Trading 212 Review: Step-by-step Guide
Updated: Nov 23, 2021
Trading 212 is it the best for you
What is Trading 212?
Trading 212 is an online trading brokerage platform available to more than a hundred countries around the world, including Spain, Australia, Poland and the UAE, as well as the UK amongst many others.
The platform can be accessed online via their online browser based trading suite (or as a chrome extension) and through the Trading 212 app on the Google and Apple Play stores respectively.
Trading 212 provides a platform where a user can trade a variety of securities and assets, from Forex to ETF's, stocks to CFD's & commodities such as gold too.
The platform is registered in the UK & Bulgaria. Founded in 2006, the UK Financial Services Compensation Scheme (FSCS) protects funds of up to £85k and in Bulgaria, the ICF, Investors Compensation Fund securely protects a value of €20,000 made in deposits.
Countries such as China and the US are some of those excluded from the platform at the moment.
Pros vs Cons of Trading 212:
Pros
A simple app design that makes registration, buying and selling trading securities easy for a beginner trader
1000's of stocks, CFD's & ETF's available for trading (including NYSE, LSE & NASDAQ)
Low minimum deposit
Client funds kept separate & covered by the FSCS (Financial Services Compensation Scheme)
Cons
Has stopped taking on new customers due to very high demand
Experienced difficulties in transmitting orders due to the high level of demand recently (Jan 2021) - this may be in relation to reddit activity on r/WallStreetBets
Limitations on leverage offered for retail users
In this article, you will find answers to any Trading 212 questions or concerns you may have. Essentially this article is a Trading 212 review of all things from trading stocks to trading Forex, the Trading 212 fees to the T212 App itself, and much more.
What you will learn:
The objective of Trading 212?
The Trading 212 app upholds a simple objective.
Trading 212 wants to increase the visibility and accessibility for retail traders making the ability to trade much easier for people who may not be able to trade on a large financial scale.
In times gone by, buying a small number of stocks would have been costly with brokers charging hefty commissions that made buying a small amount of stocks difficult to justify.
Well, Trading 212 wants to increase the visibility and accessibility for retail traders whilst reducing the fees that other platforms such Hargreaves Landsdown or Interactive Investor charge. Those fees can amount to as much as £12 per transactional trade.
The idea is to allow anyone with money to spare and a smartphone/computer to trade the same assets as any professional trader could.
Requirements for opening a Trading 212 Account
In order to open an account, you must first and foremost be a part of the eligible countries where the platform is available for use. Secondly you must:
Prove your identity
Prove your residential status
Obviously, there are rules and guidelines in place. They can be found in the Trading 212 T&C’s here
What can you trade?
There are three divisions within the website and Trading 212 app that you can invest in.
Below is a breakdown of where you can trade each of these divisions of the Trading 212 app and website:
Trading 212 Invest – This division of Trading 212 provides investment opportunities within both stocks & ETF’s.
Trading 212 CFD – The CFD division allows for trading of CFD’s, Forex currency pairs, commodities and indices.
Trading 212 ISA – This division of Trading 212 allows for investing in Stock shares & ETF’s (with an added perk of being tax-free on gains made)
At the time of publishing this article, you can invest in Forex pairs such as EUR/USD, GBP/USD, EUR/JPY among many others. Moreover, you can buy stocks such as coca cola, McDonalds, Walt Disney and to be honest the list goes on. Other commodities available to invest in include oil, gold and indices.
Can you trade Crypto Currencies on Trading 212?
Trading 212 no longer allows trading of cryptocurrencies such as Ethereum, Bitcoin, XRP etc
Why has this cryptocurrency ban been introduced?
Trading 212 no longer permits cryptocurrency trading in the UK due to the most recent ban officiated by the FCA.
Check out a short video on why the FCA decided to ban crypto derivatives:
Cryptocurrencies are globally known as volatile entities and the FCA deems that these are not safe for retail traders due to their extreme volatility and unpredictable price movements.
How to use Trading 212
Trading 212 is a user-friendly platform, below is a breakdown of how to trade on Trading 212 Invest, CFD & ISA:
You can invest in one or all of the Trading 212 account types whether that's in the CFD's, Invest and/or the ISA account.
