Robinhood Review: The Free Trading App
Website design By BotEap.comAbout two weeks ago I downloaded a fairly new trading app called Robinhood and thought I’d share my initial review with you today.
Website design By BotEap.comI have wanted to trade stocks for a long time, but the fees that come with trading or going to a broker always got in the way. If you’re like me and don’t have a lot of money to trade, these fees can reduce your profits. Robinhood enticed me to sign up not only because the app is free, but also because a promotion allowed me to get free shares when I signed up.
Website design By BotEap.comIs it worth downloading Robinhood?
Website design By BotEap.comIt’s been a long time since I’ve been excited about making any kind of money online. The internet has become too saturated in almost every market and many companies seek to trick you into making a quick profit, while you make nothing. Robinhood is not that company.
Website design By BotEap.comBy signing up for the app, you attach Robinhood directly to your bank account. I ended up getting a free share in Fit Bit and eventually ended up selling that share. Robinhood notes that there’s a 1 in 1,000 chance you’ll pick a big-name stock like Apple. From the first stock I got along with 4 I now got from referrals, the best stock I received was valued at $10. Nothing big, but free money is free money. You must hold the shares for 3 trading days before you can trade or sell your shares.
Website design By BotEap.comHow does Robinhood make money?
Website design By BotEap.comJust like a bank, Robinhood makes money (and can give away free shares) because it charges interest on the money you put into your account. As long as your customer acquisition costs are below your interest earnings, Robinhood will be a profitable business. Seeing that some users have over $100,000 in their account, you can easily see why Robinhood can offer free trades.
Website design By BotEap.comThat doesn’t mean it’s perfect.
Website design By BotEap.comDay trading is something you cannot do unless you have more than $25,000 in your account. I think you can get trades as long as 3-4 days in a 5 business day period, or you could be labeled a pattern trader. With that being said, Robinhood can be used for swing trading and long-term investments.
Website design By BotEap.comWhat about the interface?
Website design By BotEap.comRobinhood’s interface is very basic and basic. Although I haven’t had a chance to dive into the Gold Membership, here’s what I’ll say:
Website design By BotEap.comI DO NOT recommend using Robinhood to decide when to buy and sell a stock. Instead, supplement the Robinhood app using market clock and Bar graphic to get the information you need before trading.
Website design By BotEap.comBuying a share with Robinhood is very easy.
Website design By BotEap.comWith basic membership (which is free), you get up to $1,000 that you can use of Robinhood’s money, while you wait for your money to be transferred from your bank account to buy a share. In short, you get the shares immediately (with money from Robinhood) until the money is transferred from your bank account. This is great, as it’s critical to get into the right price points; Especially with swing trading.
Website design By BotEap.comOptions trading is also another possibility within Robinhood.
Website design By BotEap.comYou will have the ability to set up contracts. That said, I’m relatively new to the stock market, so all I’ve really dabbled in is buying and selling stocks.
Website design By BotEap.comHow much money can you earn with Robinhood?
Website design By BotEap.comThe other question might really be, how much money can you lose? If you’re playing the stock market and don’t know what you’re doing, it’s quite possible that you’ll end up losing (and not making any money) with this app.
Website design By BotEap.comI am not a financial adviser, therefore I cannot offer financial advice. What I can say is that I would definitely recommend reading books on how to trade stocks successfully and then practicing on a simulation app. before using real money.
Website design By BotEap.comGeneral rating:
Website design By BotEap.comOther than the fact that you can’t day trade on Robinhood, unless you have more than $25,000 in your account. If you’re looking to buy and sell stocks for the first time without any trading fees, this app is probably worth a try.
Website design By BotEap.comI give Robinhood a rating of 4 out of 5. The app is very basic and makes it easy to buy and sell shares. Unfortunately, the app is also so basic that you’ll want to use Market Watch and Barchart before making any purchasing decisions.
Website design By BotEap.comYou could make a lot of money from this app, but you could also lose a lot of money.
Website design By BotEap.comAt the end of the day, Robinhood can be a great way to make money, but if you’re not sure what you’re doing, you could also lose money. Would I replace my Roth to finance this application? Of course not. But I would use Robinhood to supplement my income through smart investing and referring family and friends to the app for more free shares.