eToro vs AvaTrade

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:

Feature eToro (visit site) AvaTrade (visit site)
Headquarter: Cyprus Ireland
Regulation:
CySEC, FCA, ASIC Central Bank of Ireland, FSC, ASIC, FSCA, FSA
Type of Broker:
Market Maker Market Maker
U.S. Clients Allowed:
Minimum Deposit:
$50 - $10,000 £100 or a currency equivalent
Maximum Leverage:
1:30 (CySEC, FCA), 1:500 (ASIC) 1:30
Commissions / Spreads:
Spreads Spreads
Account 1:
Standard CFD
Account 2:
Professional Spread Betting (the UK only)
Account 3:
Professional
Account 4:
options Trading
Demo Account:
Islamic Account:
Segregated Account:
Managed Accounts:
Institutional Accounts:
Website Languages:
  • English
  • Chinese
  • 18+
  • English
  • Spanish
  • 27+
Support Hours:
24/5 24/5
E-mail Support:
SMS Support:
Chat:
Broker Offers:

Features and Platforms

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 2% 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.

The overpriced trading environment and sub-standard trading platform diminish the appeal of eToro.

eToro Homepage

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.

Marketing-inspired services diminish the acceptable core product of AVA Trade.

AvaTrade next generations trading tools

Feature eToro AvaTrade
Type of Platform: Proprietary trading platform MT4, MT5, AVAOptions, AVA TradeGo
Platform Languages:
  • English
  • English
  • 28+
OS Compatibility:
  • Mobile
  • Web
  • Mobile
  • Web
  • Desktop
Trading Signals:
Charting Package:
Market Analysis:
Chart Trading:
Automated Trading:
Scalping:
Hedging:
Mobile Alerts:
Trailing Stops:
Guaranteed Stop Loss:
One-click Execution:
Interest on Margin:
Web-based Trading:
Mobile Trading:

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.

Feature eToro AvaTrade
ETFs:
CFDs:
Commodities:
Metals:
Stocks:
Oil:
Gold:
Binary Options:
Indices:
Cryptocurrencies:

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.

eToro advertises 0% commission, but it only applies to non-leveraged buy orders. The overall trading environment remains uncompetitive.

eToro Trading conditions

Trading conditions at AVA Trade remain significantly superior.

AvaTrade Trading conditions

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.

eToro is a well-regulated and fully compliant brokerage.

eToro regulators

AvaTrade has several global regulators and a clean regulatory record.

AvaTrade Regulators

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.

Read full eToro Review
Read full AvaTrade Review