Best free stock trading platform 2021

Last updated: 17.05.2021
Howard Friend
Author:
Howard Friend
Adviser
CFD & Trading
Experience
> 10 years

As an increasing number of people continue to dip their toes into stock markets, there’s been an exponential rise in stock trading platforms worldwide. Trading stocks is an exciting way to multiply your money with the help of easy-to-use commission-free trading platforms.

In the following guide, you’ll learn what stock trading is, what benefits it offers, and which stock trading instruments are best for beginners. We’ll also shine some light on the best free stock trading platform in 2021 and why it should be your go-to option.

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  • What are stocks?
  • Beginner guide
  • Pros of trading stocks
  • Cons of trading stock
  • High-risk stock trading instruments
  • Golden rules for investing
  • Find a free stock trading platform
  • Find a free stock trading platform
  • Conclusion

What are stocks?

A stock is the entire amount of shares into which a company’s ownership is divided. In other words, a collective term for shares is stock. People use stocks to invest in companies worldwide and own a percentage of a company so they can make profit when the company’s value rises.

Unfortunately, that doesn’t mean you get to sit in the CEO’s chair or enjoy meetings at corporate offices, but you do get a right to vote at meetings. However, the agenda behind owning shares of a company is to get a profit return on the investment.

The two main benefits people seek when investing in stocks are:

  • The companies have the potential to grow in the near or distant future, allowing you to sell the shares and make profits.
  • The companies pay dividends, allowing you to get quarterly payments or build a revenue stream to pay off your expenses such as rent.   

The million-dollar question is, why do company’s sell shares, and how do they work? Companies sell shares simply to utilize the money in their business, allowing the company to grow in net value and profit investors alongside. The funds received through stocks can be used to pay off debt, expand the company, or increase product lines. 

Investors usually purchase stocks from other investors rather than directly from a company, and the cycle goes on. Some buy stocks, and some sell stocks according to their prediction of the market and financial needs. Nowadays people trade stocks commission-free through online trading platforms like Nextmarkets. The ease of trading stocks through applications has attracted many people to enter the stock market.

Beginner guide

Entering the stock market can be exciting but equally daunting. Not knowing where to begin and how to begin can be challenging for beginners, which is why we’ve narrowed down a brief step-by-step guide on stock trading for beginners.

1. Understand how stock trading works

It’s essential to develop a thorough understanding of how stock trading works. The easy way to understand it is to imagine you’re in an auction. Now, imagine the asset being sold is a company’s shares, and buyers and sellers negotiate a price for each stock that becomes public.

That’s exactly how the stock market works. Companies register their stocks at a specific price (known as IPO), and traders purchase and then sell those stocks based on the market’s direction. When a particular share price is likely to rise, the trader will buy it to sell it later and make a profit. Similarly, if a share price is going down, a trader will try to sell that share instantly before facing any loss.

To make the right trades, a beginner must know how to analyze the market and know the best stocks to buy. Thankfully with the help of comprehensive online trading platforms, you can receive expert assistance in trading till you’re comfortable doing it solely on your own.

2. Select a trading platform and register a trading account

The most challenging yet crucial part of trading is selecting a high-quality trading platform. An ideal platform would offer you the following:

  •         Easy usage
  •         Convenient and smooth trading
  •         Variety of trading tools
  •         Access to numerous markets
  •         Daily trade analysis
  •         Expert guidance and help
  •         Trading tips and educational material

It’s common for traders to undermine a stockbroker’s role in the success or failure of their investments. Having innovative tools and techniques allows traders to make profits through high-quality learning, ease of trading remotely, and access to numerous opportunities.

Nextmarkets is currently one of the best stock trading platforms in the market, allowing traders to trade stocks for free. Their platform uses a wide range of innovative features to enhance your trading experience through reduced risk and an increased chance of making successful trades

3. Set an investment budget for yourself

It’s common for beginners to ponder over the budget required for trading stocks. Though it’s ideal if you first calculate your budget, then analyze the stock market. The amount of funds needed to purchase stocks depends on how expensive the company’s shares are.

For those who are on a smaller budget and want mutual funds, trading ETFs is always an option. The minimum amount for mutual funds is usually 1000$, albeit ETFs are purchased at a share price, and in some cases, they may cost less than 100$.

