Day Trading on Robinhood is a great broker to use If you’re new to day trading. Robinhood is a user-friendly platform for trading stocks. Its user-friendly interface has a lot of features that can help you make money. In this article, we will show you some tips and tricks on how to day trade on Robinhood as a new trader.
Robinhood Platform
Robinhood is a commission free stock trading app that allows users to trade stocks, options, and ETFs with zero commissions or fees. Robinhood was founded in 2013 by Vlad Tenev and Baiju Bhatt, and it has become one of the most popular stock trading apps for pattern day trading and marginal trading in recent years.
Benefits of Day Trading on a Robinhood Account
There are many benefits to setting up a Robinhood brokerage account for day trading.
No Commission Fees
Perhaps the most obvious benefit is that it’s free. There are no commissions or fees whatsoever. Commission free trading alone can save you a lot of money, especially if you trade frequently.
User-Friendly
Another benefit is that it’s easy to use. The interface is very user-friendly and intuitive. You can easily place trades among your partial or entire investment with just a few clicks.
Advanced Features and Tools
Finally, Robinhood offers some great tools and features for traders. For example, they have a “pro” version of their app which has more advanced features such as candlestick charts and real-time market data.
Overall, Robinhood is a great platform for new traders. It’s free, easy to use, and has some great features.
Disadvantages
Although Robinhood is a great platform for new investors and day traders, there are some disadvantages to using the app.
No Fractional Shares
One of the biggest disadvantages is that Robinhood does not offer fractional shares. This means that if day traders want to invest in a company but can only afford to purchase one share, these day traders won’t be able to do so through Robinhood.
No Research Tool
Another disadvantage of Robinhood is that there is no research available on the app. This means that you won’t be able to find information about a company’s financials, history, or anything else that could help you make an informed investment decision.
No Customer Service
Finally, Robinhood does not offer customer service support to day traders. If you have questions about the app or your account, you will not be able to get in touch with someone who can help.
Despite these disadvantages, Robinhood is still a great platform for new investors and day traders. If you’re willing to do your own research and don’t mind not having customer service support, Robinhood can be a great way to invest in the stock market.
Tips and Trips for Day Trading on Robinhood
1. Set Up Your Account
The first thing you need to do is set up your instant account for your day trades. There are three types of Robinhood Accounts:
Cash, Margin, and Gold
Each type of account has different rules and benefits. For example, with a cash account you can only trade with the money in your account at the time of the trade. With a margin account, you can borrow money from Robinhood to make trades. This can be helpful if you want to make a large purchase, but don’t have enough money in your account to do so. A gold account has even more benefits, like extended trading hours and access to research.
Margin Account
To day trade on Robinhood, you’ll need to open a Margin account. This can be done by going to the Accounts page on the Robinhood website and selecting “Margin” from the instant account types. Once you have a Margin account, you can day trade by using the Robinhood app to make trades.
Fees
When making trades on Robinhood, you’ll need to be aware of the fees that are associated with each trade. For example, if you buy a stock for $100 and then sell it immediately for $101, you’ll be charged a $0.01 fee. These fees can add up, so it’s important to take them into account when making trades.
2. Fund Your Account
Once you have an account, you can start funding it. You can do this by linking your bank account or using a debit or credit card.
You can fund your Robinhood account with a bank transfer, wire transfer, or cash deposit. To deposit funds into your account, log in and go to the “Transfers” page. From there, you can select how you’d like to deposit money into your account.
If you want to conduct your day trades on Robinhood, you’ll need to have enough money in your account to cover the cost of your trades. The minimum amount you can day trade on Robinhood is $500.
3. Buy and Sell Stocks
Once you have money in your account, you can start buying and selling stocks.
To get started trading, log in to your account and go to the “Trade” page. From there, you can select the stock or ETF you’d like to trade.
When you’re ready to place a trade, you’ll need to enter the following information:
-The number of shares you want to buy or sell
-The price you want to buy or sell at
-The time frame for your order (i.e. good for the day, good till canceled, etc.)
Once you’ve entered all of the necessary information, hit “Preview Order” to review your trade. If everything looks good, hit “Place Order” to submit your trade.
4. Set Up Limit Orders
You can also set up limit orders. A limit order is an order to buy or sell a stock at a certain price. For example, you could set a limit order to buy shares of XYZ stock at $50 per share.
And that’s it! You’re now one of the many day traders on Robinhood. Just remember to always practice responsible trading and only risk what you can afford to lose.
Additional Robinhood Features
In addition to the basic features offered by Robinhood, there are a few other important features for day traders to consider before you start trading. Here are some of the most important ones:
Instant Deposits
Robinhood also has a feature called “Instant Deposits” which allows you to deposit money into your account instantly. This is great if you want to buy a stock that’s about to spike in price.
