Trading 212 Review
You should not invest with Trading 212 until you have read this review. Do you know whether this broker is trustworthy or whether it is a scam? Are you aware of the commissions charged by this broker and the opinions held by its users? The choice of an online broker is an important decision, that is why it is necessary to investigate it beforehand. Today, Plus500 is one of the leading online brokers in 2018 since it does not charge any commissions and since it is properly regulated. But, this is just our opinion, and we would simply like to give you the option of checking out this broker by clicking the button below before continuing with our analysis of Trading 212 (CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 74-89% of retail investor accounts lose money when trading CFDs. You should consider whether you can afford to take the high risk of losing your money).
In any case, although we believe that there are better alternatives, we don’t necessarily think that Trading 212 is a bad broker. Therefore, this review will analyze the strengths and weaknesses of Trading 212 and compare them to those of some its other CFD broker competitors such as AvaTrade, eToro, IQ Option, Libertex, XM.com, CMC Markets, 24 Option, Markets.com iFOREX and BDSwiss. To do this, we will analyze how it is regulated – since this determines a broker’s reliability, the commissions it charges, the demo account it provides as well as the opinions of its users.
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Is it safe? Is Trading 212 a scam?
If you want to avoid scam sites and being scammed by online brokers, you must make sure that the company that you choose to invest with is well regulated. How do you do that? By looking at which regulatory bodies supervise the broker. By choosing a broker which is not regulated, you will run a very high risk of being scammed. Finding and analyzing information about how a broker is regulated can be tedious, but it is essential step in determining a broker’s reliability. That is why this section will summarize this information for you in a concise and enjoyable way, to allow you to make up your own mind.
Most brokers are owned by a larger parent company, and Trading 212 is no exception to the rule. In this particular case, the parent company, Avus Capital, is registered with the CNMV, which is the Spanish regulatory body. Moreover, Trading 212 is regulated within the United Kingdom by the FCA. In addition, and in compliance with EU regulations, Trading 212 complies with MiFID, which, among other things, requires that the accounts containing the funds of the broker’s clients remain separate from those of the company itself – which translates into an increased level of security.
What conclusions can be drawn from all of this? In our opinion Trading 212 is not a scam because it is under the supervision of powerful regulatory agencies. If we compare this broker with companies such as Plus500 or Markets.com, we can see that it is regulated in a similar way, which gives us peace of mind. While it is never possible to affirm such things with 100% certainty, we believe that Trading 212 is a reliable broker.
Now that we have established that Trading 212 is properly regulated, we can proceed to analyze the costs associated with operating on this brokerage platform. While, nowadays, it is possible to find some CFD brokers that do not charge any commissions, Trading 212 is not one of them. Although the fees charged by this online broker are not excessive, it has the serious drawback of charging its users commissions for trading stocks. In the 21st century, paying commissions seems like an antiquated practice – a negative point for this broker. Considering how important it is to have low rates in order to obtain sustainable profitability, our opinion of this broker in this regard is quite negative.
Apart from these commissions, there is another cost called differential or spread. If you have any investment experience, you will surely know that spreads are the difference in price of the same asset. For example, if you trade in Forex, the spread will be the difference between the price that you would be required to pay to purchase a currency pair and the price at which you would be able to sell the pair at the same moment in time. What does all this mean? It means that the ideal solution would be to look for a broker that does not charge any commissions and that offers the lowest possible spreads. While it is true that Trading 212’s spreads are not too bad, we still don’t like the fact that it charges commissions.
If we take a look at the market place in search of alternative brokers that do not charge commissions, it will be difficult to find very many brokers which are better than Trading 212. However, there is one very good alternative which we already touched upon earlier: Plus500. In addition to not charging any commissions, its spreads for Forex, CFDs, stocks and stock indexes as well as cryptocurrencies such as Litecoin, Ripple, Bitcoin Cash, Bitcoin Gold or Ethereum are very low. So, if you are interested in trading without paying any commissions with Plus500, click here (CFD Service. 80.6% lose money).
One of Trading 212’s main features is that its investment software is proprietary. That is to say that it does not use a third party platform such as the famous MetaTrader 4, but rather a platform which it has developed itself. This is an important aspect since it will require more experienced traders to adapt themselves to an entirely new trading platform.
Is the platform any good? In our opinion, it is a high-level platform, offering charts, trading signals, as well as proper stop loss and stop profit options. That having been said, everyone has different tastes, and while some people love it, others hate it. It seems to us like a simple platform that fulfills its purpose. Moreover, it has recently launched the tradebird tool, which is something like a social network for traders in which users openly share their trading operations. While tradebird is pretty good, as far as social trading is concerned, eToro seems much better to us.
