Trading stocks is something we all have heard about before, but many of us do not know where to begin. For many years, I have tried out different strategies and trading sites and have had a little success. However, all of the sites had one major problem for a small investor like me: trading fees. Robinhood.com solves this problem and many more. There has never been a better time to learn stock trading and I want to help to get you started.
To start, I am not a financial advisor or Wall Street stock whiz, I am someone who is always looking for ways to make my money work for me and enjoy sharing what I have learned over the past 20 years as a hobby trader.
My biggest issue was always the trading fees on other trading sites. They were usually $6-$10 for each buy or trade action. Some sites would charge $10 to buy and $6 to sell or some other gimmicky thing. For someone who has a few hundred dollars to play with, this means you have to pick a stock that will make you enough money to cover the fees AND extra to earn a profit. This is where I would always lose interest. It would take way too long to make that much profit when I was starting with something like $300.
Here is what it looked like: I had $300 in my account to work with. I found a stock I liked in the $20 range and wanted to invest. I would have to subtract $10 (to cover the buy fee) and then figure out how many shares I could get for $290. I could buy 14 shares at $20.71 and have $0.06 lingering in my account. In order to make back my $10, cover the sell fee, and make a profit, I would have to wait for the stock to grow. Big swings in small stocks do not happen often and this could take a couple of weeks at best.
Now, that you can see why I would lose interest, you will also be able to see why so many of us love Robinhood.com.
No fees: Robinhood.com does not charge any trade fees. I repeat $0…always.
Fractional Share Purchases: Fractional share purchases are when you are able to buy a fraction of a stock. My example above had $0.06 left over. If I was able to buy partial shares, I could have invested $290 and ended up with 14.002 shares and had every penny working for me. Robinhood.com allows you to buy a set number of shares OR invest a particular cash amount. The great thing about this feature is you can also buy fractions of expensive stocks like Bitcoin or Amazon.
Analytics: Nothing beats the in-depth company views and financial reports you can get from Yahoo Finance, but the trading charts offer RSI and MACD views (I will get into this in a later post) where many others fall short.
Free Stock: Banks used to give you a free toaster or something crappy like that when opened an account. Robinhood.com will give you a free share of stock and if you use this link: Robinhood.com to sign up, you get a free share and so do I. Most of the shares are only a few dollars, but it is still better than a toaster. P.S. I have never heard of anyone I know getting more than an $8 share of stock.
As you can see I love Robinhood.com and think everyone who has any interest at all in learning to invest, needs to start there.