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How to Start Trading Stocks – Some Tips for Getting Started in 2019

If you are someone who up until now has only ever made cash investments, diving into the fast-paced world of how to start trading stocks online may seem like a daunting prospect. The possibility for profit is so much greater than your current investments, but unlike those current ones, you could lose money. It is important to remember that the stock market is a long-term investment. Read on to discover how to start trading stocks and the common pitfalls to avoid.

  • Choosing a good broker
  • Getting started with your account
  • Ways of trading stock
  • Tips for the new trader
Stocks Highlights

Educate yourself thoroughly

Learning how to start trading stocks online can be a steep learning curve, so acquire as much knowledge as possible before you start. With low interest rates, there’s a good chance that your current investments are not performing as well as you would like, but it is important to remember that trading in stocks is no guarantee of profit. Stocks and shares are generated when a previously private-owned company releases shares on the stock market, which in the UK is the London Stock Exchange, to be bought and sold. There might be many reasons for a corporation to do this, but the most common is to free up funds for further expansion. You may well have heard remarks about the market rising and falling. This does not refer to every single stock, but to indices, groups of stocks that can give an indication to how the market is performing as a whole. The best known of the indices in the UK is the FTSE 100. To find out as much as possible before you start, read as many books on the subject as you can, search for helpful articles and, if you’re wondering how to start trading stocks for beginners, speak to someone who is familiar with trading stocks and shares. By picking up trading strategies from the experts, your chances of success will be greater.

Top 3 Stock Broker Comparison

1
of 10 Stock Broker eToro
National fees £0.00
Custody fee £0.00
Intl. fees £0.00
Dep. Protection £50.000
Go to Broker
Risk warning: Capital can be lost. Terms and conditions apply.
2
of 10 Stock Broker Interactive Investor
National fees £7.99
Custody fee £9.99 monthly
Intl. fees £7.99
Dep. Protection 50.000 GBP
Go to Broker
Risk warning: Capital can be lost. Terms and conditions apply.
3
of 10 Stock Broker IG Stock
National fees £ 8,00
Custody fee £ 8,00
Intl. fees 10 EUR
Dep. Protection 50,000 GBP
Go to Broker

74% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money. Professional clients can lose more than they deposit. All trading involves risk.

Find a good broker

Choosing your broker is one of the most important decisions you will make, so take the time to choose wisely. Once you start trading, the last thing you will want is to be worrying about issues with the broker. An internet search will throw up many results, but not all of these are reputable and not all will be effective. You will also need to decide how you are going to make your trading decisions. Are you looking for an execution-only broker, where all decisions remain firmly in your hands, or are you wanting a broker who will offer advice? Regardless of the answer to this question, a good way to choose a good broker is by reading reviews and finding a good broker comparison article. You can also choose a broker who will carry out all transactions on your behalf. This is called discretionary management. However, for the purposes of this guide, it will be assumed that you want to know how to start trading stocks yourself and will not be relying on your broker to make the decisions. As well as reading the online information, look out for personal recommendations from friends and colleagues who have also recently thought how to start trading stocks online and are happy with the performance so far.

Ratgeberbilder Artikel Buecher

Signs to watch out for

Brokers can differ, and some features will be simply down to personal preference. However, there are some signs that can tell you if a broker is likely to be an ineffective one. These include:

  • Poor regulation: The website should indicate which financial body, if any, is regulating the broker. Regulation suggests that the broker follows stringent guidelines. For example, the UK’s Financial Conduct Authority (FCA) is well known for its strict guidelines and compensation scheme if the broker runs into trouble.
  • Poor customer service: As a novice trader, good customer service is essential. Look for a broker that can be contacted at least 24/5, and 24/7 is even better. See how you can contact them. Will you have to send an email and wait for a response? Reviews can tell you how quickly phone calls and live chat are usually answered.
  • Costly prices: Watch out for high commissions that eat into your profits. However, a zero commission may not be any cheaper. If fees are taken from the spreads, the price structure can be hard to understand. Be wary if the broker cannot give you the average cost. Also, look out for hidden charges, such as for making withdrawals and deposits.

Other factors that may be more down to individual preference include platform features, research and training opportunities and languages used on the website and by customer services.

