eToro vs ayondo
This article compares ayondo and eToro, two of the most popular social trading networks. Because we’ve had live real money accounts with both networks since 2012 we believe we’re in a good position to evaluate both.
As with all our social trading platform reviews (which include detailed reviews for eToro and ayondo as well) this article is kept up to date when new features are released or our opinions change.
TABLE OF CONTENTS (click to jump directly to the section)
- Sign-up and Regulations
- Costs & Fees
- Self (Social) Trading
- Investing / Trade Copying
- Summary (ayondo vs eToro)
Sign-up and Regulations
Both eToro and ayondo operate a broker-network model, meaning that they act as the Forex broker as well as the social trading network. So there’s no need (or option) to sign-up with a separate broker, which obviously makes the sign-up process fairly straight forward.
Both companies let you sign-up for a demo account first which allows you to trade yourself with virtual money and/or use the virtual money to automatically copy the trades from other traders. The main difference is that ayondo demo account only allows you to copy traders for 2 weeks (though you can repeat this as many times as you like). eToro’s demo account doesn’t expire and has no limits.
Once you decide to trade with or invest real money there are also some differences. While eToro allows you to make deposits in different currencies, all trading account are held and managed in $ USD. This means your deposit will be converted and your investment will technically always be in a $ position versus your local currency (which depending on the market movements can be positive or negative by the time you cash out). The minimum deposit is $200.
Ayondo allows you to open and manage your account in 4 different currencies: Euro, £, $, CHF. Their minimum deposit is 100 of whichever currency you choose. UK and Irish customers can also open their ayondo accounts as a spread betting account. Spread betting is currently free of capital gains tax in those countries and hence attractive for them.
Another key point to mention here is that ayondo is registered in the UK and regulated by the Financial Conduct Authority (FCA). This means the Financial Services Compensation Scheme (FSCS) will compensate you up to £75,000 in case the company defaults. Ayondo have also taken out an additional insurance cover, which covers each of their clients up to £500,000 in case of default.
eToro (UK) is also regulated by the FCA (providing cover up to £50,000), while eToro (Europe), for all non-UK customers, is registered in Cyprus and regulated by the Cyprus Securities & Exchange Commission (CySEC). The CySec also provides cover of up to 20,000 Euro per client.
Costs & Fees
It’s totally free to join either ayondo or eToro, and there are no service or performance fees to pay for using the service or copying other traders. In fact both networks regularly run special promotions which give you a deposit bonus when you join or make new deposits to your account. Make sure you check the latest social trading offers.
So basically the only costs to you is the broker spread and the rollover fees.
The following table compares spreads for a range of spreads, from live account at the same time (so not just the indicative ones they publish themselves):
So the spreads are fairly similar for the major currencies, indices, commodities and shares. However on more exotic currency pairs the spreads are significantly lower at eToro than they are at ayondo.
In terms over overnight roll-over fees, eToro is more expensive because they charge you more for long positions than they credit you on short positions. Ayondo use the same formula to calculate the long financing charge and short financing credit.
In addition to the spreads and roll-over fees, another cost to you when you copy other traders is the slippage – i.e. the difference in the price you get compared to the price the trader you copied got. While slippage can work in your favour or against, due to the nature of trade copying, it more often goes against you.
However the good news is that from our experience the slippage is very low at both eToro and ayondo, and they are among the lowest of the social and copy trading sites we’ve used. Obviously it helps and makes a lot of difference that you and the traders you copy are using the same platform.
Self (Social) Trading
While investors will join these networks purely to copy other trades, many of you will join as well to trade yourself and potentially make some extra money when other people start copying you.
In terms markets you can trade on, both offer currencies, commodities, stocks and indices. Ayondo also allows you to trade short-term interest rates & bonds CFDs, while eToro lets you take positions on ETFs (Exchange Traded Funds).
Both eToro and ayondo use their own proprietary trading platform, but those are quite different.
