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The first thing to know when doing beginner online trading in securities (‘securities’ are stocks or bonds) is the difference between day trading, and investing in long-term returns.
‘Day trading’ is the name we give to trading that can be completed in a matter of seconds or minutes - with the trade being completed within the same day.
Investments are sometimes called “buy-and-hold” trades, which take place over many months, often years.
Day trading is the counterpart, known as quicker, “buy-and-sell” trading. Between them is swing trading, which can take a few days for completion - sometimes a few months.
Top Online Trading Platforms (UK 2021)
A short overview of our top picks for simple-to-use online trading platforms in the UK:
- #1 eToro: Great for Beginners + Social Trading
- #2 Plus500: A Leading UK CFD Provider
- #3 IG: Includes Trading Discounts
Note: Some of the platforms on our list, Plus500 for example, are CFD-only. Plus500 is not suitable for inexperienced traders.
Most Social Trading Platform 💬
What is the easiest type of trading?
If you want to do long-term trades that come at a much lower risk than day-trading (although the returns also take longer to ripen), but save money on hiring a portfolio manager, find a budget option with eToro’s ‘Top Trader’ or ‘Market’ portfolio.
This bundles-in a bunch of complex stocks, bonds, and other commodities, including CDFs and ETFs. Select the marketing strategy that most suits you and eToro will find you your compliment. A good option for lowering risks if day trading in the UK, getting higher upsides.
Get access to a catalog of durable, top performing traders using the platform, mapped out in a simple three-step process:
- Choose the CopyPortfolio formula that best suits you.
- Let the investment amount.
- Choose ‘Copy’ and your funds will automatically be handled
If you're curious, there’s an expert panel managing your funds. They'll keep an eye on your performance and you’ll get the benefits of third-party world-class analyst companies adding to the data pool.
For shorter-term, swing investments that minimize the amount of risk involved, use the CopyTrader system.
Join 10 million members from more than 140 countries. The social fintech system lets you subscribe to the most successful users on the platform, investing an amount that suits you and parroting their trading orders.
This can be done with a single click, although the minimum per trade is $200.
Pay zero stamp duties, zero commissions, with unlimited trades. There are no hidden fees for the management or dealing costs. eToro is targeted at the average person who may not have a great deal of surplus savings to invest - so this is a great help.
In other words, eToro pays your stamp duty and order fees. The two exceptions are for short stock or leveraged trades - and withdrawal fees. Otherwise, there will be absolutely no broker expense when you buy or sell on orders.
One of the Highest-Rated CFD Trading Platforms 🛡️
The platform is not suitable for inexperienced traders
76.4% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.
Originally established in 2008, Plus500 is an SSL-secured and highly regulated trading platform for CFDs. It provides a straightforward experience for traders who prefer a simpler way of going about things.
One of the great things about Plus500 is its proprietary WebTrader platform, which is easy to access through their web-portal. WebTrader is great in that it allows you to do a variety of things from the same window, such as place trades, create watchlists and analyze charts.
It also has a familiar layout that more experienced traders may be used to, which is great.
That being said, there is one thing that is both a positive and a negative: The relative amount of tools provided aren’t rather sparse. For traders who are used to similar 3rd party or more advanced tools, this may be problematic. On the other hand, if you’re a user who prefers a simpler experience then Plus500 is a good choice to go for.
Plus500 is highly regulated, firstly by the FCA in London, which is considered one of the best government-back regulatory bodies. Aside from the FCA, there’s also the Australian AISC, the New Zealand FMA, and South African FSCA.
Not only that, but they also have negative balance protection, which doesn’t allow a user to lose more than they’ve put into their account. They also offer a guaranteed stop-loss order on certain instruments, but they do have a wider spread.
Lots of Access
While Plus500 only offers CFDs, there’s access to 2000+ of them in over 50 countries. With them, you gain access to trading CFDs on financial instruments such as shares, ETFs, stock indices, options, and Forex.
Not only that, but your pull and call options can be customized completely towards the risks you are comfortable with and your overall strategy. Tying all that together is a relatively good customer support service, and while there’s no phone support option, chat and email are available 24/7.
Response times are excellent, well within a few minutes, although going through the chat won’t send you directly to a human being. They are available though and are knowledgeable and courteous, which is great.
Given all that, Plus500 is a great tool for experienced traders. While the platform is simple to use, CFDs are complex and statistically not profitable for most traders. The fact that they take no commissions is also great, with their profit baked into their spread. Of course, there are a few fees here and there, and the inactivity fee isn’t great, but overall it’s a great offering.
Plus500UK Ltd authorised & regulated by the FCA (#509909)
Best Broker for Trading Discounts 📉
Discounts On More Use
IG is a good option for the busy beginner determined to start trading. If you signed up for a course on the fundamentals, IG gives you discounts for users that make at least 10 trades per month.
