Top 7 Robinhood Penny Stocks to Watch in March 2024 (2024)

Penny stocks on Robinhood, typically priced at $5 or less per share, offer opportunities for traders who are building small accounts. While these stocks are affordable, they often come with higher volatility and require different strategies from those used for larger, more established stocks. For beginners, Robinhood provides a straightforward entry point into penny stock trading, thanks to its policy of no trading fees and no required minimum deposit. However, traders with more experience might consider other brokers that offer advanced features and tools for more complex trading needs.

7 Robinhood Penny Stocks To Watch

My top Robinhood penny stock watchlist picks for March — based on pattern, price action, and catalyst — include the following:

The penny stocks on this list are some of the craziest movers on the market …

Only trade these stocks if you have a solid plan and an understanding of the risks involved. I don’t trade until I see a setup I like.

Jump ahead to get to my trading plans for these top Robinhood penny stocks!

What Is a Penny Stock?

Penny stocks are low-priced shares of small companies, typically trading for less than $5 per share. They’re known for their high volatility but also for their potential for significant returns. These stocks are generally considered high-risk investments but can offer substantial rewards for those who know how to navigate the market effectively.

Understanding Penny Stocks

Penny stocks are usually not listed on major exchanges and often belong to companies with low market capitalization. They’re considered high-risk because they’re susceptible to market manipulation and lack liquidity. In my years of trading and teaching, I’ve found that understanding the fundamentals of a company is crucial when dealing with penny stocks.

Penny Stock Volatility

These stocks are highly volatile, meaning their prices can skyrocket, but they can also plummet. This volatility is due to low trading volumes and limited information available to the public. I’ve seen traders make a killing in penny stocks by understanding this volatility and making informed decisions.

Can You Make Money on Penny Stocks?

Yes, you can make money on penny stocks, but it’s not as straightforward as it seems. The high volatility means the potential for both significant gains and significant losses. I’ve taught many traders who’ve made substantial profits in penny stocks by following a disciplined trading plan.

Having a trading plan isn’t just a one-size-fits-all deal. Your plan should be flexible enough to adapt to different market conditions and types of stocks. For instance, the stocks to watch this week might not be the same as those you should watch next week. Market trends change, and your trading plan should be agile enough to change with them. If you’re looking for a fresh set of stocks to keep an eye on, here’s a curated list of stocks to watch.

Trading on Robinhood

Robinhood is a popular platform for trading penny stocks because it offers commission-free trades. However, it’s essential to understand that Robinhood has limitations, like the unavailability of certain stocks and limited research tools. In my courses, I often discuss the pros and cons of various trading platforms, including Robinhood.

Robinhood Penny Stocks Market

Robinhood does offer a range of penny stocks, but they’re limited compared to other platforms. The app is user-friendly, making it a popular choice for beginners. However, I always recommend that my students diversify their trading platforms to access a broader range of stocks.

What Is a Good Penny Stock To Buy on Robinhood?

There’s no one-size-fits-all answer to this question. A good penny stock has strong fundamentals, high trading volume, and a positive news flow. I’ve shared specific recommendations in my newsletter, focusing on stocks with high growth potential.

What To Consider When Trading Penny Stocks

When trading penny stocks, several factors need to be considered for making informed decisions.

Price Action

Price action refers to the movement of a stock’s price and is crucial for predicting future price movements.

Remember: the trend is your friend. Understanding price action can help you identify profitable trends.

Understanding market trends goes beyond just looking at the stocks that are hot on Robinhood. The energy sector, particularly oil, often has penny stocks that show significant volatility. These oil penny stocks can be a goldmine for traders who understand the market trends in the energy sector. But remember, these stocks come with their own set of risks and should be traded carefully. If you’re interested in exploring this further, here’s a guide on oil penny stocks.

Unusual Volume

Unusual trading volume indicates strong investor interest and can be a sign of an impending price move. In my trading career, I’ve found that high volume often precedes significant price action.

Real News

Always look for stocks that have a strong news flow. Real, impactful news can be a significant price driver. I teach my students how to differentiate between impactful news and noise.