Margin Trading
Margin trading allows you to trade with borrowed money, which can help you increase your profits (but also comes with increased risks). Robinhood offers this feature with up to two times your account balance.
Extended Hours Trading
Extended hours trading allows you to trade before and after the regular stock market hours. This can be helpful if you want to take advantage of breaking news or react quickly to market changes. Robinhood offers extended hours trading from
Paper Trading
Paper trading is a simulated trading experience that allows you to practice trading without actually risking any money. This can be a great way to test out your strategies and see how they work before you start using real money. Robinhood offers paper trading within the app.
Dividend Reinvestment
Dividend reinvestment allows you to automatically reinvest your dividends into additional shares of the stock that paid them. This can help you increase your position in a stock without having to use any additional money. Robinhood offers dividend reinvestment for most stocks.
Stop Loss Orders
Stop loss orders are designed to help limit your losses on a trade. A stop loss order is an order to sell a security when it reaches a certain price. Robinhood offers stop loss orders for most stocks and ETFs.
Options Trading
Options trading allows you to speculate on the future price of a stock without actually owning the underlying stock. This can be a great way to make money if you know what you’re doing, but it can also be very risky. Robinhood offers options trading for most stocks and ETFs.
These are just a few of the important features to consider when you’re starting to trade on Robinhood. Be sure to do your own research and understand the risks involved before you start trading.
Day Trading on Robinhood Rules and Regulations
As a new trader, it’s important to be aware of the rules and regulations that Robinhood has in place. Here are some of the most important things to keep in mind:
- Trades must be placed during regular market hours. After-hours trading is not allowed.
- There is a limit of three trades per day.
- All trades are final and cannot be canceled or changed.
Financial Industry Regulatory Authority
Financial Industry Regulatory Authority (FINRA) allows day trading in a margin account, but only if the pattern day trader rule is followed. This rule states that a trader can only make four trades in a five-business-day period. In order to avoid being classified as a pattern day trader, it’s important to understand what constitutes a “day trade.” A day trade is defined as any purchase and sale, or any sale and purchase, of the same security on the same day in a margin account.
Pattern Day Trader
Pattern day trading is associated with how many day trades one makes. As previously mentioned, a pattern day trader is defined in FINRA Rule 4250 as any customer who executes four or more “day trades” within five business days, provided that the number of day trades represents more than six percent of the customer’s total trading activity for that five-day period.
If you meet the definition of a pattern day trader, you will be subject to the “pattern day trader” rules. These rules include:
- The account must maintain minimum equity of $25,000.
- Trades must be placed by placing orders through a broker or other agent.
- The customer may not enter into more than four-day trades during any five business day period.
Summary: Day Trading on Robinhood
This article has reviewed tips and tricks for new traders on Robinhood. With its commission free trading, day traders and Robinhood go hand in hand. With a Robinhood account, you are presented with numerous options.
A Robinhood cash account is a brokerage account that allows you to trade stocks and other securities. Unlike a traditional brokerage account, a Robinhood cash account does not require a minimum balance. This makes it an ideal choice for new investors who want to get started with trading without having to worry about meeting high account minimums.
A Robinhood margin account is a brokerage account that allows investors to borrow money from Robinhood in order to trade securities. This type of account can be used to trade stocks, options, and other securities. Robinhood offers margin accounts with different borrowing limits based on the user’s investment portfolio.
In addition, there are a few things to keep in mind when using the Robinhood app.
First, it’s important to understand that there is a delay between when you place your trade and when it’s actually executed. This is due to the fact that Robinhood uses market orders rather than limit orders. Market orders are executed at the current market price, while limit orders allow you to specify the price at which you’re willing to buy or sell.
Also, it’s important to remember that trading is a risky activity and you can lose money. Be sure to only invest what you’re willing to lose.
One final tip for new traders: don’t get too caught up in the details of each trade. It’s easy to get wrapped up in trying to make the perfect trade, but at the end of the day, what matters most is your overall performance. So don’t be afraid to make a few mistakes along the way. With practice, you’ll get better at making trades and more importantly, you’ll start to see some success.
With these tips in mind, you should be ready to start day trading on Robinhood.
To Learn More
In addition to tips and tricks on the Robinhood App, Maurice Kenny is available to share other useful platforms, tips, and tricks for new traders.
Maurice Kenny has helped over 600 people become financially free through one-on-one coaching, mentorship, and options trading strategy. Many of these new traders are now full-time traders, and they all started by watching his 1-hr webinar.
Feel free to check out other FREE educational resources to help guide you as you begin your new journey to financial freedom.
Also, download a (FREE E-BOOK) by Maurice Kenny, “DAY TRADE LIKE A MILLIONAIRE.”