Part of the reason why we rank eToro above IG is because it has a zero commissions policy - apart from the withdrawal fees. But, with IG, you do get commissionless trades for US shares, withstanding you made at least three trades in the previous month.
For that extra charge, you get more access to the markets. eToro does not give you access to the Dow Jones or IPO exchange, but IG does. If you’re dealing mostly in US shares, this is equivalent to eToro. Even for UK shares, you get discounts if you make more than 10 orders a month.
Possibly the best online trading platform for beginners serious about making a lot of trades in short windows.
Unsurprisingly, for a company of such a long-standing reputation, IG is heavily regulated. The Financial Conduct Authority (FCA) independently administers oversight of financial markets and various brokerages in the UK.
As IG is based in the UK, they come under FCA regulations. We should add that, although they are well regulated, the FCA is known for being lenient in important ways, allowing the market to remain liquid and competitive.
But you will be protected against fraud. The brokerage firm will not easily abuse your funds (well, it’s extremely unlikely, based on their reputation alone). The FCA is known to find in the hundreds of millions yearly. This is one of the key metrics for shooting a brokerage firm: security and trustworthiness.
Top Underrated Broker ☑️
Great Fast Customer Support
Some of the big brokers (such as Hargreaves Lansdown) don’t allow live chat. Not only does Pepperstone offer this, but you can also It support via a phone line or email. So 24/7, with international headquarters on many continents and subcontinents.
Get a price notification for key event changes in your account or the market - related to your trades. This can be configured as an automatic update as a text, tweet, or email. Also, set specific alerts to trigger the next steps.
The FAQ section can give you rapid answers to the most common questions beginners have, everything from creating your account to understanding the fundamentals involved in managing a trade.
Secure and Trusted
As a new trailer, you do not need high specific and advanced features. Unless you want to do penny stocks or ETFs, Pepperstone securely does most kinds of trades. Security should be a beginner's first consideration. While Pepperstone is relatively new, they are very fast and budget-friendly.
Access over eight years of market insights, with high-speed processors - regulated by ASIC and the FCA.
You should opt for a broker who separates the funds of the various users. This has been a common practice amongst reputable brokerages since about the 1970s.
Segmenting funds makes it less likely that brokerage firms will mix company assets with user assets. If a brokerage goes into liquidation or bankruptcy, your assets will not be lost and will be instantly returned to your bank account.
If, for some reason, your online brokerage does not do segregation, don’t use it. The best online trading platform for beginners or veterans absolutely will. The only exception is mutual funds, where your investments are commingled with the other uses / co-owners into one investment pool.
5. Interactive Investors
Best Broker for Long-Term Investments 💰
Great for Long-Term Markets
If you’re not hiring a portfolio manager - or using a smart budget-friendly version like eToro’s portfolio trading - you will need to spend a significant amount of time on the front-end learning a bit about the different long-term investment types and how to go about it strategically.
Interactive Investor gives you many options for long-term decision-making. A few different long-term trading securities types to consider: junior ISA, ISA, SIPPs, company accounts, pension trading, and more.
This is a fantastic option for beginners who are reading up on the various long-term protocols for investing, as you’ll get access to many markets that are niche relative to what other providers offer. There's no standalone platform but the trading is fast and convenient, allowing single-click orders.
Tiny Deposit with Great Technical Insights
Set up a demo account or a real account with only $1. Not recommended if money is a concern (ie. if you don't have much saved up already), but very useful if you want to test the market while learning how to master it.
There aren’t many foundational self-education guides, so you’ll need to learn on your own time if using this brokerage as a beginner. But, you'll get access to very sharp technical insights that make this one of the best online trading platforms for beginners.
Interactive Investor’s Trading Central feature offers quality technical insights, deriving from MorningStar. It’s comprehensive: get information on ETFs, funds, investment trusts and shares.
It’s typically accompanied by professional reports you can download into a PDF. There are also a ton of podcasts and articles - a great way to keep yourself up-to-date with what's happening around the world. Definitely a standout feature.
6. Hargreaves Lansdown
Automated In-App Training 👨🏫
Slick Mobile App
If you want a very user-friendly mobile app, Hargreaves Lansdown is a fantastic solution. One of the best you will find amongst all of the trading platforms.
Hargreaves has had a long time - 39 years - to build a solid reputation and infrastructure. You will find very useful charting functions and drawing indicators that you can use to highlight indices.
Use on your iPhone, Android, or iPad. It’s a simple way to trade - and learn trading (demo accounts are, of course available) - without being limited in the number of insights available for you to make your decisions. The one weakness is like a desktop platform for Windows.
Very Trusted with Handy Definitions
These guys have been around since before the 90s. Almost 90 billion pounds has been passed through this broker. Currently, they have a million clients.
