Tired of paying large commission fees when trading stocks? If you are, you should carry on reading this Trading 212 review.
Trading 212 is a trading platform built for the millennial investor, with an easy-to-use intuitive interface. It’s an ideal trading platform for the beginner just getting started. One of the major benefits of Trading 212 is its zero commission fees on stocks and ETFs. Plus, you can also start investing with as little as £1 with fractional shares. So you can now start investing in some of the biggest blue-chip companies such as Amazon, Tesla, and Google.
Trading 212 Review
Trading 212 is a London-based brokerage platform that aims to make trading accessible to everyone. The company started trading as Trading 212 in 2006 originally from Bulgaria. Allowing users to be able to trade in a variety of assets including Forex and currencies, gold, commodities, crypto, and stocks across their platform services.
The company originally disrupted the stock brokerage industry by offering the first zero-commission stock trading service in the UK and Europe, unlocking and making the stock market accessible for millions of people. Similar to the likes of Robinhood, in the US.
There are 3 products offered by Trading 212 which are; Invest, CFD, and ISA. These services are available for beginners getting into trading for the first time, all the way through to advanced trades and leverage.
Trading 212 Invest
With Trading 212 Invest you can perform free investing in real stocks, and ETFs (Exchange-traded funds) with zero commission and zero fees.
This service is definitely more aimed at beginners and they have a minimum deposit and withdrawal amount of 1 GBP, 1 USD or 1 EUR. Plus, there are no deposit or withdrawal fees. There are also no currency conversion or commission charges.
Trading 212 Invest is the platform I will be focusing on during this Trading 212 review.
Trading 212 CFD
With Trading 212 CFD (contract for difference) you can trade stocks, forex, indices, and more. All at zero commission and tight spreads. Trading 212 CFD also includes the ability to trade cryptocurrencies such as Bitcoin, Ripple, Litecoin, Ethereum, Monero, EOS, Dash, Neo, and more.
This product has a minimum deposit and withdrawal of 10 GBP, 10 USD or 10 EUR, with no deposit or withdrawal fees.
This is a more complex service with charges for currency conversion and for leaving an open position for the next day but there are no commission charges. There are also quite complicated margin requirements with varying percentages
They also do state on their website that CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Trading 212 ISA
With Trading 212 ISA you can invest tax-free in zero commission stocks and shares ISA.
They have a minimum deposit and withdrawal amount of 1 GBP, 1 USD, or 1 EUR. Plus, there are no deposit or withdrawal fees.
Trading 212 Fees
Unlike traditional brokers Trading 212 is commission-free. There are no fees for deposits, withdrawals, or inactivity fees for the Trading 212 Invest, ISA, or CFD accounts.
Is Trading 212 Free?
Trading 212 adopts a freemium model. Similar to games on mobile apps that are free to download but have in-app purchases. They do this in the hope that some customers will eventually pay for additional services that it develops further down the line. Another feature that they use to attract new users to sign up, is when you sign up using a referral link you’ll receive up to £100 of free stock.
Fund and Data Protection
Is Trading 212 a Scam? Money Regulations
With so many scams, how do you know this platform is safe? Well, Trading 212 is approved by the FCA (Financial Conduct Authority of England and Wales) as well as being registered in Bulgaria and regulated by the Financial Supervision Commission.
Clients’ funds are kept separate from company funds and protected under the Financial Services Compensation Scheme (FSCS) giving you the security of up to £85,000.
Features & Benefits
Trading Cryptocurrencies with Trading 212
You are able to trade cryptocurrencies such as Bitcoin, Ethereum, Ripple, and Monero with Trading 212’s CFD. Although, if you are looking to invest in crypto for the long term I wouldn’t recommend buying or holding crypto on the likes of Trading 212 or Revolut.
