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What is Robinhood?
Robinhood is a trading platform that allows traders to trade penny stocks with $0 commission. Traders can use the Robinhood app to buy or sell stocks easily and quickly.
Robinhood Penny Stocks Under $1
Being a prisoner in commission-free trade, the Robinhood app has attracted millions of people to trade from its app. With the help of the bull market, the number of people that are using the app is growing daily.
There are different types of traders and investors using the app, some are long term investors who buy and hold stocks for many years while short term traders open and close a transaction within a few minutes to a few weeks.
While it is easy for a beginner to start buying and selling stocks under $1 on the Robinhood app, making money from trading is a different story.
Trading stocks under $1 requires skills and discipline. Without a sound strategy and winning attitude, it is difficult if not impossible for beginners to make money trading these hyped-up stocks.
Beginners should be aware that cheap stocks are cheap for a big reason. It is because most of the companies behind these penny stocks are not doing well, either they do not have a competitive edge in their industry, lack a product that makes a difference in people's lives, or do not have a strong leadership team.
Therefore, it is not a good idea to buy and hold this kind of penny stock and expect a huge payoff a few years down the road. In fact, don't be surprised to see a stock trading under $1 to lose 80% of its value and be trading under 20 cents in a few months. Yes, a cheap stock can get even cheaper.
How to Trade Robinhood Penny Stocks
Penny stocks are risky, but there are ways to minimize risks and make money from Robinhood penny stocks. The term high-risk and high-reward applies to penny stocks perfectly.
To trade penny stocks means to buy and sell within a short period of time rather than to hold stocks until they go bankrupt. Even though most penny stocks are not good investments for the long term, traders can still make money from price fluctuations in the short term.
With the right catalyst and good news, some penny stocks rally over 100% in a single day. While it is impossible for blue chip companies like Microsoft to double their stock price in a day or even a year, penny stocks see this kind of move on a daily basis.
The question is can we get on to that kind of stock before they make a big jump. We may not make 100% on a trade, but utilizing technical analysis and chart patterns, it is certainly possible to get decent returns for our trades.
For traders who are interested in learning how penny stocks work, and how to trade stocks under $1 with the Robinhood app, read the following articles to get started.
Step by Step Guide to Penny Stocks TradingTop Penny Stock PatternsTop 10 Mistakes to Avoid as a Penny Stock Trader
Remember, it takes a lot of time to learn about the market. Do not rush into the penny stock market before you are ready. The stock market has been around for over 100 years, and it will still be there in the foreseeable future. Start with paper trading or something to get a feel of how penny stocks work and see if they are right for you.
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