Choosing a trading app can feel a bit like a freshly hired football coach bracing themselves for a brand new season.
You’re faced with dozens of options, plenty of stats to chew over and no shortage of people telling you which choice is the winner!
The good news is that getting started with investing has never been easier. Trading apps have opened up the stock market to millions of everyday investors, allowing anyone with a smartphone to try out trading, begin building wealth, invest for the future, or simply find out more about how financial markets work.
Open your smartphone's app store, and you'll find all manner of trading apps vying for your attention. You’ll see promises of commission-free investing, ads for advanced tools and banners for getting your hands on real-time market data.
The challenge is picking out the right app to suit you.
In the same way that some footballers fit certain types of team, some trading apps will suit different types of investors. Some apps are built for experienced traders happy to spend hours studying charts and making daily trades. Others are designed for beginners who want a simple, stress-free way to invest regularly.
So before you think of signing up, ask yourself a key question: what is your purpose for trading?
Are you looking to trade regularly in the hope of making short-term profits? Or are you investing for long-term goals such as retirement or building wealth over time? Perhaps you’re simply interested in finding out more about the markets and getting a bit of financial experience with money you can afford to risk.
Your answer will help you work out which app deserves a place in your starting line-up.
Here’s what you need to consider:
Disclaimer: eToro is a multi-asset investment platform. The value of your investments may go up or down. Your capital is at risk. Terms and Conditions apply.
Key summary:
- A red card for the unregulated: Ensure your app is properly licensed.
- Check your charges: Compare how different apps may charge you, from commissions to FX fees.
- Why you should start with simple screens: How a clear, clean layout and swift customer service make a difference for beginners.
- Know what you can buy and sell: Be clear about what investments the app offers.
- Trade and train: Demo accounts and investor guides can help build confidence.
Referee! Why regulation matters
In football, every match needs a referee. With investing, regulation plays a similar role.
Before you weigh up whizzy features, fees or fancy graphics, your first priority should be making sure the trading app you pick is properly regulated.
Regulation helps ensure firms play fair and follow strict rules designed to protect you as a customer. It also means your money is generally kept separate from the company’s own operating funds.
In many cases, regulated trading apps may also offer a safety net via what’s called an investor protection scheme. This means that if the app provider were to fail or go bankrupt, the value of your investments might potentially be protected up to a certain limit. (However, it doesn’t mean you’ll be covered if your investment itself loses value).
As a rule of thumb, you should generally only consider a trading app if it’s fully licensed and overseen by official government watchdogs.
For example, in the UK, it’s the Financial Conduct Authority (FCA); in the US, it’s the Securities and Exchange Commission (SEC); and across the EU, it’s the relevant national competent authority (NCA).
To find out if a trading app is above board, it usually only takes a simple check.
Visit the provider’s website and scroll to the bottom of the homepage. Most legitimate firms display their regulatory info here in a clear message, and may also include a link to the official website.
If you’re not sure and want to double-check, go to your national financial regulator’s website and look to see if the name of the trading app is on its register of authorised investment firms.
If you can’t easily find it, or struggle to discover evidence of regulation from a recognised authority, consider it a major red flag - and steer clear.
Compare charges and fees: the true cost of trading
Football clubs know every pound matters - from wages to transfer fees, matchday tickets to replica shirts, and all the way from club debt repayments to the price of a half-time pie.
Any investor would do well to take the same approach.
Many apps advertise ‘zero commission’ trading, but that doesn’t mean investing is completely free. Every app and trading platform has a business model, and understanding how it makes money is an important part of working out the right provider for you.
Over time, even small fees can chip away at your returns, so it’s vital to understand exactly what - and how much - you’re paying, especially if you plan to trade regularly.
Common charges include:
- Commission fees – The charge applied whenever you buy or sell investments. Many apps increasingly offer low fees or ‘zero-commission’ deals.
