The world of online stock trading UK can seem complex at first, but if you have spare cash to invest and are willing to put in the time and effort, share trading online is worth looking into if you're serious about making your money work hard.
Although some savings accounts on the market still offer decent returns, the best online stock trading platforms are always likely to offer the possibility of earning far greater profits.
However, it's important to remember that with the potential to profit comes the risk of losing money too, so you may get out less than you put in at the start.
1. Decide how much money you can invest
It might be tempting to start trading with every spare penny you have in the hope of making a quick buck, but if you're new to online stock trading it's crucial that you only invest what you can afford to lose.
If you locked-away your cash in a long-term savings account, you'd know you wouldn't be able to access it for a number of years - money you want to use to trade stocks online UK with should be seen in the same way, as money you can afford to be without for the duration of the investment.
You should also decide whether you want to invest the money upfront as a lump sum when you first open your stock trading online account, or set up a direct debit to drip-feed cash in regularly.
2. Compare and choose an asset management company
You should compare trade stocks online accounts offered by brokerage firms to find one that provides the service you want.
You may want to pick an account based on whether it charges an annual fee or not, how expensive the frequent trader rate is and what the maximum charge per trade is.
When carrying out a stock trading comparison it's not just the charges that you should consider, but also which markets the company invests in and what opportunities they provide, along with access to its reports and share tips.
Remember, this is your money that is being put at risk, so you should be confident you have picked the right company and online stock trading platform for your needs before even investing a penny!
3. Do your market research!
Buying a company's shares without looking into how it's performed recently and whether it's been in the news - for selling or buying assets, taking over rival companies or being taken over by another company and firing or hiring senior staff - would be fairly foolhardy, as such events could have a big say on how its (and your) shares perform.
It's crucial that you do some background research first, to see what is influencing the market, which organisations are doing well or poorly and if there are any significant events coming up, like product launches or acquisitions, so you have some idea which companies it would be wise to invest in.
Make sure you research the basics of stock trading online, keep up-to-date with market news and read trade press so that you're not going in blind - our action plan How to start investing in shares breaks down the steps you should take to get you started.
4. Start small and work your way up
If you're new to the world of online stock trading it's a good idea to start with small investments, so that you can get an idea of how the industry works and gain first-hand buying and selling experience.
As you learn the ropes and learn about investing in shares, you'll be able to build your way up to bigger investments and hopefully greater future profits.
Just remember that share trading online should be seen as a long-term way to make money, over a period of years, so you need to stick with it to get the best returns on your money.
Our guide Getting started with share dealing is worth a read in order to find out more about trading.