Share Trading in the UK: How to get started?

It is no secret that the UK share market is booming, with more and more people looking to invest their hard-earned cash into stocks and shares. However, for those who are new to the world of trading, it can be a daunting prospect. 

This article will provide you with all the information you need to get started on your journey to becoming a successful trader. We’ll cover everything from selecting what stocks to buy, to how to protect your investments.

So, whether you’re a complete beginner or an experienced investor, read on for some essential tips on trading in the UK.

What is Share Trading?

Share trading is a form of investment where you buy and sell shares or stocks in publicly listed companies. You can either do this through a stockbroker or online via a share dealing platform.

When you trade shares, you hope that the price will go up so that you can sell them at a higher price than you bought them for. However, there is always the risk that the price could go down, and you may end up losing money.

If you are thinking of starting share trading, here are some tips to help you get started:


Research and gather knowledge

Before buying any shares, it is important to do your homework and find out as much as you can about the company. What products does it sell? What is its financial position? How has the share price performed in the past? Make use of free trading charts and tools to find the best-performing shares.


Build a strategy

Decide what kind of share trading strategy you will follow. You could, for example, decide to trade on a short-term basis and make quick gains by buying and selling shares quickly. Or, invest in companies with promising growth prospects over the long term. 


Open an account

Once you have chosen a broker, you will need to open an account and deposit some money. This will give you access to the share market and allow you to start trading.


Get started

Now that you have all the basics, it’s time to start trading. Remember to always use a limit order when buying shares, and never invest more money than you can afford to lose.


Always use a limit order or stop loss

When buying shares (or CFDs on shares), it is important to use a limit order. This means that you will only buy the shares at the price you specify. This will protect you from accidentally buying shares at a higher price than you intended.


Don’t invest more money than you can afford to lose

Share trading is a long-term investment, and there is always the risk that you could lose money. So, it is important not to invest more money than you can afford to lose.


Be disciplined

Share trading is a long-term investment, so you need to be prepared for fluctuations. Don’t jump on any bandwagon and try not to get carried away with your emotions if things go wrong or right quickly. If something doesn’t feel right, trust your gut feeling and don’t be afraid to pull out.

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How Can You Start Trading in the UK?

  • You can start with a standard share dealing account. This allows you to buy and sell shares, but may only offer limited services. However, there is no minimum deposit required.


  • If you do not want to opt for a standard share dealing account, try CFD trading instead. CFDs, or Contracts for Differences, are a flexible way to trade shares in the UK. This is because you do not actually own any of the shares that you invest in, and therefore there is no need to buy them upfront. With CFDs on shares, all you have to do is open an account and deposit some money. You can then start trading immediately.


  • If you want more specialist trading tools like live streaming of market data then choose an active trader’s account where the minimum deposit is £500 (plus charges);


  • If you’re a beginner, or want someone else to make the investment decisions for you, then opt for a fund supermarket account. Fund supermarkets offer a wide range of funds (including shares) and usually have low charges;


  • You can also use an online share dealing platform that offers commission-free trading.


Tax Treatment of Share Trading Profits in the UK: Actual Shares vs. CFD

Tax treatment can differ depending on what type of investment you are doing. The UK government has taken steps to reassure the public that share trading profits will be treated in the same way, regardless of whether it is shares or CFD trading. 

When it comes to taxation, there are two types of investment: capital gains and income. Income is taxed as you earn it, whereas capital gains tax (CGT) is only payable when you sell an asset for more than you paid for it. The current CGT rate in the UK is 20%, although this may change in the future. 

For most people, shares will be considered a capital asset. This means that any profits made from selling them will be subject to CGT. However, there are some exceptions – such as shares received as part of an employee share scheme or those held in an ISA (individual savings account). Profits from CFD trading would also be treated as a capital gain, assuming the CFDs are being used to speculate on the price of a capital asset.


Share trading in the UK can be a great way to put in some good investment, but it is important to remember that there is always risk involved. Do your research before you invest, and choose a broker that fits your needs. Be patient and don’t get carried away with your emotions; if something doesn’t feel right, trust your gut feeling and pull out.

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