Scam Possibilities

Be cautious of scams and pump-and-dump schemes. These are prevalent in the world of penny stocks. I’ve seen traders lose their entire investment by falling for these scams.

List of the Hottest Penny Stocks on Robinhood in March 2024

My top 7 Robinhood penny stocks to watch for March 2024 are:

• NASDAQ: SOUN — SoundHound AI Inc — The Earnings Loser With the NVIDIA Catalyst
• NASDAQ: BETS — Bit Brother Ltd — The Low Float Bitcoin Breakout Stock
• NASDAQ: SMCI — Super Micro Computer, Inc — The AI Breakout That’s Moving Like a Penny Stock
• NASDAQ: AXTI — AXT Inc. — The Next SMCI??
• NASDAQ: CXAI — CXApp Inc — Proof That AI Penny Stocks Are on Fire Right Now
• NASDAQ: LUNR — Intuitive Machines Inc — The ‘Mission Accomplished’ Space Stock
• NASDAQ: OCEA — Ocean Biomedical Inc — The Biotech Former Runner on Another Run

I try to focus on the momentum that I can see with my eyes. I’m not going to speculate on future moves.

The key is to approach every day the same. Be prepared to capitalize on volatility.

I let the trades come to me.

That’s why I’m not holding any long-term positions in these tickers.

I’m just watching these stocks. And this is one of many watchlists I maintain…

Sign up here to get my weekly watchlist each Sunday!

There’s no guarantee that any of my watchlist picks will be tradeable. But if something happens, smart traders should be ready.

Here’s some background info on Robinhood penny stocks:

• What is the most promising Robinhood penny stock?

A stock with a lot of volatility like SoundHound AI Inc (NASDAQ: SOUN) is a promising Robinhood penny stock. But remember — we’re traders, not investors. We’re watching the stocks on this list for short-term volatility that we can trade, not predicting which of these stocks will still be around in 2030.

• What are the top 3 Robinhood penny stocks to buy now?

My top 3 Robinhood penny stocks to buy now (as long as their price action is strong) are SoundHound AI Inc (NASDAQ: SOUN), Bit Brother Ltd (NASDAQ: BETS), and Intuitive Machines Inc (NASDAQ: LUNR).

• Which Robinhood penny stocks have a “Strong Buy” analyst rating?

Analysts don’t give any Robinhood penny stocks “strong buy” ratings. These stocks are sketchy and unstable — you should never “invest” in them. Always trade with a plan.

Let’s get to the picks …

Best Robinhood Penny Stocks for March 2024

These are the top 7 Robinhood penny stocks to watch in March 2024…

They have a chance to catch fire…

Watch them — and don’t get burned!

SoundHound AI Inc (NASDAQ: SOUN) — The Earnings Loser With the NVIDIA Catalyst

My first Robinhood stock pick is SoundHound AI Inc (NASDAQ: SOUN).

Past spikers can spike again.

This is a HUGE former runner from 2023 when the AI boom began. The price spiked 410% that year.

The company works in “conversational intelligence”. It helps business people communicate if there are language barriers.

It’s always good to remember that a lot of trashy penny stocks spike hundreds of percentage points. But then they come crashing down.

That’s what SOUN’s chart looked like …

But on February 15 it was announced that NVIDIA Corporation (NASDAQ: NVDA) bought a stake in SOUN.

It’s possible for penny stock prices to rally and push to new all-time highs. But it takes a BIG catalyst with a lot of trading volume to push through all the bagholders sitting at the highs.

NVDA is the star of the U.S. stock market this year. Prices surged to new all time highs when the company announced bullish earnings on February 21.

SOUN gapped up when we learned NVDA bought stake in the company. And when NVDA announced earnings on February 21, SOUN used that momentum to surge through recent highs.

Since the spike, SOUN announced an earnings report of its own.

On February 29 the data showed an earnings per share of -$0.07 (which missed by $0.01), and a revenue of $17.15 million (which missed by $0.6 million).

It wasn’t as bullish as traders might have liked and the stock dipped. Take a look at the chart below:

But it’s still posting revenue. And that’s more than we can say about most penny stocks.