When investing in crypto you want to have the ability to gain access to your private keys. Without access to your private keys, you’re not in control and you are therefore relying on a 3rd party. Even the likes of popular cryptocurrency platform such as Coinbase don’t recommend, as they too don’t provide users with a private key. If you would like to learn more, check out my cryptocurrency tutorial to learn more This is because you don’t have access
Practise vs Real Money Trades
Trading 212 provides 2 different types of modes. In the Real Money mode, you are trading with money you have deposited from your account. And obviously, there are risks involved with trading with real money.
Whereas, in the Practice Mode, you are trading with virtual money, simulating market trades without the risk of losing real money. This mode is ideal for both beginners and experienced individuals to practice new strategies and familiarise themselves with the features of the platform. If you lose all the money in Practice you can reset this from the “Settings” menu to any balance up to 50,000.
Everything else is the same.
To switch to Practice, simply click on your email address in the top right-hand corner of the screen and click on “Switch to Practice“. All screens will appear like you are using ‘Real Money’ but you will be in demo mode.
To switch back to Real Money, click on ‘Real Money‘ located under your email address.
Trading 212 Fractional Shares
With fractional shares, you can invest with as little as £1 and own even the most expensive stocks. This could include the likes of Google, Tesla, Amazon, and Apple. Fractional investing helps you to build a diversified portfolio even with a small amount of money.
To check the minimum trading amount for a company, search for the instrument/company and select it.
Then on the right-hand side under “Properties” check out the “Min Traded Quantity”.
How to Get A Trading 212 Free Stock May 2020
Trading 212 is currently running a promotion for new users. When signing with a Trading 212 referral link and depositing as little as 1 GBP, 1 USD, or 1 EUR you can get a free share up to the value of 100 GBP. All you will need to do is open an Investor ISA account and you will receive your allocated free share within 24 hours of making your deposit.
Although Trading 212 states you will receive a free share up to the value of £100, it’s highly unlikely you will receive a stock this high. You’re more likely to receive a share under £10, either National Grid or UnderArmor. I believe the reason is, they don’t want you to just sign-up and cash out your free stock. With the withdrawal limit at £10, you will be just under the threshold. Mind you, at the end of the day, it’s a free stock so you can’t really complain.
You won’t be short of options when it comes to trading platforms. Some of the most popular platforms are Hargreaves Lansdown (I personally use), AJ Bell & Barclays, etc. However, with a new generation of retail investors wanting something different Trading 212, Revolut and eToro are designed for the millennial investor in mind, with their clear, user-friendly platforms.
Trading 212 vs Hargreaves Lansdown
Compared to the likes of Hargreaves Lansdown, Trading 212 certainly comes out cheaper in terms of fees for trades. For example, with Hargreaves Lansdown, you incur admin fees and a charge of £11.95 per trade, which may not sound like a huge amount but if you are regularly trading these can certainly add up.
Trading 212 vs Freetrade
Both Trading 212 and Freetrade are great platforms for free trading and offer the opportunity to trade stocks without paying any fees. Although there are also more stocks and ETFs available on Trading 212 and more restrictions with Freetrade in terms of available markets, customer support, and no card payments are allowed. The Trading 212 platform also has the added feature of the practice or demo mode.
Step By Step Tutorial – How to Use Trading 212
This step-by-step guide will help you get started with Trading 212. From depositing your funds and buying your shares. To selling and locking in your profits and withdrawing.
How to Deposit Funds
You can make payments via bank transfers, credit and debit card payments, Skrill, Google Pay, etc. There are no fees for depositing funds and credit/debit card payments should take roughly 10 minutes. Bank transfers may take up to 2 business days. You can also set up and schedule automatic recurring payments.
To deposit funds into your account, from the web-based platform click on the “Deposit Funds” icon in the top left-hand side of the screen.
Select your payment method by clicking on the “Change” button from Credit/Debit Card, Google Pay, Skrill or Bank Transfer.
Move the slider to the amount that you would like to deposit, select if you would like your payment to the recurring, and confirm your deposit by selecting the checkbox. Click onto “Next“.
Enter your payment details.