You can trade in one account only or spread your funds across all three, bearing in mind that in the Trading 212 ISA account, a maximum deposit limit is set per tax financial year.
Trading 212 CFD's
When trading CFD’s, traders do not have ownership of the investment, instead, the trader is guessing the direction in which the trade will go and will place a trade on that estimation.
In effect, you are borrowing money to guess which direction the trade will move in and if you guess right, you take the winning profit.
Trading CFD’s on Trading 212 is a risky business unless you know what you are doing.
Otherwise, it quite honestly is essentially someone taking a punt and hoping for the best. Yep, it’s gambling with your eyes closed.
The overwhelming majority of retail traders lose money on CFD accounts. That is not a scare tactic. That’s a fact.
Trading Forex
Trading in the Forex Market (otherwise known as FX or Foreign Exchange Market) is available in the Trading 212 CFD division of the app.
With Forex trading ever more accessible and Instagram Forex 'Millionaires' showing off their 'assets' you could be fooled into thinking making money in forex is as simple a task as pouring cornflakes in a bowl of milk.
Now, of course it is possible but perhaps not as simply as the Instagram dude with the Gucci shades is making out. Making money in Forex can be boiled down to strategising effectively and moving smartly. Whether that's on Trading 212 or a rival platform, many of the basics of Forex trading stay the same.
On the Trading 212 CFD platform, you will be able to trade over 20 different currency pairs including GBP/USD, EUR/USD and a whole bunch of other pairs. Call it ‘Currency Pair Heaven’
A currency pair will show two prices. A buying price for any prospective buyers. A selling price for those who already have invested and want to sell.
You can buy a specific pair at the buying in price. If you have already invested in a currency pair and you want to sell, in this case, you will sell that currency pair later on at the selling price.
Whether you want to sell the currency pair in only a short timeframe after buying in (also known as Forex Scalping) or wish to hold the currency pair until you see fit to sell at some point in the near or distant future, you are allowed to do so in whatever direction you deem is best for your trading objectives.
Trading Forex Fees
In April 2021, a currency conversion fee of 0.15% is going to be introduced within the Forex trading subdivision of the T212 services.
Other platforms vary with regards to fees, Forex.com for example charges various fees, as do many other brokers. Trading 212 will no longer be able to state that it is commission free however it is still (at the time of publishing) one of the lowest fees around in the trading app world.
The Forex fees on Trading 212 are built into the spread and the associated cost is considered to be high averaging 1.4 pips in the spread during peak trading hours.
Trading 212 Invest vs Trading 212 ISA
The similarities between Trading 212 ISA and Trading 212 Invest are:
Both accounts allow for real funds trading with only a £1 deposit
Both accounts offer 24/7 support
Both accounts offer commission-free trading
Both accounts provide instant trades
Trading 212 Invest – The truth:
Trading 212 Invest is a lot more aligned with traditional investing. You can trade for the long haul or partake in the increasingly common modern-day practice of day trading.
All earnings within the Invest account must be calculated & declared in your tax return at the end of the financial year, most importantly any tax due must be paid.
For example, if you invest in a Nike stock, you can sell the stock the same day or hold it until a future date where you want to sell it.
Buying and selling a stock is simple if the following conditions are met:
The market must be open for trading
You must have the funds to buy the stock
The stock must be active in the market (people want to buy and sell)
The stock must not be under any suspensions or in danger of collapsing
When the market is open and available, you can trade most stocks unless there is a suspension, lack of funds on your part or a lack of activity for that specific stock.
If the market is open and there is activity for that stock in the market, you can buy the stock (usually) within an instant.
Trading 212 is a broker at the end of the day and they will place an open market order for you. Once that order has been accepted (qualifying to the above conditions) the stock will be instantly added to your portfolio.
The only reason a stock will not be added to your portfolio or will be unavailable for purchase is if the stock is not enticing traders to actively trade it.
If people are avoiding that particular stock like kids avoid brussel sprouts, a trader will struggle to seal a transaction instantly in either direction, buying or selling.
