AvaTrade Is Why Im Broke

 50 Words on – Why you can go Broke with AvaTrade?

It seems that AvaTrade uses accusations of arbitrage to cancel the profits of clients who trade during high volatility conditions, especially at the time of news releases. A client opened a ForexPeaceArmy case against AvaTrade for having almost $10K removed from his/her account under arbitrage accusations. More clients who were in a similar situation joined the discussion and AvaTrade failed to offer clear evidence of arbitrage. The case was eventually resolved but no details were given by either the client or AvaTrade, leaving the latter with a big stain on their otherwise good reputation. To make the long story short, you can go broke by being falsely accused and having your profits canceled. Not a good feeling I suppose…

My research: Probably the most tedious part was going over all the information about the FPA case against them. There was a lot of back and forth talk, accusations and some proof presented by both parties so I had to review it all. Then I had to go to all other major websites and forums to see what others have to say about them. All in all, a lot of work, but clocking it was not my main concern.

 

How Can You Avoid Going Broke With Avatrade

  • Avoid trading during high volatility at all costs because that’s when sudden spikes can occur and under some conditions, you could be falsely accused of arbitrage trading.
  • Do not use EAs, especially during news releases. Arbitrage is usually performed with the use of some sort of EA so you wouldn’t want your legit EA to be mistakenly considered an arbitrage EA.
  • Ask for written confirmation of whether they allow or not the use of a specific EA.
  • If you are dealing with large amounts, do not withdraw all at once (this applies for almost all brokers). If the brokerage is not extremely honest, a large sum will be harder to withdraw than several smaller amounts.
  • Withdraw periodically
  • Read the entire Terms and Conditions Document (you should do this before opening an account with any broker)
  • Read the Terms and Conditions of the bonus (or other promotional benefits) if you decide to accept one but keep in mind that Forexiswhyimrboke.com is recommending not taking any bonus.

 

The Good, the Bad and the Ugly Speak

Enter the Giant Enter the Giant

AvaTrade (formerly known as AvaFx) was founded in 2006 in Dublin, Ireland and since then, opened offices in Japan, Australia, China, Mongolia, France and Italy. They have a true global presence which is regulated by the authorities of the countries they activate in and their total trading volume surpasses $60 billion per month according to their website. It’s easy to see we are dealing with a giant of the industry and I believe the only way they could have become what they are today is by adopting honest, professional practices.

Alongside the popular Meta Trader 4 platform, AvaTrade offers a web based platform which doesn’t require any download. A proprietary platform, Ava Trader is also available, as well as mobile and Mac platforms. The client can choose between floating or fixed spreads, and for the guys who don’t know how to trade (or simply don’t want to trade themselves), automated trading is available with the use of Zulu Trade and Mirror Trader. The lowest account is pretty accessible, requiring an initial investment of only $100; leverage goes as high as 400:1 (on MT4), hedging and EAs are allowed. Overall AvaTrade looks like a solid business partner for any trader but almost everything is relative and opinions differ so here’s our opinion on their Bad side:

 

How Much Is Too Much? How Much Is Too Much?

I mentioned above that AvaTrade offers both fixed and floating spreads but we consider their fixed spreads to be too big. They are not outrageously big (GBP/USD has a 4 pip spread and AUD/USD is the same) so we could get over this minor downside; after all it’s sometimes better to have a slightly bigger but fixed spread than a floating which is inflated every time news comes out… But there’s a catch: the so called fixed spread is fixed only “under normal market conditions”. I thought that’s the whole idea of a fixed spread – to remain the same. I agree to pay more for each trade but you don’t widen it during volatile, irregular or low volume conditions. Well, that’s not how AvaTrade sees things and they state that “Spreads can widen depending on market conditions up to a maximum of Standard Spread x3 (Triple)”. So “How much is too much?” Triple is too much for a fixed spread! However, this is not the worst part of AvaTrade and I believe they should improve their PR if they want to make the Ugly go away.

 

Case Solved! But How? Case Solved! But How?