How to Buy Stock with Trading 212
If you find a stock that you would like to invest in, search for the instrument/stock using the magnifying glass and select your choice.
From the right-hand side of the screen, select “Buy” under stock info, then using the slider enter the amount you would like to purchase, or alternatively you can click onto. the icon to the right and type in the amount. This could be a whole share or a fractional share.
You can then select from a Market, Limit, Stop and Stop Limit Order.
A Market order will execute immediately at the current price.
Click onto “Review Order” and choose “Send Buy Order“.
How to Sell on Trading 212
If you are ready to sell your stock on Trading 212 and lock in your profits or save any losses, simply hover over your chosen instrument.
Then select “Sell“.
You will then need to select the type of order you would like to place, from ‘Market’, ‘Limit’, ‘Stop’ or ‘Stop Limit Order’.
Enter the amount that you would like to sell or select it from the slider.
Select “Review Order” and when you are happy with the order you can “Send Sell Order“.
How to Withdraw Funds on Trading 212
If you want to withdraw from Trading 212 you can submit a withdrawal request either via the mobile app or the web-based platform. All withdrawals are free, although your bank may charge a fee. Your withdrawal will only be paid out using the same payment method you have originally used to fund your account. To withdraw;
Click onto your email address in the top right hand corner of the screen.
Select “Manage Funds” and then choose “Withdraw“.
All withdrawals are then executed within 2 business days.
Trading 212 Order Types
Within most trading platforms, you find several different order types that you can select from. Although, the naming or terminology may differ slightly the meaning behind each is relatively the same.
Trading 212 Market Order
If you’re new to trading and want to buy or sell your shares easily and quickly you can place something called a market order which is the simplest order type.
With a market order, you are guaranteed that your order will fill, but it can’t guarantee the price at which you’ll get it. Which can come with an element of risk.
A Market Buy Order will execute on the best available asking price.
Trading 212 Limit Order
If you want to buy or sell your shares at a certain price that you define and you aren’t in touch much of a rush, you can place something called a limit order,
With a limit order you can define the price that you’d like to pay for your stock/share and wait for the market to reach that price.
You are able to view the market price but we may want to pay less than that price or sell higher than that price. When trading you simply enter the maximum price you want to buy or sell at into the “Price” section.
Your order will then go into “Pending Orders”. And once the market has reached your price, your order will be filled and shown under your portfolio tab.
Trading 212 Stop Order
If you want to help reduce your losses and sell your shares at the market price once the price hits a certain value (or a stop price). You can place something called a stop order.
With a stop order, you can place an order without constantly checking the markets but only when the market price hits a certain value.
When the stock hits your stop price, the Stop Order becomes a Market Order. And it executes at the best available price. Investors will often place stop orders to help reduce any potential losses, in case the stock moves drastically in the wrong direction.
In the example below, you can say if the price hits 236, you’d like to sell your share with a market order at the best available price.
Trading 212 Stop Limit Order
If you want to buy or sell your shares with precision defining a price you’d like to pay or sell at, but only when the market reaches a certain value (or a stop price), you can place something called a stop-limit order.
A stop-limit order combines a stop and a limit order. Which you can place without constantly checking the markets but only when the market hits a certain value.
When you’re buying with a Stop Limit Order, you place the Stop price above the current market price, and then your limit price above the stop price. This means that once it reaches the stop price, a limit order will execute.
Trading 212 Close Account
To close your account with Trading 212, you need to make sure you do not have any open positions. Then you need to email Trading 212 your request to close your account to [email protected] which they will then complete.
Any funds that are left in your account will be refunded to the same payment method that you used for your deposits.
The Trading 212 Mobile App
Trading 212 is available to access via their web platform. Plus, they also have a Trading 212 app, available on Google Play and the App Store. The mobile trading platform is really easy to use and has a nice look and feel. Although, one clear downside of the app is that it does not support 2-factor authentication, nor face/fingerprinting ID which would add an extra level of security.