It’s possible the price rallies off of support. Keep an eye on this former runner that’s on the move again!

Bit Brother Ltd (NASDAQ: BETS) — The Low Float Bitcoin Breakout Stock

My second Robinhood stock pick is Bit Brother Ltd (NASDAQ: BETS).

In case you hadn’t noticed, Bitcoin (BTC) is eyeing new all-time highs …

The 2024 momentum is due to the SEC’s approval of certain Bitcoin ETFs.

This marks the first ‘regulated’ crypto assets available in the U.S.

And despite the drastic selloff and exposure of crypto schemes in 2022, the new regulation inspired this recent surge.

For those still queasy about buying BTC … you’re not alone. And there’s still a way to profit from this momentum.

Focus on crypto-related stocks.

BETS’ volatility is growing as the Bitcoin run continues. Here’s a chart of the most recent activity from February:

It’s also a huge former spiker from the crypto run in 2020 and 2021.

StocksToTrade shows the float is only 191k shares. That’s well below our low-float goal of 10 million shares or fewer.

The low supply of shares helps prices spike higher when demand increases.

Keep an eye on Bitcoin and get ready for the next move on BETS.

Super Micro Computer, Inc (NASDAQ: SMCI) — The AI Breakout That’s Moving Like a Penny Stock

My third Robinhood stock pick is Super Micro Computer, Inc (NASDAQ: SMCI).

SMCI is a mega-cap stock that is set to join the S&P 500 this year …

Usually, we trade low-priced stocks because:

• We can load up on shares.
• The low price helps the stock spike higher from a percentage perspective.

Higher priced stocks aren’t known to surge like volatile penny stocks. But the AI sector is so hot in 2024, we’re seeing some INSANE moves from big stocks. SMCI and NVDA are great examples.

I used to trade large-cap stocks before I found Tim Sykes’ strategy for big percent gainers. I still keep an eye on larger stocks because the momentum helps to influence small-cap plays.

Right now I’m watching SMCI because its chart looks exactly like a penny stock’s.

In 2024, prices spiked 280% despite starting the year above $250 per share.

Look at this insane vertical move, pullback, and gap up to new highs:

I know this runner is out of bounds for most small-account traders.

But … When large-cap stocks behave like volatile penny stocks, it’s possible to trade them for lower prices using options.

At the mention of “options” a lot of traders shy away. But it’s not as confusing as you might think.

An option is a contract that gives you the right to buy or sell shares of a stock.

Theoretically: If you think SMCI is going to trade higher in the future, you could buy a contract and then sell it after SMCI spikes without actually buying any shares of SMCI.

It’s not as easy as that. I personally wouldn’t mess with options without learning from a successful options trader like Ben Sturgill, someone with verified profits and a tested strategy.

There are so many opportunities to profit in this market. Pick a strategy that sounds good to you and hit the ground running!

AXT Inc. (NASDAQ: AXTI) — The Next SMCI??

My fourth Robinhood stock pick is AXT Inc. (NASDAQ: AXTI).

AXTI announced earnings in the afternoon on Thursday, February 22.

This is a direct excerpt from the earnings call:

“Sales grew 10% in the quarter with early signs of recovery in the power market and brand new demand related to artificial intelligence.”

– Dr. Morris Young, Chief Executive Officer of AXTI

Shares started to move during after-hours. The stock has already put in a 130% move.

This stock reminds me of a lower-priced SMCI …

I’m not saying it’s going to run to $1,000 like SMCI did. But the price similarly continues to push higher after a solid earnings announcement.

Look at the similarities here:

On January 18 during after hours, SMCI alerted possible bullish earnings set for January 29:

On February 22 during after hours, AXTI announced positive earnings:

Pay attention to key support levels on AXTI. The price could push higher!

CXApp Inc (NASDAQ: CXAI) — Proof That AI Penny Stocks Are on Fire Right Now

My fifth Robinhood stock pick is CXApp Inc (NASDAQ: CXAI).

This is a HUGE former spiker.

And past spikers can spike again …

CXAI ran 1,400% in April of 2023. There wasn’t even any news that sent it higher. It’s just an AI sympathy play.