If nobody wants to trade the stock, it’ll be a struggle to trade the stock. Simple as. Usually when the market becomes active, the stock can be shifted/bought but there's also a possibility that the stock is dying, and will just delist.
Beware though, stocks can become defunct meaning if the company falls into bankruptcy or administration, the stock of that company will fall off the trading exchange making it unavailable for trading. Effectively, the stock goes bust. A dead stock may be referred to as a ‘dead security’ Not something you want.
Trading 212 ISA – The Truth of investing in an ISA:
You can invest in the ISA account in a similar fashion to the Invest account.
The main difference with the ISA account is that any money made via capital gains or dividends will be totally tax-free up. The only limitation is the amount that can be deposited into the account per year.
For the tax year 2020/2021, this amount is fixed at £20,000.
You invest in your chosen shares just as you would in the Invest division of the Trading 212 website or the Trading 212 App. As mentioned, the big difference is the tax-free earnings. Quite a big difference it is too!
Needless to say, this tax-free perk is a perk that will perk up many ears.
Trading 212 Pie Review
Trading 212 has now introduced a 'Pie & AutoInvest' feature.
A Trading 212 pie allows you to invest in stocks and ETF's.
The AutoInvest feature is used to create a custom schedule of deposits for your pies where you add a payment method and investments are assigned automatically, as per your settings.
Your portfolio can include multiple pies, each of which can allocate up to a 100 securities per pie.
A slice of the overall pie will represent one of the securities, either a stock or ETF.
Just like any other feature in Trading 212, investing in pies requires care and attention. If a particular security within your pie plummets, your pie value overall will dampen too and you may have to get ready to eat cold crusty humble pie.
Trading 212 – Is it free?
There are many free aspects to using Trading 212 and they include:
Downloading the app
Zero percent commission on trading in the Trading Invest and ISA accounts
Free share dealing or shareholding in an ISA wrapper
No currency exchange fees (up until April 2021)
Free deposits up until £2000 worth of total deposits are made (after which a 0.7% fee is applied)
Trading 212 fees - Does Trading 212 charge fees?
At the end of the day Trading 212 is a business. The Trading 212 app and the website want you to help them make a buck whilst you are using them to make a buck for yourself.
Whilst undertaking a Trading 212 review, the trading 212 fees, the platform accessibility and future plans must be considered to give a factual review, and the moneymaking side of Trading 212 has to be spoken about.
The way in which Trading 212 makes money is by taking advantages of the buying and selling price of the assets, and in specific, the spreads in between them.
Moving into the future, the trading 212 fee structure will change with a currency conversion fee will be applied starting in April 2021.
Depositing - Trading 212 fees
The first £2000 deposited (whether in a single or a combination of transactions) is fee-free. Once you have met that initial £2000 total, there is a 0.7% charge applicable that shall be added onto the deposit amount.
For example:
If you deposit a £100 after having previously deposited a total of £2000 into your account already, you will be charged £0.70p for that deposit. For that £100 deposit, you shall pay £100.70p.
This charge is only applicable after having deposited £2000 into the account.
Trading 212 currency conversion charge
In April 2021, the trading 212 fee structure is changing. Up until April 3rd charges on currency conversion are and will equate to zero.
Basically, up until the publication of this article there is no currency conversion charge. As of April, this will change, the currency conversion cost applied will be 0.15%.
Trading 212 Invest Account fees
The Investing account within Trading 212 will incur 0.15% currency conversion charge as will be the case across all three account types.
There are two leading factors to consider in a Trading 212 review:
One is that under this account type, there are no overnight charges on open positions unlike the Trading 212 CFD account.
Another equally as enticing factor is that the Invest account type is commission-free as is the ISA account.
Trading 212 CFD Account fees
Any investment made in the Trading 212 CFD account incurs an overnight charge.
Interest is paid daily irrespective of the amount of cash in the CFD account.
Trading 212 ISA Account fees
The Trading 212 ISA account holds one particularly amazing perk. That perk is that the ISA wrapper is tax-free up the amount of £20,000.
