Location-independent trading while traveling is possible with a trading app on your smartphone or tablet. There are some reputable and very powerful offers. Beginners should make sure that the app comes with a demo account.
While a trading demo account is basically standard with the desktop versions of the brokers, this is not always the case with the apps.
What should a trading app be able to do?
It should be possible to place orders, but important aids and functions are also desirable. These include charting with indicators and drawing tools, real-time prices and alarms. Account and custody account management must also be possible with it. Today, deposits and withdrawals are possible via most trading apps.
Trading demo account: That’s why it’s not always there
With some providers, demo trading is only possible with the desktop version. Of course, there is also the option of trading with a laptop while traveling. But sometimes this is uncomfortable. On the train or bus, many traders want to be able to access it from their smartphone. The tablet is the largest conceivable variant.
If a broker has the right trading demo account and works great there, this does not mean that this has to be the case with the provider’s app. Implementing it into a mobile app is technically complex and requires additional resources as well as customizations to make the functionality work smoothly on different mobile platforms. Here, some brokers save on app development.
Why are the trading apps so popular?
Traders do indeed want to trade while traveling . Basically, this situation is perfect: people move, see something of the world or attend an important business meeting in another place, and in between they can watch the charts, place orders, pull stops and transfer profits to their reference account. This is much more exciting than the boring squatting in front of the PC at home. The trading apps are now very clear. They hardly differ from the broker’s desktop variant. At the same time, they allow spontaneous trading while traveling.
Who uses the trading apps?
Young traders from 20 to around 35 years of age in particular use trading apps very intensively. During their lunch break, they take a quick look at their positions, adjust their orders and purchase further securities with a click. This is also how they proceed when they are on the road. The graphical features in the apps allow the trader to immediately see the price development.
External Trading Apps
The brokers and banks offer trading apps, but there are also offers from external developers. Their apps usually come with advanced tools and functions, which mainly concern analysis and charting. From this app, the trader connects to their broker to place orders. Leading the way in this type of trading apps are:
- TradingView
- MetaTrader 4
- MetaTrader 5
With these apps, traders are not limited to one broker alone. Most brokers have MetaTrader 4 installed when they offer trading in CFDs, forex or stocks. The app’s software connects to the broker. The trader can therefore place his orders as normal, as would also be possible with the broker’s own application.
Beware of spontaneous purchases
Of course, trading apps tempt people to buy securities spontaneously because placing an order is so fast. Especially 1-click trading is an advantage of the apps. Even logging in is no longer necessary, because the login data is already stored on the smartphone. Traders are therefore recommended to make more use of the charting tools of the apps and to first look at the price at their leisure in order to make a well-considered decision. Above all, they should use an app with an integrated trading demo account and train trading with it. Demo trading makes it possible to test a strategy for a while. At the same time, the user familiarizes himself with the trading interface in order to be able to use it intuitively and sometimes very quickly when trading with real money.
Costs with trading apps
Trading with trading apps is usually associated with very low order fees. The neo-brokers who use this technology are more likely to earn their money through the rebates of affiliated trading platforms. The low cost of trading allows the trader to act more frequently and with a small capital investment. In some cases, brokers and issuers even waive the order fees altogether and benefit solely from the spread, i.e. the difference between the purchase and sale of the security. Traders can take advantage of this cost advantage. Nevertheless, they should of course not be tempted by this to make ill-considered orders.
How secure are the apps?
Technically, the trading apps are secure. Traders should pay attention to licensing by BaFin or ECB, use two-factor authentication when logging in for the first time and otherwise protect their access data. This also means securing the smartphone or tablet with an access that can be a PIN or a biometric code. However, the dangers lurk elsewhere: stock market transactions are generally risky. This applies in particular to trading in leveraged derivatives, which can lead to quick profits, but also to high losses.
Deposits and withdrawals, taxes
A trading app can be used to transfer money from the reference account to the trading account and vice versa. This feature should be built-in. Many apps also allow you to deposit via PayPal. When transferring trading profits to the reference account, the final withholding tax of 25% + church tax and, if applicable, solidarity surcharge must be observed. The latter amounts to 5.5% of the tax burden from a taxable annual income of 110,000 euros. Those who earn less are exempt from it. The tax on capital gains is a withholding tax. It is collected at the source of its creation – on the broker’s account – and automatically paid by the domestic broker to the tax office. The trader only needs to make sure that the account has enough funds at the end of the year. When trading through a foreign broker, the trader is obliged to pay the tax himself.