That’s how powerful this sector is. There are AI penny stocks spiking without any news.

This time, CXAI ran in anticipation of earnings in 2024. The Nasdaq shows CXAI is set to announce earnings on March 5 …

In anticipation, the price spiked 170% and it’s consolidating right now.

The float is only 10.7 million shares. The low supply could help prices push higher.

There’s major support at $2, and the breakout level is around $3.50.

Intuitive Machines Inc (NASDAQ: LUNR) — The ‘Mission Accomplished’ Space Stock

My sixth Robinhood stock pick is Intuitive Machines Inc (NASDAQ: LUNR).

This is a REAL space play, shockingly.

Most penny stocks are trash companies that don’t actually do anything.

But when Elon Musk is involved … You know something’s going down.

Or in this case: Up.

LUNR’s Nova-C class lunar lander launched into orbit from NASA’s Kennedy Space Center in Florida at 1:05 A.M. Eastern, February 15. It was attached to SpaceX’s Falcon 9 rocket.

Musk is CEO of SpaceX, and LUNR is currently the closest thing to trading his private venture.

So far … the mission is successful.

The moon lander, named Odysseus, landed on the moon on February 22.

LUNR share prices spiked 230% prior to the landing.

StocksToTrade Breaking News alerted the February 20 move at 8:27 A.M. Eastern:

33% GAIN off of $LUNR!🔥

Retweet & favorite if you caught a piece of this move!👀

Get the Next Alert 🚨👇https://t.co/YaHBqQzn5V #DayTrading #StocksToWatch pic.twitter.com/Ru23PFM8UE

— StocksToTrade (@StocksToTrade) February 20, 2024

But since the lunar landing, LUNR prices dipped lower.

A common phenomenon among stocks: Buy the rumor, sell the news.

When there’s public news that everyone knows about ahead of time, traders buy in anticipation. But since everyone knew about the news, when the event comes to pass, only sellers are left.

We can trade the momentum before and after a public event. But we don’t want to hold shares through the announcement.

Ocean Biomedical Inc (NASDAQ: OCEA) — The Biotech Former Runner on Another Run

My seventh Robinhood stock pick is Ocean Biomedical Inc (NASDAQ: OCEA).

Past spikers can spike again.

OCEA ran 690% in February 2023. And it spiked again in February 2024.

This is purely a biotech sympathy play. The biotech sector is red hot right now. Second only to the AI/tech sector.

And since OCEA has a float of only 3.1 million shares, its price is more subject to volatility.

On February 29 it announced plans to present its “first-ever human data” at the 2024 APASL Global Liver Meeting set for March 27–31.

Don’t hold shares through the conference. Remember LUNR?

OCEA already spiked to new highs in anticipation of the meeting, a 780% run.

And thanks to the 3.1 million float. It could spike even higher.

Robinhood Stocks Under $5

The appeal of hot sector stocks on platforms like Robinhood, especially those classified as penny stocks, is compelling for a growing number of traders. The energy and technology sectors, for instance, are witnessing rapid growth and innovation, making stocks within these domains particularly attractive for those on the lookout for the next breakout investment. The allure lies in the potential for substantial returns on investment, as even minor developments or positive news within these sectors can lead to significant price jumps.

It’s important to trade these stocks with caution and a well-thought-out strategy. The inherent volatility of penny stocks, combined with the speculative nature of hot sectors, underscores the importance of a meticulous trading plan. Before diving in, ensure you’ve done your due diligence, looking past the initial excitement to assess the true potential and risks of these ventures. It’s wise to trade these stocks rather than invest long-term, given their unpredictable nature.

Success in trading hot sector stocks priced under $5 on platforms such as Robinhood hinges on a selective and strategic approach. The goal is to tap into the explosive growth potential of sectors like renewable energy and technology while implementing robust risk management practices. By zeroing in on companies making headlines in their specific niches, traders can seize opportunities for disproportionate gains. This strategy, coupled with a disciplined approach to maintaining a tight investment strategy and promptly cutting losses, can pave the way for trading success in these dynamic market segments.

