Best Trading Apps Compared: Top Picks for Every Trader

The Financial Conduct Authority (FCA) authorises and regulates the UK trading apps available – but not all of them are regulated.

Besides ensuring fair competition among brokers, the FCA also protects the traders. Back in 2015, for example, it introduced negative balance protection, which doesn’t allow a trader’s balance with a stock trading app to drop below zero.

If you prefer an FCA- approved trading app, you also get a free insurance policy. The government set up the Financial Services Compensation Scheme (FSCS) that covers your losses for up to £85,000 if anything goes wrong with the broker you choose.

With FCA regulation, you also get access to the Financial Ombudsman Service (FOS). If you ever feel like you’ve not been treated fairly and couldn’t settle the issue by contacting customer support, you can make an official complaint.

Online trading comes with many different forms of variable charges that change from one provider to another and one asset to another. It can get quite complicated to work out how much you’ll pay. Here’s a breakdown of common charges you’ll see so it’s easier to compare:

• You pay commissions per trade when you buy and sell an asset. It’s common among the best stock trading apps in the UK to charge a flat fee, ranging from £3.95 to £11.5. You’re also likely to see a percentage fee as well – it usually hovers below 1%.

• Spread is usually used for leveraged products like CFDs or spread betting. It’s the difference between how much you need to buy an asset, and how much it actually costs.

• If you are planning on buying foreign shares, you fancy a Tesla or Apple stock, for example, you’ll have to convert your pounds into dollars (or any native currency). The stock trading app would do it for you, but there’s a foreign exchange fee that ranges from 0% to 1% that goes on top of the currency exchange rate.

• If your trading account remains dormant for a while, you might be hit with inactivity fees, which can be anywhere between £8 to £20 a month.

• There can also be withdrawal or deposit fees, annual admin fees, or fees for holding your investments, known as the custody fee.

Many stock trading apps today advertise their services as “free trading” just because they waived the commissions – but that’s hardly the case. Pay attention to the additional trading and non-trading charges from the get-go to avoid unpleasant surprises later on.

How Much Money Do You Need to Get Started?

You need to consider three main variants when deciding how much you need to get started with trading:

1. The minimum deposit requirement of your preferred trading app. Many discounted brokerages like Trading 212 or Freetrade don’t require more than a few pounds to start trading. On the other hand, some established firms like Saxo Markets may ask for hefty amounts (£500). There may also be the case when a few of the best stock trading apps may ask for higher limits for different forms of payment. IG, for example, requires £250 for card payments.

2. The asset you wish to trade. How much does your preferred asset cost? If some stocks are too unattainable at the minute, you can try your chances with fractional shares (units of a share, cost around £1 or £2).

3. How much you can put forward. Remember that when trading, nothing is guaranteed. Your capital is always at risk and you may end up losing your initial investment. So, a thumb rule is to never trade with more than you can afford to lose.

If your personal circumstances, the asset you wish to buy, and the requirements of your chosen stock trading app allow it, you can start with as little as £100. But in the long run, it’s not advised to trade with such capital. Here’s why:

Let's say you have £100 and you want to trade stocks. You find a stock that you think is a good investment and decide to invest all £100 in it.

Unfortunately, the stock experiences a sudden drop in value, as it happens from time to time, and you end up losing 50% of your investment. Only £50 remains from your £100 now.

Now, in order to recover your initial investment of £100, the stock needs to increase by 100%, which can be quite difficult.

As you can see, small capital can limit your ability to manage risk and recover from your losses. If you are an absolute beginner with small capital, it may make sense to try your chances with fractional shares (as offered by Trading 212 and Freetrade) or try your luck with cheap penny stocks under £1. This way, you can spread your investments across different companies with only a few pounds.

The main thing you can do with stock trading apps is to directly invest in assets like stocks, bonds, funds, commodities, or cryptocurrencies. We tend to prioritise stock trading apps that offer a variety of options to trade as they offer greater flexibility for branching out and having a balanced portfolio (the collection of your assets).

Stocks and Shares

Stocks represent a small unit of a company. When you buy a stock, you become a part-owner of the company. As the company grows in value, so does the price of the stock. But other things, like what investors think of the company, its industry, and the economy as a whole also affect stock prices.