As mentioned at the beginning of this review, a FPA case was opened against AvaTrade by one of their clients for allegedly removing about $10K from his account under arbitrage accusations. Opening a FPA “case” is more “high profile” than just writing negative comments in a thread; it means that evidence of wrong doing is also involved and once the “case” is open, both parties must present their evidence. After this phase (if the dispute is not settled) the case goes to a vote and members of the forum decide whether the broker is guilty or not – a broker found guilty will be considered a Scam on FPA forums… which is a big deal considering the influence the FPA has on the Forex industry. Although AvaTrade representatives claimed the client used arbitrage to make his/her profits, they failed to provide satisfactory evidence. When vote time approached and it seemed the majority was inclining to “congratulate” AvaTrade with a Guilty verdict… the case was suddenly solved. But no details were given. The client just said the issue was resolved so there was no need for a vote anymore. If you want to read the whole case thread, follow the link at the bottom [1].

The thing is that we don’t actually know how it was resolved. Maybe the trader got his $10K back or maybe he admitted to using an arbitrage EA. So far all we have is his comment regarding reaching an agreement and his thanks to Ava for reaching a resolution [2]

Well, at least everyone is happy. And speaking of happy clients, AvaTrade has enough of them: Kabal from Australia has been using them for 2 years at the time of his comment and he didn’t have any problems [3], Alex from Ireland had just a 5 month experience with them but he already recommended Ava to some of his friends [4].

Maybe the biggest issue with AvaTrade is the fact that opinions are very mixed. Some users consider them the next best thing since sliced bread and others scream “Scam” as hard as they can but… come on, if we were to believe everything we hear, we wouldn’t trade at all. So yea, there are negative comments about AvaTrade, but there are a lot of positives too… and please show me a brokerage which doesn’t have negative comments on forums (I won’t hold my breath though).

The thing is that we don’t actually know how it was resolved. Maybe the trader got his $10K back or maybe he admitted to using an arbitrage EA. So far all we have is:”An agreement with Ava has been reached and I consider the issue to be resolved. I would like to thank Ava for reaching a resolution.” [2].

Well, at least everyone is happy. And speaking of happy clients, AvaTrade has enough of them:

“I am using AvaFx for 2 years now and I dont have any problems…. I believe that there are so many Forex brokers idiots/employees going around posting all negative comments just to win the competition….” [3].

“I started trading with AVA 5 month ago. Made a few profits and withdrawed money a few times. I even suggested it to friends and had no problems so far. Good platform with no comissions and very helpful dealing room.”

Maybe the biggest issue with AvaTrade is the fact that opinions are very mixed. Some users consider them the next best thing since sliced bread and others scream “Scam” as hard as they can but… come on, if we were to believe everything we hear, we wouldn’t trade at all. So yea, there are negative comments about AvaTrade, but there are a lot of positives too… and please show me a brokerage which doesn’t have negative comments on forums (I won’t hold my breath though).

 

 

Editor’s Note – Is AvaTrade a Scam?

Well, it depends a lot on who you are asking. Like I said above, some are utterly disgusted by AvaTrade and “Scam” is a widely used word, but given the fact that we are talking about a major broker, I tend to give them the benefit of doubt and go with the “non-scam” side.

 

Editor’s Note – Would I Trade with AvaTrade?

This brokerage is regulated by more than one major regulatory body and in all honesty, if it weren’t for the recent arbitrage clamor, I would have considered AvaTrade a good candidate for my next Forex account. Unfortunately the matter was not handled in a true professional way and they failed to make their position clear. This to me equals to a lack of transparency – since transparency is something I require from by business partner (I believe we can call our brokerage firm a partner), I will be on my way searching for another more suitable firm to trust with my money. AvaTrade is not bad, but not really my cup of tea.

 

References

  1. FPA Case Resolved against AVATrade
  2. FPA on AvaTrade Page

 

Have We Saved You From Going Broke?

  • Todd

    I’m trading with Ava for quite sometime, the ways to avoid going broke are really helpful, With my first deposit I took bonus and I fell hard. Now – no bonuses! no free money.