Types of Penny Stocks on Robinhood

Robinhood is a retail-focused brokerage. That means it only allows clients to trade on major exchanges such as the NYSE and the Nasdaq.

There are a ton of stocks below $5 on these exchanges. The problem is, you’re only getting part of the pie.

The OTC markets and pink sheets also offer a huge range of volatile penny stocks … But you’ll need a different brokerage account to trade them. Robinhood won’t cut it.

For those interested in exploring penny stocks on other platforms, I have a whole series of articles on the topic! Learn more about using E-Trade for day trading to expand your trading horizons and discover how different platforms offer unique features.

Check out this post for the lowdown on how to find the best brokerage for you.

How to Find Penny Stocks on Robinhood

Don’t follow my stock picks blindly. You’ve gotta become self-sufficient. Sure, you can find penny stocks on Robinhood’s mobile app…

But I recommend creating your watchlists from your laptop — it’s a lot easier. Use a screener to search for stocks below $5. You’ll probably want to find some with volume too.

But it’s impossible for one person to watch every penny stock on Robinhood. So either grab a couple of friends to help you stare at hundreds of stocks … or choose a few that show good potential.

Reddit is a popular choice for researching trading trends and connecting with other traders. If you’re looking to broaden your knowledge and explore other resources, consider reading about penny stocks on Reddit to see how social media influences trading trends.

How to Choose Penny Stocks on Robinhood

Choosing penny stocks to trade requires a number of well-planned steps. Doesn’t matter which broker you use.

It’s all about finding hyped-up stocks. Then you ride the momentum and jump off before the move crashes. That can make it sound easy. It’s not. It takes years of education and planning to learn how to ride the momentum in this niche.

But here’s a quick overview…

First, look at stocks with hype. Maybe there’s a news catalyst that day. It could be trending on social media, or maybe it’s just a current hot stock.

Next, make sure that the stock’s daily trading volume is high enough to allow you to get in and out easily. Remember to manage risk.

It’s also important to check the price action on the stock chart. Reading the chart can help you pick a perfect entry position. It can also show good places to set your stop loss and help you understand what the stock’s next move might be.

Chart reading doesn’t have to be complicated. In fact, many seasoned traders look for clean and simple chart patterns.

Keeping up with news, watching the charts, and analyzing trading volume can all be done on a number of different apps … But if you want to get serious about your trading, there’s a much more effective way to do all of these things…

Get a 14-day trial of StocksToTrade for just $7 for access to one of the most powerful stock trading tools on the planet.

How to Trade Penny Stocks on Robinhood

If you’re gonna trade penny stocks on Robinhood — or anywhere else — you better know the restrictions.

Every platform has its own set of advantages and disadvantages. If you’re curious about how other platforms handle penny stocks, TD Ameritrade is another popular choice for day trading — especially after its merger with mega-broker Charles Schwab. Enhance your trading strategy by learning about TD Ameritrade for day trading, and find the approach that best suits your needs.

Pattern Day Trading Rule

You have to keep the pattern day trading (PDT) rule in mind. This rule isn’t specific to Robinhood. If you have a small account, it can affect your trading.

The rule limits traders to no more than three day trades within a rolling five-day trading period. That is unless you have $25K or more in your trading account.

It can seem inconvenient — especially for new and excited traders — but it’s actually meant to protect you. Most traders lose money. The PDT rule tries to stop newbies from overtrading.

Try to see it as a good thing. It’ll force you to only focus on the best trades. That’s the best study tool there is.

Robinhood Day Trading Limit

The PDT rule can be a big problem for some traders. But again, I encourage you to see it as a good thing. No, you don’t have to listen to me…

Just like when I said that I didn’t think Robinhood had the best day trading software around. You can use it if it works for you. But understand that different brokers can work better for different people.

Don’t limit your options by choosing one just because it’s easy.

This is important, so pay attention. Do your research. Only you can decide which broker and trading platform are right for you.

Decide whether you’ll trade with a cash account or use margin. Margin is automatic on some Robinhood accounts. That can be risky. Read more about margin here.

You also need to figure out if you want access to extended-hours trading. That can also come with risk. I don’t recommend that for new traders.