This amount is correct as of the 2020/21 tax year.
There are no commissions taken or charges applied on trades being made or reinvesting any dividends in the ISA account, a standout perk some would say. Just as is the case for the Trading 212 Invest account, this account type is also commission-free.
How is trading 212 profitable?
For a trader to be profitable, a trader must make winning trades and invest in stocks that back up the direction you are trading in.
Within the Trading 212 Invest and Trading 212 ISA divisions, a trader buys an asset or stock with the hope that the investment grows in value. If (or when) the stock or asset rises in monetary value, the investment grows too.
With regards to trading CFD’s, a trader will back that a specific stock will grow or drop in price. If correctly guessed, the trader will make money on that correct estimation.
Is the Trading 212 App legitimate?
Trading 212 is London based with regulations accounted for by two international organisations.
In terms of regulations Trading 212 is covered by the Financial Conduct Authority ,FCA, a regulation authority held in the UK. In addition to the FCA, the funds are monitored by the Financial Services Compensation Scheme, FSCS. The FSCS provides protection of funds up to a value of £85,000.
Is using Trading 212 safe?
As long as you take the precautions with regards to your login details for your T212 account and your deposit methods, Trading 212 is a very easy trading broker to use. In that sense, it meets its objective very well. You can set up a two-step login authentication on the mobile app to further secure your Trading 212 account.
Trading 212 enhances its level of funds safety by ensuring that the funds of the company are kept separate to the funds of the clientele.
Considering that the platform is regulated by the FCA, a top-tier organisation, this would suggest that Trading 212 is considered a safe trading brokerage platform.
Let’s put it this way, if Trading 212 was to go bust, the FSCS ensures protection of your funds up to a total of £85,000.
With reference to the FSCS, this is the same authority used by other banks, credit unions and building societies providing they are compliant with the eligibility criteria.
Can I trust Trading 212?
What would users say in a Trading 212 review? Well, the UK Trustpilot (as of 26/03/2021) currently displays a rating of 3.9/5, an average concluded from over 10,000 Trading 212 reviews.
A pyramid scheme refers to a set up that recruits new members and profits from those members. Trading 212 is NOT a pyramid scheme as it is regulated by the FCA & FSCS, both are reputable financial authorities.
Is Trading 212 a good broker for new traders?
In terms of using the app, a beginner who knows his way around a smartphone or a modern computer would be able to get around Trading 212.
Whether Trading 212 is a good broker or platform for a novice is debatable and dependable on many factors.
You should never any trade blindly. Not in the traditional stock market. Not in Forex. Not in commodities. Not anywhere on any trading platform.
Remember, knowledge is power.
A beginner should seek knowledge and learn how the trading world operates. This is where a Trading 212 demo account comes into great use.
Trading 212 Demo Account
The Trading 212 demo account is great for beginners because it allows them to navigate around the app and make trades with fake funds.
Instead of tinkering around with your own money and risking losing it all, the demo account offers an insight into how to use the different functions in the app, how to buy/sell and how to use Trading 212 as an entire platform.
You have to learn before you earn otherwise you will most likely lose a lot of money and learn a lesson you could have avoided.
How much do you have to invest to start trading on Trading 212?
To invest with your own hard-earned cash, a minimum deposit must be made. In the UK, Trading 212 requires a £1 minimum deposit.
Any Truth in the “Learn. Trade. Invest” slogan?
I guess that is subjective. T212 do have a YouTube channel and a website section dedicated to teaching users on how to use their platform.
The wise owl would say that although the resources available through their own channels may be of use, it’s important to gather knowledge from a variety of sources so that the knowledge you have has been verified and checked over multiple times.
Navigating Trading 212
In terms of learning how to use the Trading 212 App, it is pretty straightforward to work with.
If you know your way around a smartphone or a modern computer, you’ll be able to figure out how to use Trading 212 platform easily. It's not a particularly complex platform at all.
The website version does look a bit clunkier but then again you can opt to see a lot more of your portfolio on the screen. You can do a lot more on one screen on a browser versus what is available on the app screen.
