6 Ways to Start Trading Online in the UK – Even with a Small Budget

Disclaimer: Online trading is generally legal in the UK. However, it's crucial to ensure you are dealing with regulated providers, especially when trading in financial instruments like forex, CFDs, or shares. The Financial Conduct Authority (FCA) regulates these types of trading in the UK, aiming to protect investors and maintain transparency. 

Online trading is widely embraced in the UK. As of 2025, 100s of thousands of UK residents are active traders. This venture's growing popularity stems from multiple factors, including strong FCA regulation and the availability of numerous credible online trading platforms.

That said, if you're interested in online trading but have never traded before, you shouldn't dive in blindly. You should go slow; rushing in will lead to ignorant decisions and costly mistakes, even if you use the best CFD trading platforms UK.

Here's what you need to do to start your trading career the right way:

1. Choose a Broker with Low Minimum Deposits

While starting out, spend as much time as possible looking for a reputable broker with a low minimum deposit requirement. As a newbie, you'll need to test the waters without spending too much money. You can't do that if your chosen broker has a steep initial funding requirement, like £500 or £1,000. The good news is that plenty of service providers in the UK allow new account owners to start with anywhere from £50 to £200.

Finding a broker with beginner-friendly requirements and depositing a small amount of money will also help you test your chosen platform before committing to a larger investment. When dealing with a new broker, you can't be too sure of how fitting its platform is and whether you'll stick with it. A small deposit will allow you to gauge everything without risking a life-changing amount.

But you should never focus on the minimum deposit alone. That is just one piece of the puzzle. To ensure your money and data are in safe hands, you should vet every trading platform's regulatory status, reputation, and security before signing up.

2. Try Demo Accounts First

After finding a credible broker with a reasonable minimum deposit requirement, don't dive into live trading right off the bat. Open a demo account and use the virtual funds to test your readiness. With a demo account, you can gauge your readiness with real market conditions and practice more if need be, without worrying about taking significant losses.

If you go for a live account without practicing in demo mode, any mistakes you make will come with hefty consequences. For example, you might over-leverage your trades and lose all your capital in one fell swoop. You may also rely on an ineffective strategy you haven't tested, worsening your situation.

Treat the virtual cash at your disposal like real money to get the most out of demo trading. That is the best way to build good habits and prepare for live trading. You will blow your account prematurely without learning if you go too wild and ignore the importance of your demo account.

3. Trade ETFs Instead of Individual Stocks

If you're keen on investing, start with ETFs, not individual stocks. That is advisable because every EFT is essentially a basket with different stocks. A good example is the iShares Core FTSE 100 UCITS ETF, which tracks the FTSE 100, an index with stocks from some of the most respected brands in the UK, including HSBC Holdings, Unilever, and Shell.

By investing in ETFs, you spread your money over a collection of assets, reduce your risk exposure, and increase your odds of earning decent returns. This is safer than buying individual stocks and tying your fate to independent companies. Plus, ETFs save you from commissions and spreads that can accumulate to ungodly levels when you purchase individual stocks frequently.

But don't invest in any ETFs you come across. Some of these securities focus on volatile sectors, so choose carefully. Consider the most crucial factors while picking ideal ETFs, including your investment objective, underlying indices, and expense ratio.

4. Use a Trading App with Educational Features

Trading isn't as easy as some people make it to be. It's a complex venture that requires you to have sufficient knowledge of crucial aspects like how the financial markets work, the basics of fundamental/technical analysis, and proper risk management. This is where education comes in handy.

Find a trading app with a rich collection of educational features, starting with free courses and guides. They will help you understand everything from simple to complex concepts. Trading without sufficient knowledge is extremely risky because, when you're ignorant, you're likely to make poor decisions that can wipe out your capital in a heartbeat.

Don't limit yourself to your chosen trading app's educational features. After exhausting the materials you'll find, join forums and communities where experts share ideas frequently. Also, look for YouTube videos and podcasts that break down complex concepts into bite-sized information.

5. Explore Copy Trading or Social Trading

If you'd like to earn while learning, find a broker that supports copy trading. This feature will allow you to copy different skilled traders and profit when they profit. While leveraging copy trading, you can continue learning and practicing. The best part is you won't have to stop after acquiring sufficient knowledge. You can stick to this strategy and free up time you'd otherwise spend on market research.

Being a member of a community where traders and investors share everything from ideas to strategies will also help you level up and become better at trading. That is why you should consider signing up with a platform that also supports social trading.

While trying to exploit these strategies, do your homework, especially where copy trading is involved. Don't copy any trader who claims to be a guru. Check how long every potential candidate has been trading and their track record. Most importantly, while starting out and copying another trader for the first time, start with a small investment you can afford to lose.

6. Set Realistic Goals and Start Small

Expecting overnight success is the easiest way to set yourself up for disappointment and failure. Online trading is not a get-rich-quick scheme, and traders don't earn guaranteed returns. The financial markets are highly unpredictable. An asset's price might appreciate for a week, only for unexpected news like trade wars to change everything in seconds.

As a beginner, ensure you have SMART goals. Simply put, what you aim for should be Specific, Measurable, and Achievable. It should also be Relevant and Time-bound. Without SMART goals, you will be more likely to take excessive risks, culminating in immense losses. Your odds of making costly, impulsive, and emotion-fueled decisions will also increase significantly.

While setting your trading goals, consider your experience level, risk tolerance, and time commitment. You should also factor in the capital at your disposal. Don't expect to make a fortune from a small amount of money; your returns will match your investment. That said, since you're starting out, you should refrain from risking large sums of money.

Conclusion

Thousands of people try online trading every year. However, over 80% quit within the first two years for a variety of reasons, including unrealistic expectations, poor risk management, and loss of capital. Fortunately, you can avoid their fate and build a successful trading career by paying attention to the tips discussed here.

And remember - becoming a successful trader is like a marathon, not a sprint. You must be patient, learn continuously, and stay consistent through the ups and downs. Most importantly, come to terms with the fact that you will incur more than a few losses and never earn guaranteed profits. If you lose some money, don't panic or try to recoup. Take a deep breath, clear your head, and soldier on.