies otherwise. AvaTrade has significantly lower spreads, with the EUR/USD is listed at 0.9 pips. Equity spreads are competitive, but select commodities incur a commission charge.
Both brokerages levy swap rates on leveraged overnight positions, the precise amount for each asset may be obtained directly from the trading platforms. Corporate actions like dividends and mergers apply to equity, index, and ETF CFDs. eToro charges a $5 flat-fee on all withdrawals while AvaTrade carries an inactivity fee of €50 or a currency equivalent after three months. After twelve months of inactivity, an administration fee of €100 applies. Our conclusion from this review is that traders will find better pricing with AvaTrade, which is likely because eToro must raise fees to share the profits with their trade leaders.
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Average Trading Cost EUR/USD | N/A | 0.9 pips |
Average Trading Cost GBP/USD | 2.2 pips | 1.5 pips |
Average Trading Cost WTI Crude Oil | $0.05 | $0.03 |
Average Trading Cost Gold | $0.45 | $0.29 |
Average Trading Cost Bitcoin | $574 | $39 |
Minimum Raw Spreads | 0.8 pips | Not applicable |
Minimum Standard Spreads | 1.3 pips | 0.9 pips |
Minimum Commission for Forex | $0.00 | Commission-free |
Deposit Fee | ||
Withdrawal Fee | ||
Inactivity Fee | $10 monthly after 12 monthd | $50 quarterly after 3 months |
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Security and Trust
eToro Europe is regulated by the Cyprus Securities and Exchange Commission (CySEC), operating under the MiFID II framework and the EU’s 5th Anti-Money Laundering Directive. The Investor Compensation Fund (CIF) protects traders with maximum coverage of €20,000. While the Financial Conduct Authority (FCA) authorizes eToro UK, eToro Australia functions under the Australian Securities and Investments Commission (ASIC) regulatory environment. A FinCEN registration indicated the US entry for eToro is where it operates as a Money Services Business. Overall, eToro remains transparent and trustworthy.
The Central Bank of Ireland is the primary regulator of AVA Trade, where EU regulations apply. The ICCL (Investor Compensation Company LTD) protects traders up to a maximum of €20,000. The broker is also regulated by the Financial Services Commission in the British Virgin Islands, ASIC in Australia, and the FFAJ. Several additional jurisdictions provide a global network of regulators, creating a safe and secure trading environment. In general, AVA Trade has a clean record.
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Country of the Regulator | Australia, Cyprus, Seychelles, United Kingdom | United Arab Emirates, Australia, Ireland, Israel, Japan, British Virgin Islands, South Africa |
Name of the Regulator | ASIC, CySEC, FCA, FSA | ASIC, BVI, Central Bank of Ireland, FFAJ, FSCA, KNF, MiFID |
Regulatory License Number | 491139, 109/10, 583263, SD076 | C53877, SIBA/L/13/1049, 406684, 45984, 1662, 190018, 514666577 |
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eToro vs AvaTrade Verdict
eToro represents a reasonable option for social trading, which is retreating from its peak, but this broker attempts to innovate to remain relevant. The overpriced environment severely diminishes profitability, and further reducing the appeal is the lack of a proper trading platform. AVA Trade provides a commendable variety of trading platforms, and a more competitive pricing environment will full support for automated trading solutions. Both brokers are compliant with their regulators, but neither offers an outstanding choice. Between the two, AvaTrade seems to be the better overall choice.
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