This Robinhood App Review is for those looking to start trading stocks and others who want to open a second trading account. The biggest benefit to using the Robinhood Free Trading App is that you don’t have to pay commission fees to buy or sell stocks.
All of your trading is 100% free!
To use Robinhood you’ll need to download the app from the Apple App Store or the Google Play Store. Robinhood does not offer a computer based version. Rumor has it that a web based version is in the works, but currently all trading must be performed from your cell phone, watch or tablet. Obviously this appeals towards the younger crowd.
In my opinion I believe the Robinhood App is great way for people to start trading as they’ll save around $10 to $20 each time they buy and sell a stock. There are a few disadvantages to using the app that may prove to be a deal breaker for some.
The Robinhood App does not allow you to buy/sell in after-hours trading. If bad news is released at the close and the stock you’re holding begins to drop there’s absolutely nothing you can do about it. You’ll be forced to wait until the next trading day to exit?!?!
Short selling is also not allowed using the Robinhood App. All trades you make have to be on the long side. I believe for a broker to allow short selling you have to be setup with a Margin Account. This somewhat standard feature is not available as of yet.
Day Trading on the Robinhood App is really not advised as it takes multiple steps to place a Limit Order trade. If you decide to use Robinhood you’ll be forced to use Market Orders to buy and sell. When Day Trading a volatile stock its almost impossible to execute your trades with precision.
If your stop doesn’t get hit, you have to cancel your order and redo everything. The order process screen can be a little time consuming.
In my opinion I think the Robinhood App is best suited for Swing Traders that are trading non-volatile stocks. Penny stocks and other cheap names are subject to wild price fluctuations. The more expensive stocks are less likely to drop drastically after-hours.
The entire concept of no after-hours trading scares the hell out of me and it should scare you as well. I would not advise anyone to make the Robinhood App their primary account. I solely use the Robinhood App to test out new found trading theories and ideas.
Robinhood needs to open up after-hours trading, provide a desktop platform with access to Level II indicators and begin offering Margin. Short selling is a huge part of the Stock Market. Not being able to short a stock limits your possibilities and potential income.
Use Robinhood for training and testing purposes only as you learn the ropes.
What do you use the Robinhood App for? Please leave your comments below.