DAY TRADING UK: A Comprehensive Guild

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Did you know that in the United Kingdom, day trading is a popular trading approach for beginners? Here’s all you need to know about day trading in the United Kingdom in 2023, as well as the best day trading platform to utilize. It’s now easier than ever to make a living in the UK by tax-free day trading, thanks to online trading. You acquire and sell assets in day trading with the goal of closing all of your positions by the end of the day. Stocks, options, mutual funds, FX, and other financial instruments can all be used for day trading. Day trading can be profitable, but it can also be exceedingly difficult.

We’ll go over day trading for beginners in this tutorial, as well as some day trading methods and suggestions to get you started. We’ll also show you how to place your first-day trade and highlight five of the best brokers for trading in the UK.

What is day trading UK?

Day trading in the UK entails purchasing and selling financial products within a single trading day, with positions being closed out at the end of each day and new ones being opened the next. To profit from modest market changes, day traders purchase and sell numerous assets on the same day, or sometimes multiple times on the same day.

Intra-day trading is not for the casual trader since it requires time, effort, dedication, and a particular mindset. Making quick decisions and completing a high number of trades for a modest profit each time is what day trading in the UK entails. It’s usually thought of as the polar opposite of conventional investment methods, which aim to profit from price fluctuations over a longer period of time.

What are the best markets for day trading UK in the UK?

Day trading is frequently linked with markets with fixed closes, although you can be a day trader and trade markets that are open 24 hours a day (or almost 24 hours). Choosing a day-to-day trade ultimately boils down to what you’re interested in, how much money you have, and how much time you want to spend trading. The following are some of the most popular day-trading UK markets:


Day trading stocks is a popular alternative for novices because there are so many different equities to trade. In the stock market, closing out positions at the end of the day is usual practise to minimise ‘gapping risk,’ which occurs when overnight news and influences lead a company’s share price to open significantly higher or lower than the previous day’s close.

#2. Indices

Due to the limitations of market opening hours, day trading UK indexes would follow a similar pattern to share trading. When you trade indices, you’re betting on the performance of a collection of stocks rather than a single firm The FTSE 100, for example, is a market capitalization index that represents the top companies on the London Stock Exchange. As a result, day trading indexes will expose you to a greater section of the stock market.

#3. Forex

Because of the large number of currency pairings to trade and the high market liquidity, and the ease with which currencies can be bought and sold, the forex market is another popular alternative for individuals just starting out in day trading. Day trading in the UK on common markets is frequently utilised to avoid the expenses associated with rolling over positions and the risk of being exposed to overnight market changes.

Top 5 day trading UK strategies

Day trading the UK is more of a trading style than a trading technique because it merely requires you not to keep a trade open overnight. The following are five popular day trading UK strategies:

  • Trend trading
  • Swing trading
  • Scalping
  • Mean reversion
  • Money flows

#1. Trend trading

Trend traders try to make money by researching the direction of asset prices and then purchasing or selling based on the trend’s direction.

Traders would take a long position and buy the asset if the trend is upward, with prices reaching a series of higher highs. Traders would take a short position by selling if the trend is downward and prices are making a series of lower lows.

Because you can keep your position open as long as the trend continues, trend trading isn’t just for day traders. If you’re only doing intraday trading, you’ll close it before the end of the day.

#2. Swing trading

Swing trading is all about profiting from short-term price patterns, based on the premise that prices in a trend never go in one direction. Also, swing traders, on the other hand, seek to profit from both up and down moves in a shorter time frame.

Swing traders are more interested in small reversals in a market’s price movement than trend traders, who aim to profit from long-term market trends. They try to anticipate these reversals and trade to profit from smaller market movements.

#3. Scalping

Scalping is a short-term trading method that focuses on having a high win rate while taking tiny but frequent profits. The notion goes that you can develop a large trading account just as easily by taking smaller profits repeatedly as you can by placing fewer deals and letting profits run. Scalping necessitates a disciplined exit strategy because losses can quickly wipe out earnings.

Because the smaller profit margins from each trade are swiftly eroded by overnight funding charges, most scalpers will close positions before the end of the day.