As you can see above, on the Trading 212 website, you can compare several charts at once, view your overall profit/loss and make an informed decision immediately with clarity should you want to take action.
On the website, you will have to sell each trade individual BUT as all the charts, portfolio and account balances are on one page, you can close them one after the other on that exact same page.
On the Trading 212 app, if you had two (or more) trades that you wanted to watch closely (especially if they were in the red) you would lose the luxury of being able to see all the charts as shown below:
On the app, you can sell in the same manner as mentioned earlier, however, the ability to see all of the charts becomes unavailable when displaying all of your trades.
You can only open the chart of one trade on the app meaning you will have to go in and out of each trade to see the charts, they will not be available for display in a tiled or tabular fashion as they are on the website browser.
Both platform environments are easy to navigate yourself around, the website offers a bigger better optimised screen view than the other. The app is obviously limited in screen size and portfolio viewing capability due to the mobile app size restrictions.
Can you invest long-term using Trading 212?
In essence, yes. You can keep a hold of your trade as long as the asset you're trading is still available and active in the market, you can sell it when you deem fit.
You can also upgrade your account to a Trading 212 Pro Account should you become a consistently profitable trader. Of course, there are guidelines and stipulations in place that have to be met in order to upgrade.
Someone who started trading last week with fifty bucks is not going to be allowed to upgrade to a Trading 212 Pro Account.
Pros and cons for using Trading 212
Of course there are going to be pro's and cons of using Trading 212. No trading app comes without its drag backs. Trading 212, albeit a very easily navigated and aesthetically pleasing platform, does have some factors on both sides one should take into consideration. A true Trading 212 review most certainly is not complete without a pro's and con's list.
Pros of using T212:
A simple app design that makes registration, buying and selling trading securities easy for a beginner trader
1000's of stocks, CFD's & ETF's available for trading (including NYSE, LSE & NASDAQ)
Offers great tools for chart analysis
Readymade videos and articles online to help you navigate the app
No inactivity fee
You can deposit instantly, and withdrawals can be in your account as soon as the same day via PayPal or the next day via bank account.
This does depends on which bank you are with. If you are a UK resident with a Starling Bank account, withdrawals can hit your account within only 24 hours. Other banks’ processing times will vary.
Cons of using T212:
Cryptocurrency trading is no longer available on the platform
Basic trading news updates without detailed fundamental data analysis
New fees applied (check which fees are being applied in 2021 alongside currency conversion charge)
Recent issues of people not being able to close trades
Customer service is only provided in English
Conclusion: Overall review of Trading 212
Trading 212 is a trading app that requires a scope of knowledge just as any other trading platform would. It's probably best to use the Trading 212 Demo feature so you learn & understand how to use the platform before you pump in your own funds, whether that's £1 or £10,000.
Once you know how to use the Trading 212 app, the next thing is to know what you're doing and it's probably wisest to only invest real money after you've jumped this hurdle.
In terms of a trading platform, Trading 212 is easy to use, aesthetically pleasing and very accessible for the retail trader HOWEVER a newbie trader should consider the risks of trading with actual money before depositing onto the Trading 212 platform.
A confident trader or an experienced would most likely find that Trading 212 is a solid option with many pro's. The deposit and withdrawal times are better or on par with other brokers. The support chat service is available 24/7. The app is free to download. There are many plus sides to using the platform, the main of which is probably the Trading 212 fees structuring such as the commission-free stock trading.
The app is optimised for experienced traders but a great starter, user-friendly app for new traders who want a variety of asset options and a simple platform with an easy to understand fee-structure.
Overall, Trading 212 is a good trading platform, rated 4.5/5 on the Apple Store and 3.9/5 on UK Trustpilot.
Final Statement
Trading 212 is a fast growing trading and investment platform, that shines with it's beginner friendly approach. Having the options of both investment, ISA and CFD trading accounts across Forex, Stocks, Commodities and Bonds makes it an attractive broker choice for all your needs.
Just be aware, as of writing this article on the 31st March 2021, they are not taking on new CFD trading customers due to exceptional demand.