Opening an account

Opening an account is usually a straightforward process that can be completed online and can take just minutes. Every application process is slightly different, but typically it will include the following steps:

  1. Create a login for your chosen broker account, choosing a password that you can remember but will not be easily guessed by others.
  2. Complete the information required on the application, which will typically include details such as your full name, date of birth and address.
  3. Confirm your identity. The broker may request identification documents to be provided. If so, these can be scanned and easily uploaded to confirm your details.
  4. If a broker has more than one account type, you will need to decide which account you are opening.

Ratgeberbilder Artikel Demokonto

You will also need to know how you are funding your account, and brokers will typically have a number of ways of depositing and withdrawing sums. Once your account is open, you can deposit money and take your first steps into trading for real. However, no matter how much you have read, actually starting to trade can be complicated, with events fast moving. Different platforms have different features, which you will need to understand. Before trading for real, it is well worth practicing using a demo account.

Getting the most from a demo account

While you will probably be keen to start trading for real, do not skip the step of using a demo account. Not all brokers offer these, so it is well worth using a broker who does. A good demo account should offer all the features of the broker’s platform, allowing you to trade stocks in real market conditions. Some brokers offer a demo account for a limited time only, while others have an unlimited demo account. When using the demo account, you are given an amount of virtual capital. Using this, you can learn how to place trades, use the tools of the platform, and get a feel for how the market works. It is strongly recommended that you use this feature for as long as you require, but be aware that there are some aspects that a demo account cannot replicate. Trading for real can be an emotional experience, with the highs of making a profit matched by the lows of losses or missed opportunities. Without the risk of losing real capital, it is impossible to replicate that emotion, meaning that decisions you make in the demo account may be different from those you will make when you come to trade for real. It should also be remembered that successful trading in a demo account is no guarantee of profits when you trade for real.

How to buy shares

The traditional way to buy shares involves you actually owning the asset. This may mean that you have shareholders’ voting rights and will receive dividends if the company pays these. You will only receive a profit once the price has risen and can only trade during stock exchange opening hours. The other main way to buy shares is as a CFD (contract for difference), a way of trading that can be used on a number of instruments, not just shares, making this method a good one for those who want to build up a varied portfolio. In this method of buying, you do not actually own the stock, but instead make or lose money based on the movement of the prices, so profits can be made on falling markets as well as ones that are rising. At present, this way of trading is free from stamp duty, and losses can be offset against profits for tax purposes. There are no time constraints with trading CFDs with deals made around the clock, but there are also no shareholder privileges from CFD trading, and, if you’re wondering how to start trading stocks for beginners, it remains a personal decision as to which way of trading stocks works best for you.

Take the time for ongoing training

When you learn how to start trading stocks, you will starting a learning programme that should last as long as you keep trading. There are always new strategies to try and skills to be honed. As you start to trade, you will undoubtedly see mixed results, and you will need to analyse these as well as any other information to see how your performance can be improved. A good broker recognises that they have a responsibility to their clients, particularly the novice ones, and will provide well-organised trading materials that can be used at every stage of your trading journey. Materials that they might offer include:

  • Articles written by experts
  • Webinars on the different aspects of trading
  • Training videos
  • A good FAQs section
  • eBooks

Other features to look out for include the analytical tools available on the trading platform. Although these can be downloaded elsewhere, it is useful to have them incorporated into the platform. A good news feed is also useful, as events affect how the market moves. If your broker gives you access to an unlimited demo account, keep yours open even after you start trading for a real. It is always a good idea to test out new strategies in a demo account before using them with real capital.

1
of 29 Forex Broker Pepperstone
Currency pairs 70 Currencies
Max. Lever 1:30
Trading size Mini-Lot
Minimum deposit £ 200
Go to Broker
Risk warning: Capital can be lost. Terms and conditions apply.
2
of 29 Forex Broker GMO Trading
Currency pairs 60 Currencies
Max. Lever 1:30
Trading size Micro-Lot
Minimum deposit $ 250
Go to Broker
Risk warning: Capital can be lost. Terms and conditions apply.
3
of 29 Forex Broker XM
Currency pairs 55 Currencies
Max. Lever 1:30
Trading size Micro-Lot
Minimum deposit $ 5
Go to Broker
Risk warning: Capital can be lost. Terms and conditions apply.
4
of 29 Forex Broker iTrader.com
Currency pairs 50 Currencies
Max. Lever 1:30
Trading size Micro-Lot
Minimum deposit £ 250
Go to Broker
Risk warning: Capital can be lost. Terms and conditions apply.
5
of 29 Forex Broker ETFinance
Currency pairs Currencies
Max. Lever 1:30
Trading size Micro-Lot
Minimum deposit £ 250
Go to Broker
Risk warning: Capital can be lost. Terms and conditions apply.
1
of 6 ETF Broker IG
ETFs w/ discount 1200
Custody fee 0 GBP
Min. deposit £ 0
Trading from 5 GBP
Go to Broker

74% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money. Professional clients can lose more than they deposit. All trading involves risk.

