Guide to Investing with Trading 212 in the UK
Trading stocks and other securities is becoming a standard practice in many homes due to the coronavirus pandemic. This is true especially among the 20s and 30-somethings who can’t get enough of the stock market. To trade stocks, ETFs, mutual funds, forex and others, you need a reliable trading platform. From our research, we came across Trading 212.
What is Trading 212?
Trading 212 is a fintech company that offers a trading platform and app for traders to trade forex, equities, commodities and more. Based in London, Trading 212 provides the first zero-commission stock trading in the UK and Europe. As such, it unlocked the stock market for millions of people.
Founded in Bulgaria in 2005, Trading 212 entered the UK market in 2016 and today, its ranked #1 trading app in the UK. The mobile app has more than 15 million downloads and has also reached the #1 spot in Germany.
Trading 212 is currently registered in Bulgaria, and the Financial Supervision Commission regulates it. In the UK, it’s registered in England and Wales. Its authorised and regulated by the Financial Conduct Authority – registration number 609146.
How Does Trading 212 Work?
Trading 212 offers two products…
- Trading 212 Invest
- Trading 212 CFD
Trading 212 Invest
Trading 212 Invest allows you to trade more than 10,000 real stocks and ETFs. You can start with as little as £1. Trading 212 enables you to purchase stocks and ETFs from popular stock exchanges such as:
- London Stock Exchange
- New York Stock Exchange
- SIX Swiss Exchange
- Bolsa de Madrid
- Deutsche Börse Xetra
While all the exchanges above enable you to trade stocks, not all of them allow you to trade ETFs. Only the London Stock Exchanges, Deutsche Börse Xetra , NYSE and NASDAQ enables you to trade ETFs. Traders can complete all trades with zero commission, unlike other platforms that charge up to £15.
By trading using Trading 212, you can own even the most expensive stocks such as Amazon, Google and Apple. This is thanks to fractional investing, which allows you to build a diversified portfolio with little investment.
Another way to build a diversified portfolio is with AutoInvest. It all starts with a pie that allows you to put your money to work smartly. AutoInvest enables you to create an investment plan that matches your budget and goals. You can deposit funds, invest and reinvest your dividends into your pie automatically.
Trading 212 CFD
Trading 212 CFD allows you to trade forex, indices, stocks and more on all major markets. You can trade stocks such as Apple, Tesla Motors and Lloyds from the comfort of your home. Trading 212 CFD also enables you to trade forex with tight spreads for more than 150 pairs, even at news times.
For commodities such as gold, silver, oil and more and indices, you can trade them all with no commission. These underlying securities are best suited for experienced traders who can afford to take more risks.
When you trade stocks, forex, commodities and others, there are a lot of risks involved. If you’ve no experience, you can lose a lot of money. Trading 212 CFD has transparent trading terms that include:
- Tight spreads and zero commission
- Negative balance protection
- No hidden fees
- Instant execution
- Stop Loss and Take Profit
To start trading with Trading 212 CFD, you need a minimum deposit of £10. There is a currency conversion charge of 0.5%, and traders can trade in dollars, Euros and pounds.
How to Set Up a Trading 212 Account
There are two methods to open an account on Trading 212. The first method is using the website. Head to the Trading 212 website and on the top right corner, click ‘Open Account’ Enter your email and password.
You can then select either the Trading 212 Invest or CFD account option. Create your stock watchlist. You need to know that your stock watchlist gives you a good feel for stocks you’re considering buying. Here are tips for creating a winning stock watchlist:
- Keep it simple – create your watchlist based on current factors
- Keep it fresh – use your previous watchlists to fine-tune your trading in future
- Play favourites – keep an eye on the popular picks
- Start off big – then go small. Have a specific focus and narrow down your choices if necessary
- Scan the market – analyse patterns that indicate higher or lower trend changes plus potential unusual trends
Don’t forget to stay in the know. We recommend checking out the Trading 212 Hotlist.
There is a tab on your Trading 212 dashboard that allows you to build and monitor your portfolio. You can also search for specific stocks and view the company’s financial details, such as price to earnings ratios.
To keep an eye on the latest news and events, the dashboard has a handy economic calendar. If you’re a beginner, some educational videos and tutorials can help you invest in your first stock or forex.
The second method for opening a Trading 212 account is the app. Trading 212 has a mobile app compatible with Android and iOS devices. You can download the Android app from Google Play Store and the iOS app from Apple App Store.
Once you download the app, sign up for a free account. It takes less than 5 minutes.
Trading 212 Fees
Trading 212 is transparent about its fees. First, it does not charge any fees when you deposit funds less than €2,000. If you deposit €2,000 in total and more, Trading 212 charges a fee of 0.7% thereafter. Second, Trading 212 does not charge any withdrawal fees.
Third, when it comes to trading, Trading 212 has zero commission charges. Even when you leave an open position for the next day, there is no charge. But as of April 3rd 2021, traders will incur a 0.15% currency conversion fee.
Trading 212 vs Robinhood
Trading 212 and Robinhood enables traders to trade stocks, indices, commodities, funds, forex and more. The only difference between the two is that Robinhood allows users to trade cryptocurrencies such as Bitcoin. Trading 212 currently does not support cryptocurrency trading.
They all offer zero commission trading. This is a win for investors/traders, especially beginners. Robinhood pioneered the idea of commission-free stock trading, but now it’s a disruptive trend. Brokers worldwide, including TD Ameritrade and Schwab, now offer zero commission trading.
Trading 212 and Robinhood offer learning resources and tutorials. These are beneficial to beginners interested in trading stocks and other securities. You can learn how to place your first trade and other investing basics.
If you want to invest on the go, Trading 212 and Robinhood are great options. They offer mobile apps compatible with Android and iOS devices. You can manage your portfolio, keep tabs on your money and learn from the comfort of your home or hotel while travelling.
Trading 212 allows users to trade up to 10,000 securities, while Robinhood enables you to trade 5,000 stocks plus cryptocurrencies. You can buy and sell Bitcoins, Dogecoin, Ethereum and other cryptocurrencies commission-free, 24/7.
If you’re looking for a trading app with a demo account, a minimum deposit of £1 and zero-commission trading, we recommend Trading 212. But if you want to trade cryptocurrencies and other securities but not forex, check out Robinhood (currently only available in the USA)
Is Trading 212 safe?
Yes, Trading 212 is safe. It’s authorised and regulated by the Financial Conduct Authority. All funds are usually kept in a segregated account and protected by the FSCS. Trading 212 protects your data by implementing the industry’s best practices. They include regular scans and penetration tests.
The company also has a dedicated security operations centre. It analyses and monitors alerts and traffics to protect users in real-time.
Trading 212 Pros and Cons
- Offers zero commission investing
- Easy to sign up
- Has learning resources for beginners
- Allows you to trade over 10,000 stocks and securities
- User-friendly website and app
- Missing live chat and phone support
- High forex fee
Trading 212 is a user-friendly platform for trading stocks and other securities. It has a demo account where beginners can practise trading without the risk of losing their money. Since Trading 212 is available on the app, users can monitor their funds and trades even on the go.
It has a few limitations. For example, Trading 212 does not support cryptocurrency trading. Second, it does not allow short selling, which may be a turn off for traders. All in all, Trading 212 is an excellent web and trading app for beginners and experienced traders.
Want to earn Free Shares? Read our Blog Post on Trading Apps with Refer a Friend Schemes in the UK