Robinhood Stock Trading Review – Too good to be true?

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Robinhood Stock Trading Review

Name: Robinhood
Website: www.Robinhood.com
Price: FREE / Tiered GOLD version for margin
Overall Rank: 9.7 out of 10

Robinhood Product Overview

Robinhood has become a disruptive name in the financial market. Having had a handful of discount brokerages through, E-Trade, Scottrade, Capital One, and my bank I wondered “Why do I need so many brokerages?” And for me, it came down to I kept looking for the best value I could get for my style investing. We will see what makes Robinhood different from the rest and if it’s worth it to start over with another brokerage account.

The Good & The Bad

The Good:

  • FREE trades to buy or sell shares
  • Market or Limit Orders included
  • Options & Crytpo Trading
  • Compare stock price paid vs other users

The Bad:

  • No DRIP (Dividend ReInvestment Program)
  • Limited research tools
  • No Mutual Funds
  • No IRA accounts

 

Who is Robinhood For?

If you either want to invest in a few shares or know exactly what stock you are looking for then this may be the best new brokerage available. With all trades being FREE to buy and sell, finally purchasing a single share is more cost-effective from the $5-$10 fee to buy and sell the stock.

However, if you want to build an IRA or invest in mutual funds then Robinhood currently cannot help you attain that goal. There are some limitations to Robinhood that they may work on in the future, but if you want to use Robinhood to it’s fullest we recommend short-term investing with limits and auto-depositing to keep your money working for you.

Robinhood Tools & Support

Sadly the research tools are fairly limited compared to all the other discount brokerages. We believe this can be attributed to the vast number of sites where news and analyst ratings are readily available on any particular stock.

However, we have noticed on the new desktop version that Robinhood now shows how the current stock price compares to other Robinhood users, which can be helpful when evaluating your positions.  (See the chart for the stock GE)

They have a knowledge base and support is responsive and able to resolve issues quickly (We had to use them to finalize our free stock offer).

Robinhood Price

The best part of the primary service of Robinhood is that it is Free. Free to trade, free to buy a single share and free to sell it. This tends to be the best feature and why it’s disrupting the big name brokers.

There is an option for a Robinhood GOLD version which allows you to leverage your money for a small fee and allows you to deposit more money without it being held till it clears. (currently, the limit is $1000) If you are a more active trader, GOLD may be a good option for you but they provide enough benefit for the everyday investor that the main service can satisfy the vast majority of typical investors.

Final Opinion on Robinhood

The brokerage world is changing and it’s services like Robinhood that will start to catch on and spread and disrupt the market we’ve been so used to. However, it will involve a change, and a change of accounts is never easy for those who have longevity with their current financial organizations.

Robinhood has started as an App Only service and recently added Crypto and Desktop support. They briefly mentioned introducing a new high rate checking account but had to recall those plans to finalize how they will be insured. Who knows all that is in store, but it’s only a matter of time before they begin to move on to the next disruptive feature in the financial world.

Sign up and start your own account and they’ll give you a free share of stock to help you get started.

Verdict

Name: Robinhood

Website: www.robinhood.com

Price: Free / GOLD Upgrade Option

Rating: 9.7 out of 10

Verdicts: Legit and Recommended

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Summary
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Robinhood trading app
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14 Comments

  1. Yea!. What as an incredible blog post. I really love the way you outlined the review on Robinhood stock trading.

    I’d learnt Robinhood has really gained ground in the stock market  and going by the well analysed review I think it worth trying as I had wanted to invest in a few share. Glad to know I can signup and get free share of stock to help me get started. I’m kicking off straight away.  Thanks for this straightforward review.

    • Glad to be of help.  Many people say they find it hard to invest with just a little money, the fees and commissions are in the way and they just turn to mutual funds and buy and hold.  Over the past few months though we’ve made some amazing returns and a few negative returns, but consistently can average better than a typical long-term hold strategy.  

      Check our Day trading post where you can see stocks cycle and if you’re not selling high and buying low then you’re not making any of the money.  Just this past week (we’re getting a post ready to publish) we bought a stock and within a few days, it went up 10%.  We sold.  Why because 10% in a few days is better than none we just hold on hoping it’s going to go up more and it goes up and down and up and down for a few months or years.  The yearly return on that 10% in a few days is astronomical!  

      Once you start to get a feel for it and do it repeatedly you can find a winner stock almost everywhere and with Robinhood allowing no commissions fees you can try it on a single share first and slowly build up to multiple shares and make more with each trade.       

      I look forward to hearing how your first trades turn out.  