2
of 6 ETF Broker Fidelity
ETFs w/ discount 93
Custody fee 0 GBP
Min. deposit £ 2.500
Trading from 25 GBP
Go to Broker
Risk warning: Capital can be lost. Terms and conditions apply.
3
of 6 ETF Broker AJ Bell Youinvest
ETFs w/ discount
Custody fee 0 GBP
Min. deposit £ 0.00
Trading from 1,50 GBP
Go to IG
Risk warning: Capital can be lost. Terms and conditions apply.
4
of 6 ETF Broker Bestinvest
ETFs w/ discount 216
Custody fee 0.4% annually
Min. deposit £ 500
Trading from 0 GBP
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Risk warning: Capital can be lost. Terms and conditions apply.
5
of 6 ETF Broker DEGIRO
ETFs w/ discount 740
Custody fee 0 GBP
Min. deposit £ 0
Trading from 1,75 GBP + 0,004%
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Risk warning: Capital can be lost. Terms and conditions apply.
1
of 10 Stock Broker eToro
National fees £0.00
Custody fee £0.00
Intl. fees £0.00
Dep. Protection £50.000
Go to eToro
Risk warning: Capital can be lost. Terms and conditions apply.
2
of 10 Stock Broker Interactive Investor
National fees £7.99
Custody fee £9.99 monthly
Intl. fees £7.99
Dep. Protection 50.000 GBP
Go to Broker
Risk warning: Capital can be lost. Terms and conditions apply.
3
of 10 Stock Broker IG Stock
National fees £ 8,00
Custody fee £ 8,00
Intl. fees 10 EUR
Dep. Protection 50,000 GBP
Go to Broker

74% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money. Professional clients can lose more than they deposit. All trading involves risk.

4
of 10 Stock Broker Calamatta Cuschieri
National fees £ 7.50
Custody fee £ 0.00
Intl. fees £ 7.50
Dep. Protection 100.000€
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Risk warning: Capital can be lost. Terms and conditions apply.
5
of 10 Stock Broker Hargreaves Lansdown
National fees 11,95 £
Custody fee 0,00 £
Intl. fees 11,95 £
Dep. Protection 50.000 £
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Risk warning: Capital can be lost. Terms and conditions apply.
1
of 29 CFD Broker Pepperstone
FTSE spread 1 Point
Dep. Protection £ 50.000
Max. Lever 1:30
Min. deposit £ 200
Go to Broker
Risk warning: Capital can be lost. Terms and conditions apply.
2
of 29 CFD Broker GMO Trading
FTSE spread 1 Point
Dep. Protection € 20.000
Max. Lever 1:30
Min. deposit $ 100
Go to Broker
Risk warning: Capital can be lost. Terms and conditions apply.
3
of 29 CFD Broker XM
FTSE spread 1.0 Point
Dep. Protection £ 50.000
Max. Lever 1:30
Min. deposit $ 5
Go to Broker
Risk warning: Capital can be lost. Terms and conditions apply.
4
of 29 CFD Broker iTrader
FTSE spread 1 Point
Dep. Protection € 20.000
Max. Lever 1:30
Min. deposit £ 250
Go to Broker
Risk warning: Capital can be lost. Terms and conditions apply.
5
of 29 CFD Broker ETFinance
FTSE spread 1 Point
Dep. Protection € 20.000
Max. Lever 1:30
Min. deposit $/€/£ 0
Go to Broker
Risk warning: Capital can be lost. Terms and conditions apply.
1
of 18 Crypto Broker eToro
Crypto currencies 10
Max. Lever 1:2
Min. deposit $ 200
BTC spread 1,50%
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Risk warning: Capital can be lost. Terms and conditions apply.
2
of 18 Crypto Broker GMO Trading
Crypto currencies 33
Max. Lever 1:2
Min. deposit $ 100
BTC spread varied
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Risk warning: Capital can be lost. Terms and conditions apply.
3
of 18 Crypto Broker IQ Option
Crypto currencies 13
Max. Lever 1:1
Min. deposit $ 100
BTC spread 6 percent
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Risk warning: Capital can be lost. Terms and conditions apply.
4
of 18 Crypto Broker iTrader
Crypto currencies 33
Max. Lever 1:2
Min. deposit £ 250
BTC spread Floating
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Risk warning: Capital can be lost. Terms and conditions apply.
5
of 18 Crypto Broker ETFinance
Crypto currencies 5
Max. Lever 1:2
Min. deposit £ 250
BTC spread 1%
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Risk warning: Capital can be lost. Terms and conditions apply.
1
of 7 Social Trading Broker eToro
Underlying assets 866
Dep. Protection 50000
Min. deposit £ 200
Max. Lever 1:30
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Risk warning: Capital can be lost. Terms and conditions apply.
2
of 7 Social Trading Broker ZuluTrade
Underlying assets 200
Dep. Protection
Min. deposit £ 0
Max. Lever 1:30
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Risk warning: Capital can be lost. Terms and conditions apply.
3
of 7 Social Trading Broker Ayondo
Underlying assets 90
Dep. Protection 1000000
Min. deposit £ 2000
Max. Lever 1:30
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Risk warning: Capital can be lost. Terms and conditions apply.
4
of 7 Social Trading Broker Tradeo
Underlying assets 122
Dep. Protection 20000
Min. deposit £ 250
Max. Lever 1:30
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Risk warning: Capital can be lost. Terms and conditions apply.
5
of 7 Social Trading Broker FXTM
Underlying assets 247
Dep. Protection 20000
Min. deposit £ 10
Max. Lever 1:30
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Risk warning: Capital can be lost. Terms and conditions apply.
1
of 9 Spread Betting Broker City Index
FTSE spread 1 Point
Dep. Protection 50000
Max. Lever 1:20
Min. deposit £ 100
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Risk warning: Capital can be lost. Terms and conditions apply.
2
of 9 Spread Betting Broker FX Pro
FTSE spread 1.5 Points
Dep. Protection 50000
Max. Lever 1:30
Min. deposit £ 100
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Risk warning: Capital can be lost. Terms and conditions apply.
3
of 9 Spread Betting Broker IG
FTSE spread 1 Point
Dep. Protection 50.000
Max. Lever 1:30
Min. deposit £ 0
Go to Broker

74% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money. Professional clients can lose more than they deposit. All trading involves risk.

4
of 9 Spread Betting Broker Core Spreads
FTSE spread 0.8 Points
Dep. Protection 50000
Max. Lever 1:30
Min. deposit £ 10
Go to IG
Risk warning: Capital can be lost. Terms and conditions apply.
5
of 9 Spread Betting Broker OANDA
FTSE spread 1 Point
Dep. Protection 50000
Max. Lever 1:30
Min. deposit £ 0
Go to IG
Risk warning: Capital can be lost. Terms and conditions apply.

Some final tips before you start

Once you are confident that you are familiar with the platform, you can start trading for real. Your broker will probably have a minimal amount to be deposited and for trades, so check this and make your first deposit. Tips to escape the common pitfalls include:

  • Start small. Your initial investment need not be a huge one, and there are many good reasons for it not to be. Instead, make a smaller, monthly deposit. Consider your first trades as an experiment with small amounts of capital. It’s a good way to bridge the gap between a demo account and the real thing.
  • Start safe. Make your first trades with solid, well-known performers, which will be easier to predict. In the UK, companies that make up the FTSE 100 are good first investments. You can then move on to the lesser-known, riskier companies.
  • The greater the potential profit, the greater the risk. Keep these in balance before risking more than you can afford to lose.
  • Don’t risk too much capital on one share.
  • Set daily targets for acceptable profit and loss, and stop when you reach them.

Remember, stock trading is a long-term investment, so don’t panic if you do not immediately see results.

 

Conclusion:

Conclusion

Starting to trade stocks is a risky form of investment, but the possibility for profit is there, particularly if you are able to make a long-term investment to trading and can avoid the common hazards. Using an effective stock guide and finding a reputable broker are steps not to be rushed. With a broker, look for one with good customer service, as such guidance can be essential in the early days. Some of the risks of stock trading can be avoided by good preparation, so read around the subject as much as possible, look at broker reviews to see which features stand out, and make good use of a demo account before risking any real capital. The world of trading can change fast, so be prepared to keep your learning up to date and your skills honed. To have the best chance of making a profit, you have to be in it for the long haul. The final tip of how to start trading stocks is simply to be patient.

Stocks Highlights