As a result, you can be sure that the infrastructure is tight, with FCA regulations and fund segmentation keeping your account money safe from fraud or cybercrime.
Access razor-sharp technical and marketing analytics. Keep in mind the fees can be a little bit. You will need to deal with at least 20 trades per month, which makes this most suitable for a beginner who intends to be very active.
Find plenty of calculators and guides that beginners can use to educate themselves. If you want to understand the difference between an ISA and a share, the quick definitions can teach you some of the basics.
While you won’t find the social knowledge base - there's no ability to talk to experts and ask specific questions, nor will you find video tutorials or webinars - you get a basic understanding of the difference between things. A strong top online trading platform for beginners contender.
Online Trading Beginners – Buying guide 💡
How Do I Start Trading: For Beginners
Maybe you are obsessed with a product so much that relatives say that you should buy stock in the company.
Or perhaps things are on the up with work and you’ve decided to invest a portion of it in the market for the heck of it, and if you do well, to boost funds even more.
If you're ready to get started with beginner online trading, this buying guide section to give you a few pointers.
See our beginners online trading guide, for more.
Is This Right for You?
Hello to scenarios where you might consider trading stocks:
You’ve maxed out your employer’s pension scheme, matching it penny for penny. Many of these plans do not allow the members to purchase individual stocks - instead, you have the option to select from a range of index and mutual funds.
However, if you select an individual retirement plan, this will allow you to buy and trade stocks. You may find that you get tax advantages, where they can be deferred on capital gains or completely avoided.
The second scenario is where you've completed your pension plan and seem very likely to hit your retirement objectives.
In this case, you may want to take an additional risk with your surplus by stock trading. In this instance, you will want to open up a taxable brokerage account with an online broker, which will let you trade directly from that platform.
What You Need to Know Before You Start Trading?
If you haven't been steadily saving for retirement, you should get a headstone before you begin online trading. Maxing out your pension plan is a reliable way to build security long-term.
If you aren't heading to create passive income via business, having 6 to 12 months of savings before you mess around with online trading is a wise move. Trading individual stocks is risky and requires a lot more time than long-term investments in the index or mutual funds.
Also, make sure that you invest in education. If you’re going for individual stock trading, you need to know everything that you can about the markets and investing. Making errors can cost dearly.
Individual stocks require you to be alert and on top of your game.
Related Read: Best Investment Platforms UK
What Type of Trading Is Best for Beginners?
Which trading is best for beginners? Long-term investments, particularly those managed by a portfolio manager - mutual or index funds are the best for beginners. There is no shortcut to mastery.
It’s not enough to look for the best online trading platform for beginners - especially not if you’re a beginner investing in individual stocks.
The answer to the question “What is the easiest type of trading?” is that there is none. You can leverage a portfolio manager to handle the complicated parts for you.
If you want to invest in individual stocks, you’ll need to invest the time - go the training and education route. During, use an online broker that suits your needs. Once your account is open, use a demo account so the money you invest is virtual.
Whatever strategy you decide on, make sure you stick to it. Emotional investment is the most common way people lose money in the stock market. Have an airtight strategy and stick to it, for instance using stop-losses to trigger a sale if the price climbs or drops to a specific point.
Is Stock Trading Safe?
See our article on is stock trading safe. Apart from ensuring that you have a sensible investment strategy, and enough awareness of the market to entangle with it, before choosing your platform you want to consider these dimensions:
#1 Is It Secure?
Don't take their word: check whether key regulatory bodies are overseeing the company. This is an absolute MUST - they have to be a member of one of these regulatory bodies:
- For the United Kingdom: Financial Conduct Authority and Prudential Regulation Authority
- For the United States: Commodities Futures Trading Commission and National Futures Association
- For Australia: Australian Securities and Investments Commission
- For Canada: Investment information Regulatory Organization of Canada
- For Switzerland: Swiss Federal Banking Commission
There are more, but any top online trading platform for beginners should have strong regulatory pressures.
Even eToro charges commissions for withdrawals. There will always be a charge for trading, this is how the brokerage makes money. Look for the most affordable rates, although you may need to balance costs for reliability and trustworthiness.
#3 Trading Platform Quality
Are you offered a news feed? How user-friendly are the apps? And do they work on a range of devices? How easy is it to access technical tools like charting? The better the tools you're offered, the more convenient trading is.
#4 Speed of Execution
This comes more into importance if you are doing very fast trading such as scalping, which can happen in a matter of seconds. Your broker should be able to actually execute your order at very close to the market price that you see live.
#5 Customer Service
Hopefully, you won't need this but it does help to be able to quickly talk to a representative if a technical issue pops up. Forex brokers are notorious for being extremely helpful pre-sales, but terrible afterward.
Relatead Read: Best Forex Broker (UK)
Beginner Online Trading - Terminologies
Simply means to buy shares of a stock with the aim of selling it inside the same day.
