Best Trading Platform for someone on a budget??

miss_perelman

Hi. I'm about to dive into making the odd trade but am getting confused with the amount of info out there. I want a trading platform for someone on a small budget, basically, if one exists? I was thinking of just making a few trades a month if that. Can I risk the cheaper trading platforms??? I also want to know if I should open a Stocks and Shares ISA before I start trading, and move money in and out of that, OR can I wait until I have built a little bit of money up from trading? I.I Customer Support was rather patronising to me just now!, when I asked him some questions. Shame for them, as I was going to go for them! Thanks IN ADVANCE, for any advice!!! 

Another_Saver

What do you want to trade?
With how much money?
And why do want to trade instead of invest?

norsefox

The cheapest option is one of the newer platforms available that operate without commission.  They do so, apparently, in order to attract users to use their CFD offers, where they make their money, and their customers, or at least 74% of them, lose money.
Trading212 offers a pretty attractive platform, is protected by the FSCS, and offers both a GIA and a S&S ISA.

Make sure you DO NOT sign up to the CFD accounts.  It is simply gambling for the majority of users, and with leverage, you can lose money very very quickly.

Generally if you have a small amount to invest, then there is no observable difference between the S&S ISA and the GIA.
The main differences however, are:

1. S&S ISA.  Everything in it is tax free, including all capital gains and all dividends.  The limit per year in deposits is £20,000 across all ISA products (S&S, LISA, cash ISA etc.)  You can only open one S&S ISA per tax year, and can *only* contribute to one S&S ISA irrespective of how much remains in your £20k allowance.
2. General Investment Account (GIA).  Everything in this account is subject to tax, though you have a £2,000 per year allowance for dividends, and an annual £12,300 allowance for capital gains (shared with gains you might make elsewhere).  Also, if you sell more than 4 x your annual allowance in capital gains (£49,200 for this year) then you must complete a self-assessment return, regardless of whether or not you owe any tax.  Also, through the GIA, you'll have access to funds and stocks that are not available in your S&S ISA (see Chinese-related stocks such as NIO etc.)

Personally, I have a S&S ISA with Vanguard where the majority of my investments go into tracker funds.
I separately have a GIA account with Trading212 where I have my own portfolio of around 40 stocks.  I look to maintain, at least for now, a 4:1 ratio between my S&S ISA and GIA funds to limit my exposure.

I have a free share code which you can utilise when signing up (minimum of £1.00 invested).
When using that sign up link you'll receive a "free share" ostensibly "worth up to £100", but most likely to be worth around £10.00.  You will receive it within a couple of working days, and you can sell it immediately and buy shares/or funds elsewhere within the platform.  Of course you can use someone else's link instead of this one should you prefer.

Of course there are many other platforms available, eToro etc. but I am most familiar with Trading212 and Vanguard.

I would recommend you tread carefully, and if you're unsure, there is a virtual account you can use first so that you can become accustomed to the platform before investing any of your real money.

grumiofoundation

There is a referrals board for referring people - please remove your link. 

https://forums.moneysavingexpert.com/categories/referrers

Albermarle

I want a trading platform for someone on a small budget

In your choice of platform , you should also take into account that when trading your small budget will most likely get even smaller. 

 can I wait until I have built a little bit of money up from trading? 

Might be a long wait...........

csgohan4

Trading on a small budget is ill advised. Trade only what you are happy to lose. 

When your trading say 100 pounds and you get 5-10% gain, the gains are not very much sadly for that much effort. There will be costs to selling those shares and buying as well. 

As a note I've seen people sell and buy shares in shares I've bought for total £4 and even less which will be futile as the costs to buy or sell is prohibitive. 

Best to to get your emergency fund first and fill up your premium bonds allocation and then consider passive investing

wmb194

csgohan4 said:

As a note I've seen people sell and buy shares in shares I've bought for total £4 and even less which will be futile as the costs to buy or sell is prohibitive. 

You'll still have to pay stamp duty where it's due but not if you use zero commission brokers like Trading212, Freetrade and apparently etoro.

norsefox

csgohan4 said:

Trading on a small budget is ill advised. Trade only what you are happy to lose. 

When your trading say 100 pounds and you get 5-10% gain, the gains are not very much sadly for that much effort. There will be costs to selling those shares and buying as well. 

As a note I've seen people sell and buy shares in shares I've bought for total £4 and even less which will be futile as the costs to buy or sell is prohibitive. 

Best to to get your emergency fund first and fill up your premium bonds allocation and then consider passive investing

There are no costs (beyond your own time) for buying and selling shares on the zero-commission platforms, of which there are a few to choose from.
Starting with small amounts, whilst unlikely to provide significant returns, is also low risk and so a good method in order to evaluate your ability to traverse the vagaries and difficulties of the markets.
As with regards to time, well, if it's considered a hobby or enjoyable then the time spent isn't particularly relevant.

Alexland

Yes if you are going to probably lose money trading if might be better doing it in a smaller way on a zero fee platform.

Thrugelmir

norsefox said:

csgohan4 said:

Trading on a small budget is ill advised. Trade only what you are happy to lose. 

When your trading say 100 pounds and you get 5-10% gain, the gains are not very much sadly for that much effort. There will be costs to selling those shares and buying as well. 

As a note I've seen people sell and buy shares in shares I've bought for total £4 and even less which will be futile as the costs to buy or sell is prohibitive. 

Best to to get your emergency fund first and fill up your premium bonds allocation and then consider passive investing

There are no costs (beyond your own time) for buying and selling shares on the zero-commission platforms, of which there are a few to choose from.

Stamp duty will be paid on UK shares where it is due. When buying fractional shares will be embedded into the price. As trades will be aggregated. Likewise local charges/taxes on the purchase of foreign shares where applicable. 

barnstar2077

Trading on a small budget would seem like an oxymoron to me.  Invest in some well chosen funds for the long term instead.  It's not as cool or interesting, but it is sensible and more likely to be successful.