With eToro you set the amount you want to risk and leverage – stop levels are automatically set at 50% of the position amount, based on the leverage used. Before you place the trade it’ll show you the estimated overnight fees.
ayondo on the other hand uses the ‘spread betting’ model and you set the amount you want to risk per point before you place the trade. You can also set your stops and the interface will display your potential gains or losses based on your input before you place the trade.
Both models are different from the “lots model” used by most brokers or the MT4 platform some of you might be familiar with. The ayondo approach is probably closer to this model and therefore easier to get started with if you’ve been familiar with buying or selling lots. However the eToro model may be more attractive to others. It all depends on personal preferences and there are enough guides available on both websites to help you, as well as the demo accounts.
Another key difference is the relationship between the trading platform and social trading network.
ayondo’s trading platform, TradeHub, runs totally separate from their social trading platform. Both require you to login separately and will run in different browser tabs. There’s no integration between them, so you either trade or invest/copy other traders. You cannot “trade socially”.
“The New eToro” platform released in 2015 is on the other hand fully and seamlessly integrated. You can enter trades from pretty much any screen. E.g. if you’re reading a discussion on the EURUSD in your newsfeed or looking at the sentiments of what other traders are doing, it only takes you 2 or 3 clicks to enter a position. The trading and social platform are the same which means you can “trade socially” while you absorb the news and knowledge of the other traders on the eToro network.
Both networks also pay you when you’re a successful trader and other people copy your trades.
eToro pays you from $350 per month once you get 50 copiers to 2% of the AUM (Amount Under Management) once the total invested in you is higher than $300,000 + spread rebates.
With ayondo you start a career path and based on your performance, risk approach and lifetime your rewards will increase from 1 and 5 USD per LOT.
Whichever model is most rewarding for you obviously depends on your trading style. Longer term or very risky traders will on average be better off with eToro’s model, while day and well managed traders will likely reap higher rewards at ayondo.
Traders who run automated trading robots will have to look elsewhere though because neither trading platform supports them at the moment. All trading needs to be do manually but you can trade from anywhere. eToro’s web platform is fully mobile responsive and they have an iPhone and Android app too. Ayondo’s TradeHub website works fine on tablets but not so much on mobiles. However Android or iPhone users can download and use their TradeHub apps to trade on the go.
Investing / Trade Copying
Trader Research Features
Many of you will be interested in using eToro and ayondo to automatically copy other successful traders. Both social trading platforms offer an advanced search tool which allows you to filter through all the traders on their network based on various performance and risk indicators such as number of followers, past returns and maximum historic drawdown. In our opinion both still have room for a little bit of improvement but overall they’re very similar in terms of functionality and a good starting point when looking for the best traders to copy.
Once you’re interested in a trader you want to copy you can drill down to get more information. Again both platforms are very similar and show historic performance as returns per month. Neither provide a massive amount of indicators, but ayondo’s indicators tend to be more technical (such as Sharpe Ratio, MAR Ratio and Value-at-Risk) while eToro’s are more geared to the novice investors.
Both networks also share the current open positions from the traders with you (very important) but while you can in theory view every historic trade as well, it’s not very practical on either platform.
Traders on eToro can also communicate with the community allowing you to comment and ask questions, though not all of them do so. No options to interact directly or indirectly with the traders on ayondo.
Risk Management Features
Once you start copying trades from other traders on both platform your trades are opened proportionally in size to the size the trader you copy opens them. So if they risk 2% then 2% of your allocation is risked. However there are some subtle difference between ayondo versus eToro.
The total amount of traders you can copy at the same time on ayondo is limited to 5. If you only copy 1 trader then your full balance will be invested in this trader. If you copy 2, then 50% of the balance and all 5 then 20%. However you can adjust the order size and risk factor per trader you copy from 0.5X to 10X the order size of the trader. I.e. you can reduce your risk a little bit but also use leverage and significantly increase your risk. There’s however no way you can limit your losses per trader with ayondo. So if you increase your leverage significantly (i.e. gamble) then one bad trader can potentially wipe out your full balance. Hence regular monitoring is required if that’s your approach.