  2. Hi Marc,

    Thank you for this in-depth review of Robinhood Stock Trading platform. I agree with you that Robinhood Stock Trading will the next coming up and disruptive brokerage to the big name brokers in the market. 

    I like the free to trade features and the Robinhood Gold which allows us to trade before the deposited more money without being cleared.

    Is there any minimum amount to start an account and when can l withdraw the balance in my account?

    Thank you.

    • Keep in mind there is no minimum to start typically you can start with the amount needed for the price of the stock, typically I head people start with $10-$200 initially.  Also with the free version (non-Gold) if you start a transfer they will immediately allow you to start investing if that transfer amount is less than $1000.  Only if it’s more than $1000 would you need the GOLD version to allow you to have your funds fully available. 

      As far as withdrawing you can do so once your funds are cleared into the cash account.  For example, you transfer $100 and only use $50 to invest in stocks, the $50 left you can keep in the cash fund or you can withdraw it (the $50 in the cash fund is how Robinhood makes their money by earning interest on your money sitting in the cash fund).  

      If you are selling your $50 of stock you will need to wait a few days (typically 2-4 business days) for the funds to clear before they can be withdrawn.  They will immediately be available to invest again, you only need to wait the few days if you want to withdraw.  

      Hope that helps here’s to good investing.  

  3. Hi Marc,

    Thanks for writing this awesome educational and informational article. I was impressed by reading this article. If I did not read this article I could not find details about Robinhood Stock Trading. I knew less about the stock market but I did not know about Robinhood Stock Trading. After reading the article I learned a lot about it, making me interested in investing. I have many friends who make stock marketing, I think Robinhood Stock Trading will be good for them. I’m going to share this article with my friends. I also wanted to buy some shares in less investment. I am happy to find the article to help me how to sign up and start sharing stock free. I had a little bit to know, how much to invest in Robinhood Stock trading at the beginning? I’ve bookmarked this article and I’ll definitely share it with my friends.

    • Yes! 

      Robinhood is absolutely the simplest and cheapest way to get started now.  No more $1000 minimums to keep, you can start with as little as $10.  No more fees, you can buy and sell a few shares of each so you can diversify without having to worry about the transaction fees.  And by removing that spread on a stock you can make money easier than before when stocks barely move in the market.  A $1 gain on a $10 stock can now be realized instead of having to worry about the cost to buy and sell that.  

      For beginners, they have reviews of analysts as well as you can see what others are doing on Robinhood and soon can mirror some of the more active traders.   I’m putting together some of my most recent trades and will start training new investors on how they too can benefit by trading with Robinhood.

  4. Hi Marc,

    According to many opinions, investment in the stock market is very risky. Many people are losing a large number of amount in the stock market. But I think it is possible to get a lot of money from the share market through proper accounting and reliable broker house. Your review of Robinhood Stock Trading is very helpful and valuable as well. From reading this I have been able to catch a lot of things. Thank you very much for this wonderful article.

    Regards,

    Ranao.

    • Glad to help, I used to love the stock market and have been skeptical since the dot com bubble crash.  I noticed I didn’t want to sell because of the commission fees and didn’t want to add more while the market was falling,  but as it was bottoming out I did pick up a few items I held on and 10x my money, but because I was still holding on to the ‘losers’ I wasn’t able to invest that much. 

      I feel so long as you remove the emotion and media reaction from investing there are plenty of logical plays due to everyone else overexaggerating.  And removing those fees make it much easier to profit on a single share than ever before.  

  5. Hi Marc,

    By reading your blog post I came to know about Robinhood Stock Trading. Your review was very interesting and straight forward. I am fascinated. It can be done free of cost in the initial stage. So I’m thinking of doing business here in the future. Besides, I have also found more about Robinhood stock trading in Google. This company has been very specific to me. Praise you.

    • Thanks for the comment.  I’m trying to be pretty clear and to the point,  I can go into more technical reasons why it’s good (or not good) but for the majority of the users, they just want to know it will work for them and how it can best meet their needs.  

  6. Hi, I liked your article. Robin Hood’s stock market review encouraged me a lot. Robin Hood has got a Ground at Stock Business. I always think that through its own intelligence, skill, honesty and hard work, it can be demonstrated with little capital. I’m following this article. As a businessman, I will share it with my friends. Thank you.

  7. This is the most comprehensive review I have ever read on Robinhood Stock Trading. I have read about it but I have never tasted its benefits this much. Obviously the pros outweighs its cons which makes it recommendable. I wish to be a professional trader because It seems i am not getting something right with stock trading. I have burnt my account several times. I hope this article will change my life for good

    • Glad you can get started and put into practice some of our trading techniques.  With the zero commission, you should be able to see many profits than before in your previous brokerage accounts.   

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