#4. Mean reversion

The theory of mean reversion states that prices, as well as other measures of value such as price-to-earnings (P/E) ratios, will always return to the historical mean.

Technical analysis, like moving averages, is used in this method to identify assets whose recent performance has deviated significantly from their historical average. The return to their usual trajectory will then be exploited by mean reversion traders.

#5. Money flows

The money flow indicator uses volume and price rather than the asset’s price alone to determine if an asset is oversold or overbought.

It determines whether the money flow was positive or negative by comparing the number of deals from the previous day to the current day. Overbought conditions are indicated by a reading of 80 or higher, which signals the trader to sell. A value of 20 or less, on the other hand, suggests oversold market circumstances and is a buy signal.

What you need to know before you start day trading

  • Understand the factors that impact day trading
  • Choose how to day trade
  • Create a trading plan
  • Learn how to manage day trading risk
  • Open and monitor your first position

#1. Understand the factors that impact day trading

Before you start day trading any market, there are a few things to keep in mind. As the practice might take a lot longer than a traditional buy-and-hold strategy. Because the focus of investment is on longer-term market movements, everyday fluctuations have minimal impact on the overall picture. When day trading, however, the focus is on the elements that can influence intraday market behaviour.

These include:

#1. Liquidity

The ease with which and how fast positions can be entered and abandoned determines a market’s liquidity. Day traders require a lot of liquidity because they are likely to execute many trades during the day.

#2. Volatility

For day traders, the volatility of an item, or how quickly its price changes, is critical. If substantial volatility is forecast during the day, the fluctuations can provide a plethora of short-term profit chances.

#3. Trading volume

The trade volume of an asset is the number of times it is bought or sold in a particular period. A large trading volume indicates a lot of interest and can help you find good entry and exit positions.

#2. Choose how to day trade

The first step toward becoming a day trader is to determine which product you want to trade. Day trading is popular with derivatives. Spread betting and CFD trading are the two main options in the UK.

There is no requirement to own the underlying asset when using these products. This means you can start and cancel positions considerably faster, as well as speculate on whether a market is rising or declining in price.

Because there is no set tax for day trading, the amount you pay will vary depending on the instrument you use to trade the markets. CFD trading, for example, is not free from the capital gains tax, despite the fact that losses can be offset against earnings.

#3. Create a day trading plan

Before you begin day trading, you should write out exactly what you want to achieve and be realistic about the goals you set for yourself. If you anticipate making a lot of money right immediately. You may be disappointed because day trading can have a steep learning curve.

It’s also crucial to think about how you’ll develop a process for entering and exiting the market, and whether you’ll use fundamental or technical analysis. Your day trades will most likely concentrate on macroeconomic data announcements, corporate reports, and breaking news if you choose to focus on fundamental analysis. Technical analysis, on the other hand, will most likely focus on chart patterns, historical data, and technical indicators.

#4. Learn how to manage day trading risk

Developing a risk management strategy is an important part of being ready to trade. Traders can minimize any potential losses by putting procedures in place to prevent the worst-case situation. Stops and limits, as well as other risk management measures, are critical parts of each trader’s toolkit.

A successful trader is said to cut lost deals fast while allowing profitable transactions to run, and this is as true in day trading as it is in any other technique. A trader doesn’t have to be right all of the time, but they do have to recognize when they’re incorrect and respond promptly to ensure that they’re making more money on winning deals than they’re losing on losing trades.

The question of whether a trader should aim for a high win/loss ratio or focus on the risk-to-reward ratio is always debated. Successful day traders frequently have low win rates, even below 40%, but aim for a risk-to-reward ratio of at least 1:2, which means the trader expects to double the amount of money he or she is ready to risk. That is a personal decision, but one thing is certain: there is nothing wrong with making a mistake. Taking a modest loss, staying incorrect and suffering a large loss is likely the quickest way to end a short-term trading career.

#5. Open and monitor your first position

It’s time to start trading after you’re confident in your trading strategy. To begin, you’ll need to create an account. You can practice opening positions in a risk-free IG demo account if you aren’t ready to trade on live markets.