What’s key is access to charts, watchlists, stock research, Level 2 data, and indicators. You can get all that and more with StocksToTrade. Plus you can trade right from the platform with our broker integration — and you can add on what’s arguably the trading chat room.

When you start trading you have a lot of decisions to make. So take your time. Make a detailed list of what matters to you, then find the right broker and trading platform.

Robinhood Penny Stocks to Watch: How to Make Your List of Penny Stocks

When you build the habit of searching for the best stocks and trading setups, you’ll quickly develop a list of stock tickers that’s long. It happens to every trader…

That’s where watchlists come in handy. It’s your personal collection of stock tickers that you think show potential. Most traders keep multiple watchlists, such as one for a certain sector and others for specific chart setups. How you organize it is all up to you.

Need help with your watchlists?

Sign up for my no-cost weekly watchlist and I’ll send you my top picks for the week every Sunday!

Should You Trade Penny Stocks on Robinhood?

Robinhood can be more popular with newer traders. But as traders progress past newbie status, they tend to switch to a more robust platform.

Whether you should use Robinhood to trade penny stocks is up to you. But before you make a decision, you should know the advantages and disadvantages that come along with it.

Let’s take a look at a few.

Advantages

• Free Trades: There are no commission fees with Robinhood trades — that’s one of its biggest draws. But realize they gotta make money somehow. And that could potentially affect the quality of your trade executions
• No Account Minimum: Traders can start right away because there’s no account minimum.
• Ease of Use: More people are on their smartphones a lot these days. Robinhood’s app can make signing up for and funding an account quick.
• Streamlined Interface: One of Robinhood’s drawbacks is that it lacks the tools and resources other brokers have. But its focus on simplicity can be useful for less-knowledgeable traders. Just know that as your skill set expands, you’ll likely outgrow this platform.
• Fractional Shares: Robinhood has fractional shares. That means traders can pay as little as $1 for a portion of a share, even if that share’s full price is hundreds of dollars.

Disadvantages

• No OTC Trades: One of the biggest disadvantages of using Robinhood is that it doesn’t allow OTC trades. If trading penny stocks is your strategy, that takes a huge amount of low-priced stock opportunities off your table.
• Poor Phone Support: If you’re trading with real money, you want to know your broker will be there for you if you need help. Communication may be getting better at Robinhood, but seems to be slow going.
• App Dependability: Look online and you’ll see complaints about Robinhood’s app reportedly failing at crucial times. This is a serious concern for traders using real money.
• Limited Functionality: Robinhood lacks the tools and resources more experienced traders expect.
• Potentially Delayed Data: Stock quote data may be delayed as much as 20 minutes. Yep, that’s a problem if you’re trading low-priced stocks. They move fast.

How to Manage Risk on Robinhood

In Hollywood movies, stock traders are often portrayed as high-octane risk-takers. But in reality, the habits of most successful traders aren’t quite as exciting.

The first thing smart traders think about before entering a trade is how to manage risk.

It means you don’t lose more money than your trading plan allows. It’s important to be able to exit positions easily with little stress. When you have a bad day in the market, at least you’ve done your best to protect your account and live to fight another day.

One way to manage risk is to set stop-loss levels. You can place an order with your broker to close a position if you lose too much money. For those disciplined enough, top traders set mental stops and manually close positions that hit loss limits.

Traders can place stop-loss orders from the Robinhood app. They should work as long as there’s enough trading volume in your stock.

Can You Get Rich Trading Penny Stocks?

I hate this question.

Look, you can get rich doing just about anything. Go to med school and become a brain surgeon. Sell the finest underwater woven baskets the world has ever seen. Brew kombucha in your garage. Pump penny stocks.

OK … some of those might be a stretch. My point is anything is possible.

But day trading is hard. Day trading penny stocks on Robinhood can be even harder.

It’s not impossible to get rich in this niche. But be realistic with your expectations. Nothing good ever came from lying around on your butt thumbing through stock pick articles.

If you’re serious about trading penny stocks, start taking your education — and trading strategies — seriously.