    Reply
  • Hermann Bluemlhuber

    Hello, I just got a huge SWAP deduction of around 12 000 Euro over night! My Equity was at around 13 000 Euro. So the SWAP for 1 night is almost as big as the equity! I guess it has something to do with contract renewal of Dow Jones. I have sent an e mail to AVA but I guess I have to wait until Monday.
    It happened to me before with Oil and they gave me a very complicated explanation and they didn’t refund me.
    I didn’t bother any more since it was only a small amount, but now I am really concerned.
    Do you have any explanation or suggestion?

    Reply
    • Rory McClellan

      12K SWAP out of 13K equity???? Wow, that’s impossible. They must have made a mistake. If it’s on purpose and it’s not stipulated in their T&C (or any other legal document which you agreed on), then it’s illegal (although i am not familiar with the law of each country across the globe).
      No idea about how Dow Jones contract renewal works but ask them to direct you to the paragraph in their T&C that allows them to deduct almost the entire equity. Do they have such a clause in their legal documents? Did you read them?
      This happened before but you didnt care?!!? Then why should I care?

      Reply
  • Gabriel

    Avatrade closed my trading account and informed me I would not be verified because I reside in Quebec: I was then denied of the profit I made but was told on the contrary that if I had made losses, my balance-losses would be paid to me……..If Avatrade does not actually want to fraud traders, it should have denied them right at the point of registration once quebec is entered into the online registration form.

    AVATRADE IS A SCAM, help your hard earned money by avoiding avatrade

    Reply
  • Gabson

    I have traded with my brokers (CMTrading IS THE WORST, BIG SCAMMER, you better help your I have traded with my brokers (CMTrading IS THE WORST, BIG SCAMMER, you better help your emotions by running away from them by infininte distance)

    I opened an account with CMTrading after they seemed to be nice. I was influenced by their advertisement of no fee charged on deposit and withdrawal. On opening the account, I made a profit of $4 dollars within few days and no longer comfortable with trading during the week. I requested for my money and profit of $4.

    On waiting for days for my refund to roll in, I found out I was charged $39 and was denied of my profit. What? I immediately contacted them and was told that when I made a deposit, they paid for the fee and now that I am making a withdrawal, I have to pay the fee. I called many times but all to no avail and even contacted them on facebook but the blocked me from further posting on their facebook page.

    Kindly note I did not receive any form of bonus which may warrant any kind of strict regulation on the withdrawal of my money.

    My account no: 130028138

    Reply
  • valerio

    A total fail. So inefficient. It was a nightmare to close my account. I stayed in touch with the customer service by emails and chatting directly. They were giving different information. The card that I used for the deposit had expired, so they couldn’t give back the money to that card. So they were saying that I needed to provide an official document to prove that the card had actually expired. After that they would have been able to pay me back with a bank transfer (with the bank details that I had provided). Whereas the other was saying that I needed to make a new deposit by card and then they would have provided to give the money back through the card. Finally we agreed for the bank transfer. I asked if a foreign bank account was fine and they said ok and finally, when everything seemed ok and they just had to make this transfer, they said that they couldn’t because the provided bank account was foreign. So inefficient and slow just to close an account. Furthermore, it is impossible to definitively delete the account, meaning that my login and password will always work, just that I don’t have money on it. This is really not “clean”. Why they have to keep my information such as name, email, phone, if I am not using Avatrade anymore and want to delete the account? Very unprofessional, different people saying different things. And informatically also not really a good system.

    Reply
  • jay kenneth

    I lost due to application error which I think manipulation on their side, the application wont allow me to login when they know a possible margin call can happen, luckily, i emailed them of the problem and also screenshots before a margin call happen, I said that i want to place limits because i forgot to,. That intent happened before a margin call, The application wont allow me to login to modify, so whats the other way around? then i sent those to forexpeacearmy to be reviewed and the broker failed to provide evidence against my claim, their system log shows exactly the time it happened and I emailed them before such time, so they just played me around, for months, I receive nothing but to wait and wait and wait, etc. so pls avoid them.

    Reply
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