For example, if tough times are ahead and investors don’t believe that the company management is up for the challenge, they may sell their shares. This results in a decline in the stock price.

That’s why it’s important to keep an eye on the financial health of the company. The best trading apps usually combine their trading services with substantial market news coverage. With established apps like Saxo Markets or IG, you get expert insights that you can access through your account, penned by their in-house team of analysts.

If you are just starting out and wish to focus on stocks only, it makes sense to go with a low-cost, intuitive app like eToro or Trading 212. Both are among the best stock trading apps for beginners. They also offer a demo account so you can test out your knowledge and the app without committing any money.

Mutual Funds and ETFs

Both mutual funds and ETFs represent a collection or “basket” of assets. A team of financial professionals manages these funds. When you invest in a fund, you don’t actually own the assets. The fund itself owns the assets and you own a share in the fund. When the assets under the fund’s management do well, the value of your share in the fund also increases.

Mutual funds are more actively managed and come with higher costs. They are not traded on the stock exchanges – you can only buy and sell a fund once a day. They typically have high minimum investments, which can range from £500 to £10,000, or even more.

Exchange-traded funds, on the other hand, are much more accessible. They are arguably the cheapest form of funds. Some are actively managed and follow a certain industry, like the best automaker companies, while others are more passively managed and follow a certain index, like the top 100 companies in the UK (FTSE100).

You can trade ETFs like stocks, and the majority of stock trading apps help you do so. Mutual funds, though, are not as common. You’ll see some big investment companies like Vanguard and Fidelity have their own funds – but you don’t have to invest in them using their services. You can find them on cheaper apps like Fineco Bank. Fineco also has a good collection of ETFs and robust research tools that help you refine your search. Make sure to check our top ETF picks for UK traders before you begin investing.

Forex

Forex trading is just swapping one currency for another, like pounds for euros. You try to make money out of price swings. There are over 180 currencies in the world, meaning that you’ve got a world of opportunities.

The forex market is huge; it's the largest financial market in the world. International politics as well as local events affect the currency exchange rates constantly. Some currencies, like the US dollar, are more stable than others, like the Indonesian rupee. While volatile currencies offer great opportunities to make money but are also very risky.

For this reason, you need to keep an eye out for events that can affect the forex market to make informed decisions. Best forex trading apps usually come with quality news coverage and insights from specialists – and a few do it like Saxo Markets. Besides a far-reaching arsenal of technical analysis tools like advanced charts, it also covers related market news extensively, and you get loads of valuable insights from its team of financial analysts.

If you are just starting out, though, eToro is the best forex trading app for beginners. The application is very easy to use and supports a straightforward pricing structure. So you won’t be confused when getting up to speed. Plus, you can follow more experienced traders to get some inspiration.

Cryptocurrencies

Crypto assets were originally designed as an alternative for replacing cash – but it doesn’t look like it’ll happen soon. As of now, they make pretty good investment vehicles for some traders.

To explain it briefly, cryptocurrencies are tokens or coins that help blockchains operate. Every blockchain has its own coin, but other companies also launch their own. You can trade cryptocurrencies using specialised cryptocurrency exchanges, or alternatively with some trading apps.

Cryptocurrencies have little practical value to us but speculation and market sentiment (what investors think about coins and the industry at large) largely drive their value. Although it’s a growing market, it’s also still relatively small. Combined, these lead to dramatic price swings in cryptocurrencies.

eToro, Fineco Bank, and Saxo Markets are among the best UK trading apps that allow you to buy and sell cryptocurrencies. All of them have a wide range of coins listed and trading fees are not very steep.

Commodities

The physical goods that we consume, like energy, metal, or livestock are called commodities. Experienced traders usually invest in commodities to diversify their portfolios. This is mainly because the price of commodities usually behaves differently than other assets, most notably stocks.

Gold prices, for example, tend to rise when stock prices decline. So they make a good way of offsetting losses when prices of other assets go down.

Traders usually use derivative products to trade commodities, like options contracts or CFDs (more on this below). But you should be very careful when betting on commodity prices as they can also be volatile. Capital.com is among the best commodity trading apps. It has reasonable fees and a solid collection of commodities to choose from.