I have a ton of resources available to help you on your quest:

• Sign up for my weekly watchlist here.
• Get Oracle’s NO-COST trade alerts.
• Join Daily Income Trader for daily workshops and pro-level resources!

Trading Fees on Robinhood

Robinhood offers commission-free trades, but it’s essential to understand that “free” doesn’t mean there are no costs involved. The platform makes money from order flow, which can impact the execution price of your trades. Always consider the full range of fees and how they can affect your profitability.

Quick Tips to Making Money With Penny Stocks

If you’re looking to make money with penny stocks, here are some quick tips based on my years of trading and teaching.

Conduct Thorough Research

Don’t skimp on research. The more you know about a company, the better your trading decisions will be.

Trade Penny Stocks with High Trading Volume

High volume often means there’s more liquidity, making it easier to enter or exit positions.

Diversify Your Investments

Diversification isn’t just about different sectors; it’s also about different types of stocks within those sectors. Take biotech stocks, for example. They can offer a different risk-to-reward profile compared to traditional tech stocks. Biotech companies often have groundbreaking research and patents that can either skyrocket or plummet based on clinical trials or FDA approvals. This unique dynamic can offer traders like us more opportunities to spot high risk-to-reward setups.

If you’re interested in diversifying your portfolio with biotech stocks, you should check out this list of top biotech stocks.

Use Stop-loss Orders

Stop-loss orders can protect you from significant losses. I’ve seen traders save their accounts by using stop-losses effectively.

Avoid Emotional Trading

Emotions have no place in trading. Stick to your trading plan and don’t let emotions cloud your judgment.

Understand the Risks Involved

Understanding the risks is crucial. Penny stocks are not for everyone, and they come with high volatility and less regulatory oversight. Always do your due diligence and understand the risks involved.

Beware of Pump and Dump Schemes

Pump and dump schemes are prevalent in the world of penny stocks. Be cautious and always do your research before jumping into a trade. I’ve seen traders lose significant amounts of money by falling for these schemes.

Set Clear Profit Targets

Setting clear profit targets can help you lock in gains and avoid significant losses. I’ve always said, “Remember — we’re here for the long haul. We’re here to identify high risk to reward setups.”

Stay Updated with Market News

Keeping up-to-date with market news can provide you with the information you need to make informed trading decisions. In my courses, I teach traders how to interpret and act on market news effectively.

Consider Seeking Professional Advice

If you’re new to penny stocks, consider seeking advice from a professional. While I provide educational content to help traders make informed decisions, a personalized consultation can offer targeted advice.

What Is the Minimum Needed to Buy Penny Stocks?

The minimum amount needed to buy penny stocks varies depending on your broker and the specific stock. However, it’s crucial to only invest money you can afford to lose. I’ve seen traders get into trouble by not following this simple rule.

Key Takeaways

Trading penny stocks, particularly for new traders, can be an effective strategy to grow your trading account. Drawing on my experience in the market, I can say that platforms like Robinhood offer a decent starting point for beginners, mainly due to their absence of fees and minimum deposits. However, it’s crucial to recognize that Robinhood lacks several features that I consider essential in a trading broker. As you gain more experience, I strongly suggest transitioning to a more comprehensive broker.

Here are a few key points to keep in mind:

• Be cautious with penny stocks: Many of these stocks have a questionable reputation — for a good reason! When trading penny stocks on Robinhood, be aware that the risk is often amplified due to the lack of extensive company information and the prevalence of questionable promotional tactics.
• Potential for significant gains: I like trading penny stocks because you can conservatively trade while still achieving substantial gains. These stocks have the potential to go supernova, and smart traders can protect themselves by focusing on “the meat of the move.”
• The companies are often in their early stages: A number of penny stocks on Robinhood represent relatively new companies. This means their market trajectory and valuation can change dramatically, presenting both opportunities and risks.

Although I’ve provided a list of seven penny stocks to keep an eye on within Robinhood, it’s important not to blindly follow these picks. The key to successful trading is understanding the reasons behind each selection and applying that knowledge to develop your own list of stocks to watch. This approach, along with careful market observation and trading, will serve you well as you navigate the complexities of penny stock trading.