You’ll need to set the parameters of your trade now that you’ve opened an account. It’s likely that you’ll wish to open both long and short bets in a single trading day. If you believe a market will rise, you will choose to ‘purchase’ the asset. Whereas if you believe a market will fall, you will choose to sell it.

Remember that as a day trader, you’ll likely be opening and closing numerous deals on the same day. So stay on top of any market events or breaking news that could affect the values of the markets you’re interested in. You can do so by utilizing our trade ideas and news.

It’s time to close any trades you still have open at the end of the day. One of the most crucial procedures at this point is to keep track of all the positions you’ve started and closed throughout the day. As well as successful and unsuccessful trades.

Day Trading Platform in the UK

#1. eToro

eToro is considered the best social day trading platform UK and is the world-leading copy trading broker. It offers zero-commission trading and is excellent for beginners.

eToro features include:

  • Graph trading scenarios
  • Trading in US dollars
  • Social newsfeed with open trading discussions and notifications
  • Valuable trading education
  • Trader matches depending on your needs and trading style

#2. Plus500

Plus500 is a user-friendly tax day trading platform UK that focuses on CFD trading. There is no minimum deposit and modest trading fees, but inactivity fees are significant.

Please keep in mind that the Plus500 tax day trading platform UK is only for seasoned traders. Plus500 is a very user-friendly tax-day trading platform UK, however, CFDs are sophisticated financial products. Thus it is not appropriate for beginners or inexperienced traders.

With a two-step login procedure, the web tax day trading platform UK is user-friendly. The mobile tax day trading platform UK is secure and simple to use, with decent search capabilities. There isn’t a desktop version available.

Plus500 provides minimal research and news coverage, as well as excellent customer service, a demo account, and informative videos. It does not provide tutorials on how to use the tax day trading platform UK.

#3. Moneta Markets

Moneta Markets was established in 2009 and is governed by the Australian Securities and Investments Commission (ASIC) and the Financial Conduct Authority (FCA). Users can trade forex, indices, commodities, and share CFDs with just a $50 minimum deposit at Moneta Markets.

There are three trading accounts to choose from, depending on whether you want to pay a commission in exchange for tighter spreads or have the trading costs included in the spread. True ECN accounts carry a $6 per lot commission fee but spread on Forex start at 0 pips. Whilst STP and Prime accounts have the fees integrated into the spread.

Traders can use MetaTrader 4 and 5, as well as the proprietary WebTrader and AppTrader platforms. With Moneta Markets (available for web and mobile use respectively).

#4. Pepperstone

Pepperstone specializes in FX (foreign exchange) and CFDs (contracts for difference) (contract for differences).

There is no minimum deposit required, and trading fees are cheap.

Mobile, desktop, and web tax day trading platform UK login methods are not as safe as they may be. They are, nevertheless, adaptable and user-friendly.

The market research and trading suggestions on Pepperstone are amazing, but the news flow is poor. The educational resources are sufficient.

Customer assistance is available by phone, email, and live chat, and all questions are promptly responded to.

It is not publicly traded and does not have a banking license, but it is regulated.

#5. Vantage FX

Vantage FX began as a transparent forex broker in 2008 and has since expanded to handle 44 forex pairs and 290 CFDs (including cryptocurrency, shares, commodities, and indices). Because of ASIC and the FCA’s oversight, Vantage FX is well-known and regarded as a safe broker.

Vantage FX provides market access via the popular MT4 and MT5 platforms, as well as a feature-rich mobile app.

#6. XTB

The whole MT4 suite is supported by XTB, and its proprietary tax day trading platform UK, xStation 5, is a user-friendly, intuitive solution that works on desktop, web, and mobile devices.

To begin trading, you’ll need a minimum deposit of £250, and there are various instructional materials accessible, including XTB’s trading university.

#7. City Index

Low-cost FX and stock index CFD trading is available at City Index. There is no minimum deposit to start an account, but non-trading fees can be extremely costly.