Alternatively, you can indirectly trade commodities using the stocks of commodity-producing companies or commodity ETFs (they track the prices of one or more commodities). Degiro is a great option to do so – it has a wide range of offerings and provides no-commission stock and ETF trading.

The majority of stock trading apps in the UK offer CFDs, spread betting, and options contracts – all of them are called derivative products. It is because they derive their value from underlying assets such as commodities, stocks, and so on. Sounds complicated? Let’s break it down.

Derivatives are contracts. When you trade with derivative products, you essentially buy and sell contracts. Using these contracts, you can speculate on the price direction of an asset (whether the price will go up or down).

In other terms, they are distinctly different from directly trading assets: when you trade derivatives, you don’t actually own the asset, but you are just placing a bet on its price movement.

CFDs, Spread Betting, and Options Contracts Explained

An options contract, as opposed to CFDs and spread betting, gives you an opportunity to buy the asset eventually. But when you buy an options contract, you don’t own the asset right away.

Say that you predict the Apple stock will increase from £120 to £150 soon.

• You can enter a CFD contract and speculate on the price rising. You will pay the stock price (£120) initially. If the price rises like you thought it would, your broker will pay you £30 difference. If it doesn’t, you pay the broker £30 (or the amount will be deducted from your account balance).

• Trading spread bets works similarly to CFDs. The main difference is that CFDs have no expiration date – you can keep the position open as long as you want. However, spread betting does have an expiration date. It closes automatically when the time’s up.

• An options contract gives you the right, not the obligation, to buy Apple stock at a pre-specified price. When you enter the contract, you specify a price – this is called the strike price. Say that you said the strike price will be £130, and the Apple stock increased in value to £150 as you predicted. The contract allows you to buy the stock at the strike price of £130. But you don’t have to. If the price doesn’t increase as you thought it would, you can just abandon the contract.

For a deeper look, check our guides on the best CFD brokers and spread betting platforms available in the UK.

What is Leverage?

Leverage is the money you can borrow from your broker. It increases your buying power.

Imagine you have £10,000 to trade with. If the stock trading app gives you 5x leverage, this increases your initial investment to £50,000. If you are in a CFD contract, for example, and the price moved 5% in your direction, you’ll end up making £2,500 instead of £500.

While leverage can magnify your wins, it also magnifies your losses. Similarly, if the price moved 5% in the other direction, you will lose £2,500 instead of £500.

Every leveraged trade has a margin requirement. It’s the minimum amount you have to pay to benefit from leverage. It essentially works like collateral for the broker. It changes from one asset type to another.

The best leverage trading apps in the UK include IG and Capital.com, both offer a maximum of 30x (increases your initial investment by 30 times). They also have pretty low margin requirements.

You can also get access to different sorts of accounts with stock trading apps. The most common ones are individual savings accounts (ISAs) and self-invested pension plans (SIPPs) along with regular trading accounts.

ISAs and SIPPs are often referred to as tax wrappers because they have pretty good tax advantages. Using these accounts, you can trade with any asset you like (or whatever your stock trading app includes).

You can buy and sell these assets as you’d be using your regular accounts, but you won’t pay any taxes on them to a certain extent. One of the major downsides is that you can’t use derivative products like CFDs or spread betting. It’s because these are government schemes – and the government deemed leveraged products too risky to be included in these.

• For the ISA accounts, the government sets an annual allowance at the beginning of each tax year. As of this writing, the amount is currently at £20,000. As long as you don’t invest more than this amount in a year, anything you gain from these trades is exempt from stamp duty and capital gains tax.

• SIPPs are a bit different. Most people can contribute as much as £60,000 in a year. If you are a basic-rate taxpayer (earning below £50,270 per year), you get a 20% tax relief. This means that for every £80 you contribute, they add a free £20.

  If you are a higher-rate taxpayer (earning over £50,270 per year), you still get 20% and another 20% in your tax returns. So, if you contribute £10,000, the government still adds £2,000 automatically, and you can claim an additional £2,000 from HMRC by filling out a self-assessment tax return.