- Spreads – This is the difference between the buying price and the selling price of an investment such as a share, exchange-traded fund (ETF) or bond, at any given moment. Some ‘zero-commission’ apps might have slightly wider spreads, which means you may pay a little bit more for the stock than its actual market rate.
- Foreign exchange (FX) fees – If you’re going to buy an investment overseas, you’ll have to pay a fee to convert your currency. For example, if you’re based in the UK or Europe but want to buy US stocks like Apple or Tesla, an app will charge a fee to convert your currency into US dollars.
- Subscription/inactivity fees – Some apps may charge monthly membership fees in exchange for additional features, or a penalty fee if you don’t trade for a few months.
These costs, often a small flat fee or charged as a very small percentage, may seem insignificant. But over many years of investing, they can have a big impact on the size of your returns.
Look for an app that’s open and transparent about its pricing, which makes it easy for you to compare and understand exactly what you’re paying.
Disclaimer: eToro is a multi-asset investment platform. The value of your investments may go up or down. Your capital is at risk. Terms and Conditions apply.
Keep your screens simple at the start
When you first learn the beautiful game, you don’t start by studying complex tactical systems - you begin with the basics to help you play.
It’s no different if you’re new to investing and looking for a trading app.
Many beginners assume the best app might be the one buzzing with the most features, such as flashing candlestick charts and market alerts.
However, an easy-to-use platform with a clean design is likely to be far more valuable to you than one packed with advanced trading tools you’ll hardly use.
A good beginner-friendly app should make it simple for you to:
- Search for investments (e.g. look for a company name, see its share price, and buy or sell
- View your portfolio
- Track its performance over time
- Understand what you’re buying
- Deposit and withdraw money
You should never feel lost trying to complete a straightforward task on the app.
And don’t forget to check for customer support.
If you suffer a technical glitch or one of your transactions is delayed, you’ll likely want immediate help - even if it’s just for a simple question about how your account works.
Look for apps with help centres that offer contact in the way you prefer, whether it’s live chat, email or text, or a responsive team including phone support.
Take a close look at consumer forums that discuss trading apps. Independent user comments can give you an idea of how the company tends to treat its customers when things go wrong.
Your investment options: What can you actually buy?
It’s often said a successful football team needs depth in all areas of the pitch. In the same way, a trading app should be able to offer you enough options to help you take aim at your investment targets.
For most beginners, access to a wide range of global shares, funds, and ETFs is usually a sensible starting point.
In particular, ETFs have proved popular because they allow you to buy a basket of companies in a single investment. This means that, rather than rely on the fortunes of one business, you’re effectively spreading your money across many (often hundreds) of different firms.
Another feature to look out for in a trading app is whether you can buy so-called ‘fractional shares’. This feature allows you to buy a ‘fraction’, or a portion, of an expensive individual share rather than paying for a whole one.
For example, if a company trades at £200 per share (e.g Apple and Amazon have traded at a higher price), fractional investing can allow you to invest £10 or £20 in the company instead. Over time, this lets you build up your shareholding at a rate that suits your finances.
It can make investing far more accessible, especially if you’re a beginner with a modest budget.
Keen to learn? Look for more than just trading
If you’re new to trading and keen to find out more about the world of finance and investing, a number of apps now provide educational content alongside trading tools.
Typically, this might include articles, videos, webinars, market explainers, or interactive guides that help you to understand the basics of investing.
Increasingly, you can also now try out ‘demo accounts’ with a number of trading apps, which let you practise trading with virtual money before risking real cash.
For any beginner, this can be a very useful tool to help build confidence and give a feel for how markets work before you feel comfortable investing greater sums.
Disclaimer: eToro is a multi-asset investment platform. The value of your investments may go up or down. Your capital is at risk. Terms and Conditions apply.
Your capital is at risk. The value of investments can go down as well as up. Past performance is not an indicator of future results. This content is for informational purposes only and does not constitute financial advice.