We are inclined to conclude that Trading 212’s platform is of good quality. It has all of the conventional characteristics of other trading platforms and can be used to create trading strategies for currencies or other assets thanks to the charts that it makes available. At any rate, the assessment of the platform’s usability and quality are somewhat subjective, and opinions will vary in this regard.
Trading 212’s advertising has always put a lot of emphasis on the fact that it offers a demo account. The truth is that its demo account is not at all bad, but neither is it fantastic. In any case, the availability of a demo account is an important consideration when choosing an online broker, mainly because it allows users to learn how to develop trading strategies without putting any of their own capital at risk. Since all of the demo account’s operations are virtual, and since they reflect real market conditions, demo accounts make it possible to simulate how an actual investment portfolio would behave. This is very useful since it allows users to develop trading strategies which they can then use once they transition to investing with real money.
Many users open a demo account in order to learn how to invest in the Forex market, but it is also possible to use this type of account to learn how to trade all types of assets. For example, it is possible to trade CFDs on company stocks, stock indexes or commodities. Despite this fact, there is something that we don’t like about Trading 212’s demo account, it has very limited functionality. When opening a demo account, the ideal thing is to be able to perform any type of operation without any limitations. That is why, in our opinion, Plus500’s demo account is a much better alternative for learning how to trade without limitations.
Plus500’s demo account is free to use, is available in Spanish, and does not impose any time limits or limitations of any other type. Moreover, it will allow you to learn how to trade all possible assets. It is even possible to simulate trading cryptocurrencies such as Ethereum, Litecoin or Bitcoin. This is why we consider Plus500’s demo account to be the best currently available trading simulator. The sign-up process is very simple, but we will explain it here anyway. If you would like to sign-up for Plus500’s free demo account, simply click the button below. After you are redirected to the landing page, click where it says “start trading now”. A window will open, and you will simply need to choose “demo mode” and then input your personal information. After that you will be good to go (CFD Service. 80.6% lose money).
We felt that this review would not be complete if we did not dedicate a section to the opinions held by Trading 212’s users. We are aware of the fact that the internet if full of comments from people who write their opinions about all sorts of things. Since Trading 212 is no exception to this rule, that is why we searched the internet for opinions which were repeated several times by Trading 212’s users in order to try to establish some sort of global summary. Furthermore, as is always the case in these situations, there will always be clients who are very satisfied with a service as well as others who are very dissatisfied. Because of this, we have decided to give voice to both points of view, beginning with the positive opinions and ending with the negative ones.
Among the positive opinions that we were able to find was the belief held by Trading 212’s users that the company is well regulated since it is supervised by regulatory bodies of a high stature. There were also some comments praising the proprietary investment platform which is compatible with smartphones (Android, iOS), tablets and computers (PC and Mac). Concerning the demo account Trading 212’s users had diverging opinions. On the one hand, some users were simply happy with the fact that a demo account was available, while other users expressed the opinion that there are better demo accounts available from other brokers – accounts which have fewer limitations. There were also positive opinions expressed concerning the variety of instruments being traded on the platform, especially in terms of the Forex market since this broker makes it possible to trade almost all existing currency pairs.
As for the negative opinions, there was one in particular which was repeated many times. People expressed their dissatisfaction with having to pay commissions in order to trade stocks. Although paying commissions was considered a normal part of trading on the stock exchange just a few years ago, in 2018 it is now possible to invest in these markets without paying any commissions, and it is only normal that Trading 212’s users complain about this limitation. The broker’s spreads, while generally not that bad, also resulted in several negative comments. Another aspect that some people did not like about this broker is the fact that it is not possible to use the MetaTrader 4 platform to perform operations. MetaTrader is among the best investment platforms, although it is also true that using a broker’s proprietary software is oftentimes must simpler. Since everyone has different preferences, it is possible to find a wide range of comments on different forums and websites.
Pros and cons
Before ending this review, we wanted to highlight a few key aspects which came to light during our analysis of this broker. Since this review is somewhat lengthy, we wanted to summarize the most important points in order to help you to better understand the way in which Trading 212 operates. To do so, we decided to present these points in a “pros & cons” format.
- Regulation similar to that of its competitors
- Medium to high-level trading platform
- Free demo account
- Many available currencies and assets
- Limited demo account
- Commissions are charged for trading stocks
- Spreads could be better for some assets
- There are better alternative brokers
Conclusion of this review
We have finally reached the end of this review. And we would like to conclude by saying that, in our opinion, Trading 212 is a good broker. We think that it offers an adequate level of security – in accordance with the industry’s standards. Its trading platform is good, but is nothing special. We would much prefer that this broker not charge any commissions for trading stocks, especially since there are other brokers that don’t charge any. Moreover, we feel that the demo account should not be limited in any way. For this reason, if you would like to try trading without paying any commissions, click here to visit Plus500 (CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 74-89% of retail investor accounts lose money when trading CFDs. You should consider whether you can afford to take the high risk of losing your money).