What Is Robinhood ?
The app is popular among young, first-time investors, as evidenced by its game-like interface. A flying confetti animation pops on the screen whenever you make a trade, and Robinhood sends you push notifications when there are updates in the market. How to trade on robinhood ?.
Robinhood is a free-trading app that lets investors trade stocks, options, exchange-traded funds and cryptocurrency without paying commissions or fees. In its early stages, Robinhood stood out as one of the only brokers offering free trades. But with many big-name online brokers eliminating trading commissions and fees, Robinhood has had to find other ways to stand out, which include a new recurring investments feature and the ability to purchase fractional shares of stocks. Currently, it’s also one of the few brokers that gives investors the opportunity to trade cryptocurrency.
Robinhood offers both web and mobile trading, but the platforms are purposely bare bones, and some investors may find the range of tradable securities and account options lacking (the broker does not offer retirement accounts). In the last year, the platform has also received criticism for untimely outages and trade restrictions amid market volatility.
If you do some proper research, Robinhood can, at the very least, serve as a good introduction to investing. But no matter how savvy you are at picking stocks, you’re highly unlikely to beat the market over the long term. (Which is why Money has always advised new investors to start with passively-managed index funds with proven track records instead.)
Day traders will always try to game the system — even if it’s next to impossible to make boatloads of cash that way. And since Robinhood lets anybody with a bank account can buy and sell risky financial products, it’s no surprise that more and more people are opening up accounts.
How to invest with Robinhood (the right way)
Before you download any sort of investing app, figure out what your motivation is, Falcone suggests. Are you doing this to make some quick cash? Because you have Reddit-induced FOMO? Or because you want to put your money to work responsibly, and are prepared to think about long-term strategies?
“That should help you put blinders on to what you might be seeing on social media or hearing from your friends,” Falcone says. “If [certain] types of stock don’t fit into your strategy, then you should immediately know to ignore those suggestions.”
If you’re approaching this through a financial planning lens, make sure you’ve already paid off all your credit card and high-rate consumer debt. You should also be contributing enough to your employer-sponsored plan to maximize any potential match benefit — that’s an immediate, guaranteed return on your investment that you can’t expect from the stock market.
“Once you are on track for retirement and have additional cash to invest, you may want to consider adding some individual stocks to your portfolio,” Falcone says. “However, it is recommended to secure your financial future with diversified securities first … either through your employer’s plan or an IRA.”
You’ll also want to set some investing goals before you start trading, Falcone says. Maybe you want to invest to help pay for a new couch, a trip to the Bahamas, an engagement ring, or a downpayment on a future home.
A Wide Range of Individual Stocks
When you buy fractional shares of an individual stock, you can proportionally experience the risks and rewards you would have if you’d bought an entire share. On Robinhood, you can trade fractional shares in real-time, meaning that trades placed during market hours are processed right away. Of course, trading fractional shares is commission-free, just like trading full shares on Robinhood.
There’s also a lot of flexibility in the size of shares you can purchase — They can be as small as one millionth (1/1,000,000) of a share. Even if a stock costs a few thousand dollars per share, you could own a portion of a share for $1. Not all investments are eligible for fractional share orders. But stocks that are worth more than $1 per share and have a market capitalization of more than $25 million are eligible for fractional shares on Robinhood. (If a stock isn’t supported, we’ll let you know when you’re placing an order.) On the Robinhood app, the purchasing process is customizable, meaning you can choose to trade stocks either in dollar amounts (e.g., $5 worth of shares in Spaceship Enterprises) or share amounts (e.g., 0.002 shares of Spaceship Enterprises), with an investment of as little as $1.
Fractional shares can sometimes appeal to investors who have income to invest, but are new to picking their own stocks. Some investors might prefer to start with a small amount of money, spreading it across multiple companies or funds as an entry point into developing their own trading style and portfolio balance.
How To Trade On Robinhood ?
To trade on Robinhood is Very Simple,
2) Plug in your personal information,
3) Link ANY bank account,
4) Transfer funds,
5) Go on the page of the stock you like and click how you would like to purchase,
6) Accept contract
Is Robinhood a Good Investing App for teenagers?
It has it plus and minus areas but all in all these apps don’t really instruct on the fundamentals.
But that is not a stretch since the SEC, FINRA and most all licensing organizations do NOT require any viable instruction on Risk of Loss. Fact is, brokers and registered investment advisers are not required to learn how to use a personal financial calculator. Never could figure that out since you cannot find software to do a lot of the numbers needed to understand how money works.
You have to know how money works in the real world. Robinhood may be OK
Read more review about robinhood. This article is the opinion of several people in an internet discussion forum, disclaimer on