Have you traded penny stocks on Robinhood? Write “I always trade with a plan” in the comments!

Frequently Asked Questions About Robinhood Penny Stocks

Just skimming? Here are the most frequently asked questions…

Can You Buy Stocks Under $1 on Robinhood?

Yes, you can. Robinhood opens the door to stocks under $1, making it accessible for investors looking for a low entry point. From companies in technology to artificial intelligence, the options are vast. But remember, cheap doesn’t always mean value. Research is key.

Do Penny Stocks Go to Zero?

Penny stocks can be volatile. They can spike, and they can plummet. While it’s rare for a stock to go to zero, it’s not unheard of. Analyzing factors like debt, liquidity, and market cap can help you make informed decisions. Investing with purpose and strategy minimizes the risk.

What Is the Smallest Stock on Robinhood?

The smallest stocks are often those with a low market cap and share price. Selection varies, and the answer may change on a daily basis. Tools available on Robinhood’s site and other platforms can help you filter and find these stocks. But remember, small doesn’t mean sure gains.

Why Is Robinhood so cheap?

Robinhood’s mission is to democratize finance for everyone. They offer commission-free trading on stocks, which cuts the costs for the average investor. Deals with banks and financial institutions also allow them to keep deposit and account fees low. It’s not just about being cheap; it’s about making investment accessible.

Does Robinhood Really Give You a Free Stock?

As of now, yes, traders get a free stock when opening a Robinhood account. To me, it seems like another way the broker tries to entice users. But do your research. Check the terms and conditions, as they can change at any time.

Can You Day Trade Penny Stocks on Robinhood?

Day trading on Robinhood is like pulling onto the highway with two flat tires. You can do it, and it’ll work, but it won’t be pretty.

Serious traders tend to use more robust software. Research different brokerages and software to find what might work best for you.

What’s the Catch With Robinhood?

Robinhood has a sleek app, zero commissions, and you can even get a free stock for opening an account. How can that be profitable?

They make money by charging what’s known as ‘payment for order flow.’ Market makers and trading firms pay Robinhood for the ability to take the other side of your trades. They make tiny profits on each transaction, which add up over time. And no, they aren’t the only broker to do that.

How Do I Find the Cheapest Stock on Robinhood?

Finding the cheapest stock on Robinhood requires research. Use the platform’s search and filter features to find stocks that meet your criteria.

Is It Better To Invest with Cash App or Robinhood?

Both platforms have their pros and cons. Your choice should depend on your specific needs and trading goals. In my experience, it’s essential to choose a platform that aligns with your trading style.

Why Use Robinhood To Buy Penny Stocks?

Robinhood is user-friendly and offers commission-free trades, making it a popular choice for new traders. However, it’s crucial to understand the platform’s limitations and ensure it meets your trading needs.

What Do Investors Look For in Robinhood Penny Stocks?

Investors typically look for highs in earnings and equity when choosing Robinhood penny stocks. Depending on the name of the company and its reputation, some might also consider upcoming IPOs as a favorable sign for investing.

How Do Banks Influence Robinhood Penny Stocks?

Banks play a vital role in providing the necessary capital to these small-cap companies. When a bank takes a significant interest in any penny stock, investors often see it as a good sign for investing. Banks may offer products like ETFs to make investing in these stocks more accessible to a broader range of customers.

Are There Any Special Discounts or Deals for Penny Stocks on Robinhood?

Customers on Robinhood can sometimes find special deals or discounts aimed at encouraging savings and investing in certain penny stocks that are on sale. However, it’s crucial to research the earnings and equity before making a decision.

How Are ETFs Related to Robinhood Penny Stocks?

ETFs that specialize in small-cap stocks often include penny stocks available on Robinhood. This offers investors an alternative way to invest in these high-risk, high-reward assets. Banks may also use ETFs to diversify their investment products.

What Role Does the IPO Play in Robinhood Penny Stocks?

An IPO can significantly affect a penny stock’s price, making it a key event for investors to watch. Depending on how successful the IPO is, the stock may experience highs or lows that could be advantageous or detrimental to investing strategies.