You can copy an unlimited amount of traders at the same time with eToro and for each one you select the exact amount you want to invest in them. Trades will be copied proportionally to this invested amount and you will never lose more than this. But in addition, you can set a stop loss $ amount or % ratio at which you want to stop copying the trader (e.g. stop copying XYZ is he loses more than 20% of my investment in them).
So eToro certainly has an edge in terms of reducing the risk you take per trader while ayondo has the option to leverage your invested capital in case you want to increase your risk.
Both social trading networks offer email and telephone support. In our many years as customer the response of both has been quick and knowledgeable. Both also provide occasional webinars and their websites feature help guides.
eToro also sends out regular market updates and organises useful get-togethers for clients in their local offices. If you have a total net deposit of over $25,000 eToro will also assign you a personal account manager and you get access to some premium services and exclusive deposit offers.
I wonder how many of you have come straight to this section. So on which of these social trading networks, ayondo or eToro, can you make the most money?
If you have a small amount to invest and want to try to get exponential returns on this, then ayondo will be your only option (because of the opportunity leverage). However you can also visit a casino website if that’s you approach.
If you’re looking for more gradual returns than the performance obviously depends on the quality of the traders on each network. In over 4 years we’ve found and copied some good consistent traders on each network, but also (in the beginning) copied some traders which lost most of their allocation within a few months (which were important lessons we learned in terms of selecting the best traders).
There are seasoned traders with 3 years or more experience and trading history on both networks, and new traders to consider arriving all the time. Traders on eToro tend to be more longer term traders who go through longer and larger periods of drawdown (something evidenced when you compare the most copied traders on eToro with the most followed ones on ayondo).
In terms of historic returns (which do not guarantee future returns) there’s a wider range in % profits and losses on eToro versus ayondo. You can look at the latest ‘real-time’ trader performance data on each of the networks here (there’s no need to register to view that information):
- View the most copied traders on eToro (and their returns over the past month and year)
- View the most followed traders on ayondo
You can also see that with almost 200,000 versus 2,000 people you can copy on eToro, they have the most choice. However this is also because at eToro you can copy everyone, even investors who only copy other traders themselves. Traders on ayondo have to specifically register as “Top Trader” before they can be copied.
Traders on ayondo can use a demo account to send their signals if they like. However most of their Top Traders use a real money account and since neither network shares the account balances you’ll never know how much the traders actually risk themselves (it can technically be as low as $200). Though obviously they all risk losing their commissions if they perform badly and they lose followers.
If you’re a good trader and your purpose is to make extra money then your performance will depend on the amount of people you can get to follow & copy you, as well as the compensation model. As you’ll notice from the links in the previous section, the leading traders on eToro have slightly more copiers, and eToro does has a larger customer base.
However once you are a leading trader your compensation is very much related to the amount of money invested in you. Ayondo’s total customer base may be smaller and less global, but they’re strong in Germany (where they’re based) and the UK (because the spread betting offering). Hence it’s our impression that there’s not that much difference between them in terms of money invested in the top traders.
Your performance will therefore depend on your trading style. As mentioned earlier, if you’re a longer term trader, eToro’s commission model will probably suit you better, while short term day traders will likely see higher returns on ayondo. Although, if you truly are a consistently successful trader, the potential to make an extra income is very good on both.
Summary (ayondo vs eToro)
In our opinion there’s not really any point in picking one of these social trading networks over the other one. Many of the features offered by both are very similar and which one is best very much depends on how you want to trade and/or invest.
If you trade yourself then both offer a wide range of instruments for you to trade on and commissions when other people follow and copy you. However, if you want to “trade socially”, in the sense of interacting with other traders and viewing their market sentiment in real time, then eToro is the only platform which offers that functionality.
If you just want to copy other traders then both offer a good choice for you to review and consider. The features to look for and evaluate other traders are fairly similar. The one main caveat with eToro is that all accounts are held in $USD which means that if you want to have your account in GBP or EUR ayondo is your only option.
Don’t forgot though that both offer free fully functioning demo accounts so you can try both with virtual money first to see which one suits you best.
As mentioned at the start, this article will be kept up-to-date when new features are releases or our opinion changes.
Last updated: May 16, 2016