Stock markets are volatile and full of money making potential. That’s why millions around the world are becoming traders to earn money during lockdown. Logically, if millions of people are doing it, it should not be that hard. Indeed, investing in the UK isn’t hard and there are a number of easy online trading for beginners options, but only if you have a reliable UK trading platform or a reliable trading app. The mobile trading platforms today offer more than a rudimentary user interface, they are as easy to use as desktop software and let you research, buy and sell stocks effortlessly.
Whether you want to trade every day or just once in a while, you will always find something handy. There are even apps that let you follow expert traders and copy their trades and strategies, as well as platforms that allow unrestricted access to the UK and other markets across the world. There are many options for easy online trading for beginners.
But then again, there are dozens of platforms that are simply unimpressive, this is why you need to be aware of the best stock trading apps.
The cheapest way is to set up an online account for beginners online trading. With your bank details and a debit card, you can start trading almost immediately with just a few hundred pounds. That said, if you set up an account with a company you’ve never had any dealings with before, you won’t be able to start dealing until you receive a password in the post. The dealer may also require a minimum deposit, which could be around £100.
Maybe there’s a product you use so much that your friends or relatives suggest you to buy stock in the company. Or perhaps you received a windfall and want to invest a part of it in the market to earn more profit.
What do you have to do to trade?
Select the stock name you want and you are given an indicative price quote, which is normally in pence per share. Then you choose the amount you want to put in and begin trading. You’ll get a real time quote and have around 15 seconds to execute the deal. Then the money is cleared from your online account. Obviously you can only deal with the amount of money you have deposited with the share dealer.
Do you have to pay tax?
There is a 0.5% stamp duty reserve tax on all share purchases and profits from the shares are taxable as well. You are allowed to make profits of up to £10,100 before you are charged capital gains tax at 18%. Expect the rate to rise to 40% and the exemption limit to fall.
If you’re looking to get hands on with some active online trading, here are a few steps to help get you started.
Decide the right strategy for you
Trading individual stock not only carries more risk, it requires more effort compared with investing in mutual or index funds. You need to actively watch your positions and understand whether and how to react to market moves. This is not the kind of risk most retirement investors want to take on.
If you’d rather stay largely hands off, then investing in a portfolio managed by a robo-advisor might be a better option compared with trading individual stocks.
In order to ensure easy online trading for beginners, learn everything you can about investing and markets, as mistakes can be costly. You can access a wealth of information both online and offline. There are numerous websites that offer educational resources which you can access to educate yourself. Apart from the online resources, there are books and other offline resources on offer to teach the details of stock trading.
Also, most stock brokers offer their own education centres and a staff of former traders or investment advisors who can guide you. Some brokers offer their clients paper trading, a simulation of trading that is a great way to practice without any real money or risk involved.
Choose an online broker
Choose an online broker with the tools and support available for beginners. In general, beginner traders should prioritise customer support, educational resources and account/trade minimums. Moreover, always consider the online broker’s stock trading software. New traders will prefer a platform that is streamlined, easy to navigate and one that incorporates how-to advice with a trader community of peers to help answer questions.
Once your account is open, you’re ready to start investing. What’s next? Picking stocks of course, and that’s the tricky part.
Most traders start by doing a thorough analysis of a company, looking at public information including earnings reports, financial filings and business reports, as well as outside research reports from professional analysts. Much of this should be provided by your broker, along with the latest company news and risk ratings.
Online trading for beginners can seem easy, but start slowly, picking one or two stocks and investing a fixed amount of money that you are prepared to lose. You can reinvest gains back into the stock or into other companies but don’t add more money to the pot until you know what you’re doing and have time to research into other companies.
Make a plan and stick to it
Investing can be emotional, particularly for those new to it. Losing money doesn’t feel good and it’s easy to panic and pull out at the wrong time. It’s also easy to get swept up in the excitement of what feels like a winning stock.
That’s why it’s necessary to plan how much you want to invest and at what price; also determine how far you’re willing to go before you get out of a stock. Using the right type of trade order can help you stay on track and avoid emotional responses. For example, stop-loss orders trigger a sale if a stock drops to a certain price, which can minimise risk and losses.