Things you cannot do in the Robinhood app

Things you cannot do in the Robinhood app

6 things you cannot do in the Robinhood app 

The Robinhood app like you know is a very stylish, easy-to-use and free stock trading application that has helped a lot of the Millennial generation investors join the stock trading gig in the past few years. The Tech-driven approach to brokerage, the digital and financial expertise that is reflected in the app makes it irresistible.

There are however some things or features that are not yet available in the app, which when added will make the user experience better. Some of them include:

Robinhood is not built around Day trading; rather, it is basically designed for people who are interested in longer-term investment. For people who want to research and buy a stock and hold it until profit is realized. Though it is possible to day trade using Robinhood, there are however several limitations.

For stock trading novices, Day trading has to do with the buying and selling of a stock or security on the same business day. Day trading can only be done full time on an equity account (which must end each day with a minimum of $25,000) in the Robinhood app.

As for the Robinhood Instant and Robinhood Gold accounts, the limit is 3-day trades a week. Exceeding this number of trades will result in your account being flagged off as Pattern Day Trade (PDT). This means that your account will be restricted from day trading for 90 days unless you end a business day with a balance above $25,000.

Short selling

Short selling which involves borrowing stocks (stocks you predict will fall in price) from a Broker or Lender, selling at the current market price, buying it back (when price fall) and returning it to the Broker or Lender, is not possible on the Robinhood platform.

Short selling is quite popular and it is used by investors to capitalize on a potential decline in a specific security or stock market while Hedgers use it to protect their gains or to mitigate losses in a security or portfolio. The inability of Robin Hood users to use this feature is a drawback.




Bracket orders

Bracket orders are orders designed to limit your losses and lock in your profits by “bracketing” an order with two opposite side orders. It involves the bracketing of a BUY order with a high side sell limit order and a low side sell stop order and bracketing a SELL order with a high side buy stop order and a low side buys limit order. These orders are beneficial in three (3) ways

  1. It gives you flexibility, to set up a plan before and after establishing a position.
  2. It is an automated process that makes your trade more efficient.
  3. It also gives you an automated risk protection for your open positions. Despite the many useful benefits of bracket orders in stock trading, it is not achievable with the Robin Hood app.
  4. Time and sales

 

Times and sales (AKA Tape)

You cannot do times and sales in the Robinhood app. Times and sales is a tool that shows every trade that has been executed along with the size and time of the trade. It gives a clear picture of what happens within a trade. This tool is super useful and important for active stock traders, because it shows you how shares or stocks are being executed, at what price and whether other traders are being aggressive about that particular share or stock or not.

It also helps you to know where the entry and exit points are and where important trade levels are. You will agree with me that the unavailability of this all-important tool on the Robin Hood app is a disadvantage for users.

Joint account

On several other stock brokerage platforms, it is possible to have a Joint account, but the Robin Hood app does not support this yet. The Joint account allows two (2) or more people to jointly own an account with an equal or specific proportion of account assets. The benefit that partners enjoy while building assets together on a Joint account and the sustainability that is assured by this partnership is a major reason why people continue to choose the account option.




Custodial account

The choice of having a Custodial account is something the Robinhood app users do not enjoy yet. With the Custodial account, an account can be established by an Adult on behalf of a minor (who is the beneficiary). Assets on this account get transferred to the beneficiary as soon as he or she turns 18 years old. This type of account allows parent invest for their children in the long term and provides an opportunity for the younger generation to have a stake in the stock market.

Research

Robinhood cannot be relied on for Research on stocks. This is because it only provides one (1) year stock and dividends history, which might not be enough when you wish to see the bigger picture. Users of the Robinhood app will have to resort to other tools to get the bigger picture when they need it. The bigger the picture the, better your choices and decisions.

To avoid falling into some pitfalls, do not buy in real time when using the Robinhood app, instead choose the ‘Limit Order’ option, which allows the app execute your buy when the market is at your price or less. Second to that, always keep your account funded to avoid missing great opportunities. Since it takes about 3 days for transfers or returns on sales to be cleared, it is important to keep your account always funded to avoid being short on cash to make some important buys.

Growth and improvement are two basics for excellence. The Robinhood app, in my opinion, is an excellent app, though there are still a number of features (as stated above) users will benefit from that needs to be added to the platform.

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