Though it lacks essential data, there is considerable customizability across all platforms with good-quality news flow and different research tools.

Excellent teaching materials, including a demo account, are provided, and customer care is available 24 hours a day, seven days a week by live chat and phone.

City Index is a publicly-traded company.

Overall, while City Index’s portfolio is restricted, it is regulated by the FCA in the United Kingdom. Offers reasonable costs and quality research, making it an ideal forex broker.

#8. Degiro

Degiro is Europe’s premier investing platform, and it began as a wholesale broker. Offering professional clients competitive rates and exclusive opportunities.

It is now one of Europe’s largest retail stockbrokers, with its own banking license, which is uncommon among brokers. BaFin and the FCA are both in charge of Degiro.

Opening a Degiro account is a straightforward, quick process that can be done online all you need is identification and a bank account.

With Degiro, there is no minimum deposit for any account type. You can choose from five distinct account types, including Custody, Active, and Day Trader. Because each account has its own set of features, functions, and services, you must pick the one that best suits your trading style.

There are no account or inactivity fees, but you can only deposit with your bank account no credit or debit cards are accepted. You can only have one account in your home currency; you cannot have two accounts in different currencies.

Whether you’re using the web trader or the mobile app, trading on Degiro is quick and clear. Both are well-designed and simple to use, making them ideal for beginner traders, although they lack customization and several capabilities that traders would want.

#9. FXCM

FXCM specializes in cryptocurrencies and has cheap trading fees. To open an account, however, a small minimum deposit is necessary. There’s also a one-year inactivity fee and exorbitant bank withdrawal fees.

Although it is not the most cost-effective tax day trading platform in the UK, it offers outstanding educational resources, exceptional customer support, a consistent news flow, and good search capabilities.

FXCM is not a public firm, but its sister company is, ensuring its safety and trustworthiness.

FXCM is great for forex traders who want to open, withdraw, and fill their accounts quickly.

#10. Admiral Markets

Admiral Markets, which has changed its name to Admirals, promotes itself as a “full-spectrum financial centre.”

In addition, an admiral is a broker that offers a variety of forex and CFD trading products in a variety of currencies.

Admiral Markets, which was founded in 2001 and is licensed by JSC, FCA, EFSA, and CySEC, provides traders with access to MetaTrader 4 and 5, as well as the possibility to have multiple active accounts with different base currencies to take advantage of price volatility.

Depending on the platform you want to utilize, you can choose from a variety of account kinds.

On MT4, you can open a Trade.MT4 account, which is a regular account. This account has a minimum deposit of 100 USD/EUR/GBP or equivalent, and it allows you to trade 37 currency pairs as well as metal, energy, futures, stock, and bond CFDs.

Trading fees in this account are from the spread, with the exception of a single share or ETF CFDs. Which has a set commission of 0.02 USD.

The Zero.MT4 account has tighter spreads and a larger number of currency pairs (45), but it also has fewer CFD possibilities.

Forex and metal CFDs have a commission of 1.8 to 3 USD per lot, cash indices have a commission of 0.5 to 3 USD per lot, and energy CFDs have a commission of 1 USD per lot.


Which markets can you day trade in UK?

One of the most common ways to get started in tax day trading is to buy and sell stocks. You can buy shares in major UK companies such as Royal Mail, Tesco, or BP, or you can look internationally to trade on price movements in companies such as Amazon and Facebook.

Do you pay tax on day trading UK?

There is no set tax for day trading UK, so it will depend on which instrument you are using to trade the markets. For example, while spread bets are exempt from the capital gains tax, CFD trading is not although losses can be offset against any profits.

How are day traders taxed?

A profitable trader must pay taxes on their earnings, further reducing any potential profit. If investments are held for a year or less, ordinary income taxes apply to any gains. Holding an investment for more than a year usually allows traders to take advantage of lower long-term capital gains tax rates.

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A profitable trader must pay taxes on their earnings, further reducing any potential profit. If investments are held for a year or less, ordinary income taxes apply to any gains. Holding an investment for more than a year usually allows traders to take advantage of lower long-term capital gains tax rates.

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