How to Start Trading Stocks Online in the UK

Trading stocks online has never been more accessible. Whether you’re looking to build long-term wealth or take a more active approach to the markets, trading stocks online in the UK is something that can be started from your home, often within minutes. However, while access has improved, success still depends on knowledge, discipline, and strategy.

This guide is written to walk you through the process step by step — covering everything from choosing the right platform, understanding how the markets work, to actually placing your first trade.

What Is Stock Trading?

Stock trading involves buying and selling shares of publicly listed companies with the goal of making a profit. Unlike long-term investing, trading often implies shorter timeframes and more frequent buying and selling based on price movements, technical indicators, or news events.

In the UK, you can trade shares of companies listed on the London Stock Exchange (LSE), AIM (Alternative Investment Market), or even international markets such as the NYSE or NASDAQ through most online platforms.

Step 1: Learn the Basics of Stock Market Trading

Before risking any money, it’s crucial to understand how the stock market works.

What Are Stocks?

Stocks (or shares) represent ownership in a company. When you buy a stock, you’re buying a slice of that business. If the company performs well, the value of your shareholding may rise. Some companies also pay dividends, offering a portion of profits to shareholders.

How Does Trading Differ from Investing?

Investing is generally long-term, based on company fundamentals and future potential.
Trading is more short-term, based on price action, market sentiment, and timing.

Trading can take several forms:

Day Trading – Buying and selling within the same day
Swing Trading – Holding for days or weeks
Position Trading – Holding for months, but still with a trading mindset

Step 2: Choose the Right Online Trading Platform

The next step is to choose a stockbroker or trading platform. In the UK, there are a number of regulated and trustworthy platforms that cater to beginners and experienced traders alike.

When choosing a platform, consider:

1. Fees and Commissions

Some platforms charge a flat fee per trade (e.g. £5.99), while others are commission-free but may have wider spreads or FX conversion fees.

2. Market Access

Do you want to trade only UK stocks, or also US and European markets? Check if the platform offers access to international markets.

3. User Interface

Is the app or website easy to use? Beginners should look for simple, clear layouts.

4. Tools and Resources

Does the platform offer educational tools, research, and real-time data?

Popular UK Trading Platforms:

Hargreaves Lansdown – Trusted, beginner-friendly, but relatively high fees
Freetrade – Commission-free trading on UK and US stocks
Trading 212 – Commission-free, with fractional shares and advanced features
AJ Bell Youinvest – Good for ISAs and long-term investing
IG Group – Better for more active traders with charting tools
eToro – Offers copy trading and a social platform for beginner traders

Step 3: Open and Fund Your Trading Account

Once you’ve selected your broker, opening an account usually involves the following steps:

1. Register

Provide your personal information, National Insurance number, and complete a few financial suitability questions.

2. Verify Your Identity

Upload proof of ID (e.g. passport or driving licence) and address (e.g. utility bill or bank statement).

3. Deposit Funds

Transfer money into your trading account using a bank transfer or debit card. Some platforms may take 1–3 business days for funds to appear.

Step 4: Understand the Types of Orders

When you’re ready to place a trade, you’ll be given a few order types:

1. Market Order

Buys or sells immediately at the best available price. Simple but not always precise.

2. Limit Order

Buys or sells only at a specific price or better. Gives more control, especially in volatile markets.

3. Stop Loss Order

Sells a stock automatically when it falls to a certain price. Useful for risk management.

For beginners, starting with market and limit orders is usually sufficient.

Step 5: Do Your Research Before Trading

Never buy a stock blindly. Make time to research the company and the broader market.

What to Research:

Company Fundamentals – Revenue, profit, debt, future growth
Recent News – Has the company recently announced earnings or new products?
Technical Analysis – For traders, charts can show support/resistance levels and trends
Sector Trends – Are other companies in the same industry rising or falling?

Useful websites for research include Yahoo Finance, Google Finance, Morningstar, and company investor relations pages.

Step 6: Start Small and Practise

If you’re brand new, it’s wise to start with a small amount of capital. Many platforms also offer demo accounts where you can practise trading with virtual money before risking real funds.

Starting with a few hundred pounds and making just a couple of trades can help you get comfortable with how prices move, how orders are filled, and how your emotions react to gains and losses.

Step 7: Create a Trading Plan

Trading without a strategy is like sailing without a compass. A proper trading plan should include:

Your financial goals – Are you trading for income, growth, or experience?
Risk tolerance – How much are you willing to lose per trade? 1–2% is a good rule
Entry and exit rules – What triggers your buy or sell decision?
Review process – How often will you evaluate your performance?

Stick to your plan and avoid emotional decisions.

Step 8: Learn to Manage Risk

Risk management is essential in trading. Even professional traders lose money on some trades — the key is to keep those losses small.

Risk Management Tips:

Never invest more than you can afford to lose
Use stop-losses to limit downside
Diversify — don’t put all your capital into one share
Avoid chasing stocks that have already risen rapidly

Understanding your own psychology is also important. Many traders struggle more with fear and greed than with actual analysis.

Step 9: Consider Tax Implications

In the UK, trading profits may be subject to Capital Gains Tax (CGT). However, the first £3,000 of gains in a tax year (as of 2025) is tax-free. Profits above this threshold are taxed at 10% or 20%, depending on your income level.

To avoid tax on gains and dividends, consider using a Stocks and Shares ISA, which allows you to trade up to £20,000 per year (subject to annual ISA allowance) without paying tax on gains or income.

Step 10: Keep Learning and Improving

The markets are always changing, and the best traders are lifelong learners. Read books, listen to trading podcasts, follow credible financial news outlets, and track your own performance.

Recommended books:

“The Little Book That Still Beats the Market” – Joel Greenblatt
“Reminiscences of a Stock Operator” – Edwin Lefèvre
“A Beginner’s Guide to the Stock Market” – Matthew R. Kratter

Final Thoughts

Trading stocks online in the UK is more accessible than ever, but it still carries real risk. The rewards can be significant — not just financially, but also in terms of building your financial knowledge and independence.

Start small, stay disciplined, and focus on consistent learning rather than overnight success. Whether you want to become a part-time trader or simply explore it alongside long-term investing, stock trading can be a rewarding journey when approached with care and strategy.