Shares held overnight. They're still very short-term investments but may accrue to many nights.
Pattern Day Trader Rules (PDT)
Sets the minimum number of trades a person needs to make - 3 or more in a 5-day period - in order for them to qualify as a day trader. They must also have a balance of $25,000 USD.
Bull / Bullish
If a stock market is strong and moving upwards, or expected to go up, the investor or market is described as bullish.
Bear / Bearish
Opposite of the above. Describes a weak market or the relative buying expectation of a trader.
Stock Market Hours
The stock market is open from 9:40 a.m. to 4 p.m. EST Mon-Fri. It closes at 1 p.m. on certain holidays.
High-Frequency Trading (HFT)
The use of powerful computers to automate trading and execute on big orders very quickly.
What's known as Market Capitalization is a measure of a company's size. A company could be small or medium or large-cap, based on how the market values their outstanding shares.
Earnings Per Share
The portion of a company's revenue distributed to a person's share of the stock. Analysts use this as a key metric for measuring value.
Two companies making a deal to become one single company.
Calculated over a given period of time as a standard deviation.
The more volatility that security has, the less stable it is.
Pump and Dump
An unethical investment tactic wherein false statements are made to the public about a stock's value in order to artificially increase the price, likely before bailing.
An investment vehicle type that pools funds together, so they can be invested into securities diverse security such as bonds and stocks.
Securities whose value depends on one or more assets associated with it, such as options or potential future contracts.
This describes asset ownership once debts and other liabilities are resolved. It can also describe the ownership of shares in a public company.
Stocks in blue-chip companies usually value that billions of dollars, have a long-lasting reputation, and pay dividends.
When money is paid to shareholders who own shares of the company, as a way of spreading the company’s success to shareholders.
Best Online Trading Resources & Tools for Beginners 📚
With that said, here are our top picks for beginner online day trading:
Find at warriortrading.com - Warrior Starter is a beginner class for day trading, where you get a real-time trading simulator, access to chat rooms, and a 1-month course starter membership. A good scheme for people on a budget.
Bear Bull Traders’ Education
Find courses for every level of experience, where you’ll learn strategies outlined in best-selling trader books by Andrew Aziz.
The Stock Day and Swing Trading Course (2ndSkies)
This course gives you meta strategies for day and swing trading, with news feeds and webinars. Find 6+ hours of video lessons, with monthly coaching sessions. Also the trading setups of other members.
Books on Online Trading
Here are five of the best books on online trading:
- How to Day Trade for a Living by Andrew Aziz - teaches you the basics of day trading
- Forex Trading by Jim Brown - great for someone starting with a top online trading platform for beginners
- Business for Beginners by Michael swing - get an understanding of all the investment options
- Stock Market Investing Playbook by David Reese - boost your confidence in decision-making
- Swing trading for Beginners - get the benefits of day trading without the massive risks
How Do I Learn Day Trading?
Look out for these qualities when choosing your educational resources and courses:
#1 Make sure the course is run by a professional. Your tutor should be a proven expert in trading, with at least 10 years of experience as a professor of finance or direct trading experience. Only take courses from those who are professionals inside the field, ensuring that you get the most relevant up-to-date data.
#2 Look for educational resources that have interactive supporting tools. For instance, a knowledge base that you can search if there is terminology or concept you do not fully grasp. Can you contact the professor in an online form? Is there some way students can coalesce and exchange information?
#3 Make sure you select the course that targets your specific level and ghost. read the quote description in detail before signing up, as there is no use in taking an advanced training course where it is assumed that you already know the fundamentals.
#4 Avoid any course that teaches you to make millions of money by day trading, or that guarantees an amount of return, or some other fast money-making scheme. If it sounds too good to be real if likely is.
Can You Start Day Trading With $500?
For day trading in the UK, that’s roughly the minimum you’d need - which could make between $5-$15 per day (and this isn’t necessarily regular.
But, as a beginner, your focus should be more on education than getting instant returns - but this would be particularly good for a long time investment such as mutual and index funds. As a reminder, make sure that you have at least 6-12 months of living expenses saved up, before considering online trading.
Which Stock Trading Site Is Best for Beginners?
Whether a top stock trading app, site or platform, it needs to be able to act as a broker. This means it should let you create a brokerage account and begin trading real money.
Our recommendation would be eToro, as there are so many social features that let you access instant information from experienced traders. The minimum requirements for creating an account are also optimized for people relatively new to this kind of investment.
Online Trading Beginners – Conclusion 🏁
Access experts and use the CopyTrader system to do everything from imitating individual trades to creating full trading portfolios (based on the decisions of longtime successful expert users).
For beginners who intend to do a lot of trading, in order to learn rapidly, IG gives discounts for active use and has advanced tools.
And Interactive Investors stands out for having access to many long time investment products - you’ll have to put in the work, to use them, however!