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Trading in the UK - Best Guide

Trading is a growing skill that people are picking up especially in the UK. Everyone from your friends and family have probably started trading in the UK to some degree... or at least heard of it.


In this article we'll be covering some things you'll need to know about trading in the UK and what you'll need to get started as a beginner or an intermediate trader.

Trading in the UK - Free easy guide
Trading in the UK - Free easy guide

What is trading?

Trading is the action you take when you're buying or selling a financial instrument. These instruments included things like: forex, shares, indices, bonds and crypto... the list goes on! The trader could buy multiple different assets over a set time period to sell at a later date for profit.


Traders take advantage of market movements, it's that simple.


How to start trading in the UK

The best way to get started trading in the UK, you should consider:

  1. Research the markets you want to trade in the UK

  2. Decide on your trading strategy

  3. Pick a regulated and reputable broker to trade the market

The quickest way is to learn about trading and financial markets with Logikfx's beginners forex course to get started on the forex market.


Best markets for trading in the UK

Trading covers a broad area, when people say they're trading it's often associated with specific asset classes or markets. For example, you could be a trader who only trades the forex market or the stock market. On the other hand, you could be trading all the markets.

Eventually the market you choose to trade comes down to a few factors.


This includes what you could be interested in, what you can afford, how much time you're willing to invest into trading and what type of risk appetite you have.


The most popular markets include:

Popular trading markets
Popular trading markets

1. Forex

The forex market is one of the most popular choices when it comes to trading, mainly due to the large amount of currency pairs to trade and the liquidity making it very easy to buy and sell. Traders through brokers will generally have access to both the forex markets, indices and even stocks in one platform.


The forex market is generally less volatile than the stock market making it a great place for beginners and capping risk.


2. Indices

Trading indices is like a trading shares but at a very high level. Instead of trading a single share you're actually trading on a group of shares. For example, the S&P500 is a group of the top 500 public shares in the United States and by trading this you're essentially trading all those shares at one time. This gives you a broader exposure to the stock market as a whole.


One way to trade indices is either through a CFD on a broker platform or even an ETF.


3. Shares

Trading stocks or shares is another very popular market amongst traders and beginners. In the equity market (fancy word for stocks/shares market) there's an endless amount of stocks to choose from and they're grouped in various ways like technology, energy and pharmaceutical.


Similar to indices, traders can use leverage and margin accounts to trade stocks or shares through CFDs or look to buy the actual share using an investing account a broker or bank provides.


The equity market is comparison to the forex market is a lot more volatile so there's a lot more risk but in theory more return.


There's more guides on our wikiHow pages which cover investing in stocks.


4. Crypto

One of the newest markets to emerge is cryptocurrencies... this is the likes of Bitcoin, Ethereum and Ripple. They're essentially digital assets which traders can buy and sell or even spend in certain places. Another growing part of the crypto market is an NFT.


What makes cryptocurrency one of the most dangerous and volatile markets is that there's no real intrinsic value. The value of the digital asset is determined by how much people are willing to pay for it. This makes it a very speculative, unpredictable and dangerous asset to trade.


Since it's a new financial instrument one of the biggest risks is regulation, such as a Government imposing a ban on cryptocurrency.



The 4 most popular trading strategies

Trading itself is difficult and somewhat gambling if you're not following a strategy. It should be treated just like a battlefield, if you come prepared with a plan you'll likely succeed, if you come unprepared you'll likely fail.


Below are 4 of the most popular types of trading on all markets:

Popular trading strategies
Popular trading strategies

1. Trend trading

Trend trading is one type of strategy that's been around for years, traders use this strategy to buy or sell in one direction expecting it to continue for a longer period of time. For example, a short seller in a downtrend will look to sell an asset and hope it goes even further down. These trades will be held for long periods of time, months to years.


Trends can be identified in a few ways such as using technical analysis. If market prices create higher highs then the trader may buy the asset. If the market prices are making lower lows then the trader may sell into the market.


2. Swing trading

Swing trading on the other hand is a type of trading which captures a shorter time period, you could look at it as a medium-term view of the markets which can span over a few days to weeks. This is different to trend traders who may hold their trades for months and maybe years.


Swing traders will most the time use fundamental analysis as well as technical analysis which includes analysing price trends, price patterns and indicators.


Fundamental analysis and technical analysis is covered in our beginner forex course for any new traders.

3. Position trading

Position trading is a less popular but profitable long-term trading strategy. Similar to trend trading a position trader will hold their trade for months or years ignoring their short term price movements and focusing on the fundamental analysis of the long-term trend.


An example of position trading is traders or investors that buy and hold an assets... think of it how your parents or friends buy and hold shares for 10 years.


4. Day trading

Day trading or