To cut out any additional costs, you should search for stock trading platforms that don’t charge hefty amounts in the name of commission fees. For instance, Nextmarkets allows its traders to trade 1000’s of stocks without commission or any hidden charges.

4. Give your investments time

Though there are numerous strategies and approaches to trade stocks successfully, many expert traders suggest that you focus on a company’s potential for long-term growth to make the most out of your investments.

As impossible as this may sound, giving your investments time and avoiding the urge to continuously keep an eye on them can help your investments reach greater potential returns. One of the greatest stockbrokers, Warren Buffet, once said that most Americans could make the best investment in low-cost ETFs with high potential for return.

5. Keep learning and growing

There are no limits to learning when it comes to trading stocks; the more you know about stock markets, the higher the chances you’ll make successful trades. Stockbrokers like Nextmarkets put a lot of focus into learning tools and materials for their traders. Using intelligent and innovative financial products paired with the proper knowledge allows traders to capitalize on their funds efficiently.

There are multiple courses run by experts and an ample amount of information available on Google search as well. All you have to do is hop onto your search engine and read about the stock market regularly. If you prefer books, you can read ‘A Beginners Guide to The Stock Market’ by Matthew R.Kratter or ‘A Random Walk Down Wall Street: Including a Life-Cycle Guide to Personal Investing by Burton Malkiel’.

Pros of trading stocks

1. You get to capitalize on your funds

Stock markets are known for being the best way you could multiply your savings if you invest wisely. Many people start with little investments paired with practical strategies, allowing them to make considerable profits in the long run.

2. You get dividends

Who doesn’t appreciate regular earnings payouts, also referred to as dividends. This is somewhat similar to ‘quality investment property as it allows you to make capital gains while providing a rental income alongside.

3. You get tax advantages.

If you happen to borrow money for investing in shares, but your dividends are less compared to your interest payments, this loss can be used to reduce your taxes.

4. Plenty of markets to trade-in

Trading stocks opens a door of opportunities as it allows you to do business in several markets at once. There’s a market suitable to everyone’s taste out there, so you can pick and choose amongst them. It’s best to invest in markets you’re more familiar with to reduce the risk of loss.

5. Easy to trade

The rise in emerging online platforms has made trading stocks extremely easy and convenient. People often compare stock trading with property investments, but the truth is it’s much easier to trade stocks compared to buying and selling real estate.

The convenience of trading makes it an excellent part-time interest that can offer great potential returns on investment.

6. You can become a part of multinational corporations

Isn’t it exciting to know that you can own shares in multinational companies so easily. For instance internet trading allows you to;

Though buying shares in multinational corporations can be costly, you can buy a few to begin with. It’s important to focus on the company’s financial position and expected growth before investing. This shouldn’t be a problem if you’re using a good trading platform. Platforms such as Nextmarkets allow users to access market analysis and expert guidance to know when and where to invest.  

Day trading - Nextmarkets

Cons of trading stock

Risk of capital loss: Trading stocks is like a gamble. You either win, or you lose. It all comes down to the market, and nobody truly knows what will happen shortly. Though with time, people have come up with multiple strategies and tools that minimize risk in transactions, you cannot simply diminish risk.

Uncertain dividends: It’s great to get dividends, but they aren’t set in stone. There’s always a chance of dividends getting eliminated or going down, so you can’t entirely rely on them.

The stress of losing capital: Trading stocks can be an emotional journey as the market is never 100% predictable. There will be days when your shares will go down in value, just like days when they increase in value. For someone whose money is on the line, it can be extremely stressful.

The best way to reduce this stress is to trade with a platform that allows you to trade conveniently and offers a daily analysis. Staying effortlessly in touch with your open positions can help reduce stress and anxiety linked to uncertainty. 

High-risk stock trading instruments

‘High-risk, high-return’ is a commonly stated theory which means that in an investment where there is a high degree of risk, there is a great potential of profit as well.  Similarly, high-risk investments are opportunities to gain significant profit at the cost of great risk due to the asset’s high volatility.

The best way to deal with such trades is through the risk-to-reward ratio. This allows a trader to compare or measure the potential profit against the risk of loss to determine whether a trade is worth it or not.

If the risk-to-reward ratio appears to be over 1.0, this means the risk is higher than the potential return. Similarly, if the risk-to-reward ratio is below 1.0, this means that the potential reward is higher than the risk of loss.