• A general investment account (GIA) is the good old standard account you can open with any stock trading app available in the UK. It doesn’t have any tax benefits or anything special. You can, though, trade derivatives as much as you like.

The best thing is, you can have all three at once. If you like to trade both CFDs and the assets directly, we recommend that you do so with a GIA and an ISA, respectively. This way, you can protect a big chunk of your gains from being salted away with taxes (as you don’t pay Stamp Duty with CFDs but have to pay capital gains tax).

You can also automate your trades using stock trading apps. It includes setting up conditional entry and exit positions (opening and closing a trade) and could look like this:

Let’s say that you want to buy or sell a certain stock when it reaches a certain price. But you’re not able to monitor it at all times. So you set up an algorithm that will monitor the price and place the trades for you.

• You can set up the algorithm to buy the stock when its price drops to £50. When it hits the target, it will automatically buy it for you.

• Similarly, you can have it to sell the stock for you. If the stock price jumps from £50 to £60, it will automatically sell it and you can lock up the £10 profit.

• You can also set up certain limits so that you don’t lose too much. Say that you set your limit at £45. The bot will sell the stock when it reaches that price and limit your potential loss (in case the price keeps dropping).

This is the main logic of automated trading, but you can set more sophisticated parameters as you get up to speed.

The majority of trading apps use software called MetaTrader for trading automation. You don’t have to be a programmer to use this software – you can simply set your parameters and programs called Expert Advisors (EA) will monitor the markets and execute your trades for you.

IG and Saxo Markets are among the best algorithmic trading platforms as both have access to the popular app MetaTrader 4 and offer low-cost trading. You can simply download MetaTrader 4 from App Store or Google Play, and link your preferred stock trading app to begin automating your trades.

If you are a newbie, there are some more beginner-friendly ways of automating your trades.

What is Copy Trading?

Using a copy trade tool, you can automatically copy the trades of your favourite trader.

Say that George is a very successful trader, and his personality is similar to yours. You like the assets he chooses, how much risk he takes, and how he times his orders (when he buys or sells assets). You want to follow his footsteps, but you can’t just monitor him all the time.

With copy trading, you can set up your trading account to do exactly what George does. And if he ever takes a downturn, you can simply stop.

Stock trading apps with a focus on social trading usually offer copy trading functionality. Social trading apps have feeds and networking capabilities that allow traders to interact with one another, exchange tips and ideas, and learn from each other’s trading behaviour.

eToro is by and far the best social and copy trading app available in the UK. You can easily filter and find traders to your liking, add them to your watchlist, and converse with them on numerous social feeds found on every asset page.

Your experience level largely determines what you’ll need from a trading app. Here are some areas you can consider.

Once you decided what you’d like to have on your trading app, you can narrow down your search by eliminating unauthorised brokers, or the ones that lie outside your budget. Check the FCA registry before you opt for any service, and compare all the costs involved.

It’s also wise to check review aggregators like Trustpilot to gauge what’s the user experience like in the long term. See how a broker responds to customer queries, or whether they respond at all. It’s a great way to understand how dedicated they are to customer satisfaction.

You should also be confident that your stock trading app will provide the best service in the long haul. To assess the long-term reliability of an app, head to the App Store, Google Play, or any store you download apps from, and see how often they release bug fixes and performance improvements.

Trading 212, for example, has an incredible mobile app – this is largely because they prioritise mobile products in development. If you look at the version history, the app receives at least three improvement runs a month. Apps that receive regular usability improvements usually keep pace with the development of operating systems, and have a more consistent UI and minimal downtime.

When you narrow down your search, test out the shortlisted trading apps thoroughly. The best way to do so is to run through a free demo account (also called paper trading). Consider how easy it is to navigate the application, whether there’s any downtime, and see if it buffers during actions at all.

You should also see how different the mobile app is from the desktop version. The majority of trading apps now have their services overlapping across all devices, but there are still some functionalities missing. eToro’s charting package, for example, is limited on mobile. Or, if you use Saxo Markets, you can’t access its advanced trading platform SaxoTraderPro through your phone.

Test out both the desktop and mobile products and see what functionalities are missing. If there are limited functions on mobile, then assess the problem that may create for you.