Let’s face it. Investment apps are dominating the space and any smart investor knows that during times like these, while the market may be volatile, there are also many opportunities for wealth right now. These apps, which are popular with millennials and GenX, enable investors to trade everything. That includes stock, ETFs, currency, and even cryptocurrencies apps are dominating the space.
One of the most popular investment apps is the Robinhood App.
What is Robinhood App?
Robinhood is a securities trading app. It’s accessible through your smartphone as well as desktop and enables users to trade ETFs, options, stocks, and cryptocurrencies.
Launched in 2013 by Vladimir Tenev and Baiju Bhatt, Robinhood has grown to become a trusted fintech company. Today, it boasts of more than 6 million users. Research shows that 78% of Robinhood users are under age 35. Their aim is not only to build their savings but to develop relationships with brands.
Robinhood vs. Etrade and other trading apps
E*Trade has been around for nearly four decades. The experience gained enables the company to offer intuitive trading platforms. The Robinhood app is also easy to use, but there is not much you can do to customize your experience. Other than that, you can open and fund a new account in minutes.
Trading platforms like E*Trade and Robinhood support watchlists. But E*Trade is one of the few that offers customizable charting. It also provides more order types, such as conditional orders.
When it comes to trading cryptocurrencies, Robinhood is way ahead of E*Trade. You can trade Bitcoin, Bitcoin Cash, Dogecoin, Ethereum Classic, Ethereum, and much more.
So, which is better Robinhood vs. E*Trade? Well, E*Trade is the winner as it offers more asset classes to trade like bonds, futures, and futures options. It also allows short selling and offers Robo advisory services.
10 Crucial Things You Should Know About Investing on Robinhood
The following are essential things to know about Robinhood.
1. No Account Minimum
By requiring no account minimum for its users, Robinhood has made it easier for new, inexperienced users to trade. All one has to do is download the Robinhood app, sign up, fund the account, and choose how much they are willing to invest.
2. Free Trades
Since Robinhood is a commission-free trading app, it’s an attractive option for experienced investors. Users have the option of trading stocks, ETFs, and even cryptocurrencies.
3. Easy to Navigate Mobile App
Launched in 2013, Robinhood offers a mobile app, compatible with Android and iOS devices, as a trading platform for its users. The mobile app is simple to use thanks to its clean UI. This is unlike other investment apps that get overstuffed with features.
4. Trading Comes With Substantial Risk
Although Robinhood offers a platform for users to trade even on the go, you need to know that the stock market in general comes with substantial risk. Securities such as stock and ETFs are safe investment strategies in the long term, but the market is volatile. As such, the market experiences dramatic highs and lows. So, be cautious when trading on Robinhood or any other trading source.
5. Familiarize yourself with limit orders
When trading on Robinhood, make sure that you don’t buy securities in real-time. This is because you will not get the exact security price. Why? There is a delay between when your order gets processed and when you entered the order. This could be problematic if you’re buying a highly volatile stock. If you want to buy stock safely, use the Limit Order feature to set your maximum buying price.
6. Beward of the Flashy Stocks
Robinhood markets itself to millennials and GenX as a new investment app for beginners. The problem is, the app sometimes emphasizes on high-frequency trading of flashy stocks and popular penny stocks instead of ETFs and low-risk funds. By not promoting low-risk securities, Robinhood is creating what experts call “stock picking.”
While the flashy stocks and popular pennies keep you on your feet, it’s a good idea to add some more steady and less volatile stocks.
7. Add Funds in Advance
This is a big one. Before you plan to make an order, add funds well in advance. If you fail to do so, countless opportunities will pass you by. What you need to know is that it takes at least 24 to 72 hours for funds to transfer to the app from your bank account.
8. Limited Research Offerings
If you rely on Robinhood for research, you may get disappointed. This is because the investment app lacks screeners, calculators, and other investing related tools. The good news is, you do have access to news from a variety of outlets. Use tools such as Yahoo Finance, MarketWatch and ClosingBell for research.
9. Don’t Rely on It for Education Resources
Robinhood educational resources are easy to understand. In fact, you can find a wide selection of content that can help you learn a few trading terms and concepts. The problem is, you won’t find webinars or videos that train new, inexperienced users on how to trade and build investment portfolios.
10. The Customer Service is Great, but there’s no inbound phone number
Customer support is generally handled via the Robinhood mobile app and website. Since there is no inbound phone number, users cannot call the support team for assistance. However, I’ve managed to get some pretty quick responses via email.
Robinhood is an excellent choice for new, inexperienced users. Since it allows for no minimum amount, new users can gain experience before switching to a versatile trading platform. Click here to start your account today and earn a Free Stock just for signing up!
Remember, invest what you can risk and keep learning.