High-risk trading instruments include:

Penny stocks: Shares that are bought for 100p or less are known as penny stocks. These are invested only if the buyer sees great potential for profit in the company. The risk in penny stocks comes from a lack of liquidity or false acquisitions made by the company to sell their stocks.

Lottery stocks: Stocks of companies trading at a low value in current times but hold the potential to yield high returns if the company fixes its operations or pays off its debt. These are considered high-risk, which is why traders dive into cheaper or undervalued stocks. Traders can also use risk-management tools to avoid losing all their money.

Emerging markets: An emerging market has similar features to a developed market but may not fully meet its standards. These include markets that have the potential to become developed shortly or were evolved in the past.

IPOs: These stocks are risky because company’s trading IPOs often lack financial information before they have gone public. The best way to tell if an IPO is worth trading is to check whether a renowned bank or financial institution underwrote it.

Golden rules for investing

  •  Don’t follow the herd

It’s no secret that an investor’s decision is highly influenced by his relatives, friends, or people around him. Hence, if the crowd is investing in a particular stock, you may find yourself investing in it as well. However, research shows that this strategy has a high chance of backfiring in the future.

Warren Buffet, one of the world’s greatest investors, once stated, ‘Be fearful when others are greedy, and be greedy when others are fearful.’ Sometimes following the crowd leads you in the wrong direction, and it’s essential to focus on other factors when investing in stocks.

  • There’s more to investing in stocks than a company’s name

Investors usually buy stocks based on a company’s name or industry, whereas there’s a lot more research required to make successful trades. It’s essential to have a clear picture of its future and industry’s market predictions before investing in them.

Any successful stockbroker out there would give you the advice of making informed decisions rather than following your gut instinct. When there’s money on the line, research comes hand in hand.

  • Know where you’re investing

Investing in a company or business without knowing relevant details can be an extremely risky move. It’s good to invest in various companies, but you must know the company inside out in order to judge its potential to grow.

  • Never invest more than you can afford to lose

No matter how confident you are while investing, you can’t simply diminish the risk that comes with trading stocks. It’s essential to draw a budget and invest smartly. It’s also a good idea to invest in multiple markets, so you have a higher chance of making profits and a lower risk of losing all of your money.

  • Follow a disciplined approach while investing

The market can be highly volatile, which is why it’s essential to have patience and follow a disciplined investment approach. Investors who focus on systematic investments in the right shares and wait patiently for the outcome tend to generate greater returns eventually.

Find a free stock trading platform

Although it’s preferable to trade with a free platform, it’s equally important that the trading platform is up to the mark in terms of quality tools and trading instruments. There may be multiple trading platforms claiming to be free of cost, but most of them lack quality and may even have hidden charges.

To find a free-of-cost trading platform that provides innovative and convenient trading tools and instruments, you need to research. Studying platforms, what they offer to their clients and what they’re known for is an essential part of selecting a trading platform.

Apart from general research, it’s always good to read reviews. Seeing the platform from the eyes of its users can help you make the decision more quickly.

Lastly, it’s always better to try a demo account if the trading platform offers it. Nextmarkets.com allows traders to create and use a free demo account before trading with actual money. This will enable you to get a hands-on experience of the platform, how trading stocks works, and where you stand in trading knowledge.

Find a free stock trading platform

Although it’s preferable to trade with a free platform, it’s equally important that the trading platform is up to the mark in terms of quality tools and trading instruments. There may be multiple trading platforms claiming to be free of cost, but most of them lack quality and may even have hidden charges.

To find a free-of-cost trading platform that provides innovative and convenient trading tools and instruments, you need to research. Studying platforms, what they offer to their clients and what they’re known for is an essential part of selecting a trading platform.

Apart from general research, it’s always good to read reviews. Seeing the platform from the eyes of its users can help you make the decision more quickly.

Lastly, it’s always better to try a demo account if the trading platform offers it. Nextmarkets.com allows traders to create and use a free demo account before trading with actual money. This will enable you to get a hands-on experience of the platform, how trading stocks works, and where you stand in trading knowledge.

The best stock trading platform

Nextmarkets is one of the best stockbrokers in the market right now and is known for its wide range of innovative tools. The stock trading platform offers traders over 7000 shares to trade without any extra costs, along with 1000 ETFs through the Munich Gottex Exchange.

The platform is known for being secure as it is regulated and licensed by the Malta Financial Service Authority (MSFA). The MSFA is one of the most stringent financial authorities and has several rules and regulations to be followed. Hence, trading with Nextmarkets means your funds are secure, well-managed, and kept in reputable banks.

The stock brokerage firm also won the most innovative broker award in 2020, which was well-deserved. Nextmarkets believes in innovation and development, and that sets them apart from other stockbrokers. The trading instruments offered by Nextmarkets are unique and allow traders to make investments and follow up on trades more conveniently.

Trading with an online platform makes the entire trading process a whole lot easier. With Nextmarkets’ online application, traders can easily access numerous markets through their phones, tablets, or laptops. Trading from anywhere and at any time during the weekdays is convenient, especially for someone who has other commitments.

The trading application also gives a daily analysis of all open trades, allowing traders to easily manage and keep an eye on their investments or trades. Not to mention, having the ease of trading through your phone can save you from missing out on quick opportunities.

For someone looking to trade CFDs, keeping an eye on the market’s directions and making quick trades can be a hassle. However, with the right online trading platform, it can be smooth and convenient.

Another huge plus-point of trading with Nextmarkets is prioritizing learning and providing free educational material to traders. If you’re a beginner and worried about making the wrong trades, Nextmarkets allows you to get coaching from an expert trader. This way, you can get guidance to make the correct trades and eventually develop the skills and expertise to do it solely on your own.

How to register

Registering a trading account has never been easier. The entire process is free and will take you a few minutes.

  • Go to Nextmarkets application or website.
  • Click on ‘Register Account.’
  • Add in relevant details and provide them with your documents (A proof of identity and residential address).
  • Once you receive your account, you can add funds to it and begin your trading journey with us.

Conclusion

Trading stocks is a great way to capitalize on your funds without having to put in much effort. Though, trading stocks also means risking money. There are definitely several ways you can decrease the risk that comes with trading stocks, but you cannot completely diminish it.

To save any additional costs, it’s best to trade with a free stock trading app such as Nextmarkets. Not only is it free, but it offers traders access to thousands of shares and numerous ETFs. On top of that, it allows you to access educational material and experience a free demo account to get a closer look and understanding of how the stock market works.

Once you’ve selected a trading platform, it’s vital to invest smaller amounts in relevant markets to avoid sudden money loss. With the platform’s help, you’ll slowly grow a better understanding of how the markets work and might be able to gain greater potential returns on investments. You can also access expert guidance or trading coaches for help if you’re confused regarding where to invest.

With the right platform, beginner’s strategies, and proper guidelines, nothing can stop you from making the most out of your stock trading journey.

Free stock trading FAQs

💥Is it better to buy cheap or expensive stocks?

You can either buy more shares that are cheaper or fewer relatively costly shares. It doesn’t make a difference in the profit or loss you’ll have to face. The outcome of your position in a company depends on the percentage of shares you hold in that company.

Likewise, if you buy fewer shares in multiple companies rather than more expensive shares of a single company, you get wider market exposure. This also makes the investment less risky as you may lose money in one company but make a profit from another.

👀What's the cheapest way to buy stocks?

It’s best to focus on a high-quality trading platform rather than focusing on its cost feature. Though, if you’d prefer buying stocks for free from one of the best stockbrokers online, you should visit and register an account with Nextmarkets.

The cheapest way you can purchase stocks is through a free online trading platform. Online trading platforms allow traders to buy and sell stocks through a free trading account, that too for free. Some platforms also give access to educational material for learning and expert coaching for those who need guidance.

❓How can I start buying stocks online?

Buying stocks online is the easiest way to enter the stock market. You can register with an online trading platform within minutes. You can trade stocks from the comfort and convenience of your phone, laptop, or tablet. If you want to consider other options, you can also connect with a full-service stockbroker or buy stocks directly from companies.

✅Can I become wealthy through trading stocks?

Many people have capitalized on their funds through stock trading, though it takes time and dedication paired with a high-quality stockbroker. You can’t expect stocks to make you rich overnight, however with suitable investments, proper guidance, and required trading instruments and tools; it’s certainly possible.

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