How can traders find Robinhood penny stocks to watch this year?
I get that question a lot. Robinhood has taken over the newbie day trading community. It offers commission-free trading and gives a ‘free’ stock to anyone opening an account. But how does it stack up for day trading penny stocks?
So many newbie day traders choose a broker without doing any research. I think they pick the one that seems most convenient. You want to make sure you use the best broker for your trading style.
So in this post, I’ll get into all of it. I’ll cover the ins and outs of Robinhood penny stock trading. And have a few Robinhood penny stocks to watch in 2021 if it’s still your broker of choice…
But know that adding a stock screener to the mix is critical for finding stocks. I use StocksToTrade to scan for stocks every day. It has 40+ built-in scanners, killer charts, and SO much more. I helped design it to fit my trading strategies.
Table of Contents
- 1 Can You Day Trade Penny Stocks on Robinhood?
- 2 List of 5 Robinhood Penny Stocks to Watch
- 3 Can I Find OTC Penny Stocks on Robinhood?
- 4 Is Robinhood Good for Penny Stocks?
- 5 Frequently Asked Questions About Robinhood Penny Stocks to Watch
- 6 Robinhood Penny Stocks to Watch: The Bottom Line
Can You Day Trade Penny Stocks on Robinhood?
The short answer is yes. But when you look closer, you’ll see there are lots of penny stocks you can’t trade on Robinhood.
Penny stocks are stocks that trade for under $5 per share. There are tons of them out there. Even after 20 years of trading, I’ve only seen a fraction.
Robinhood allows you to day trade penny stocks — as long as they’re listed on a major stock exchange, like the New York Stock Exchange or the Nasdaq. But as soon as you try to day trade stocks in the OTC markets, you’ll get stopped in your tracks. More on that in a bit…
First, let’s go over some Robinhood penny stocks you can watch.
List of 5 Robinhood Penny Stocks to Watch
Before I get to the list of Robinhood penny stocks to watch, I must remind you that these aren’t recommendations. These are potential trading ideas to help you learn the patterns and process. I want you to think for yourself, not follow my trades.
Want to be a smart trader? You have to put in the time to learn the patterns.
Do your due diligence to find stocks with the potential to be good trades for your setups.
Robinhood Penny Stocks to Watch Under $5
Let’s start with stocks priced between $1 and $5. These are the penny stocks you’ll most likely be trading on Robinhood … A stock that trades below $1 for too long gets delisted.
Robinhood Penny Stocks to Watch #1: SeaChange International (NASDAQ: SEAC)
SEAC is a video software company that helps satellite, media, and telecom companies tailor services to subscribers.
Take a look at the six-month chart…
Over the past few months, this stock’s had a lot of sideways action. But near the end of March, it broke out on a high-volume move. If it breaks the previous high of $2.15, it could run again.
Robinhood Penny Stocks to Watch #2: Comstock Mining Inc. (AMEX: LODE)
LODE mines silver and gold. The Nevada-based company also owns real estate including land, rental properties, and a hotel.
Check out the three-month chart for LODE…
Look at the two big volume candles that came in February. On both high-volume days, the stock gapped up big. If there’s another high-volume day like that, this stock could run again.
Former runners tend to run again … It’s never a bad idea to watch stocks that have run in the past.
Robinhood Penny Stocks to Watch #3: Avinger Inc. (NASDAQ: AVGR)
AVGR designs, manufactures, and sells catheter-based systems for peripheral arterial disease. Medical device companies like this can move big when they release good news.
Here’s the six-month chart…
AVGR jumped big right before the new year, and it’s held up nicely. If there’s another catalyst, this stock has the potential to gap up quickly. I wouldn’t trade without a solid catalyst and increased volume. That would just be gambling.
Robinhood Penny Stocks to Watch Under $1
You find the most penny stocks under $1 per share listed on the OTC markets. But it’s not unusual to find a few fighting to stay on a major exchange.
These can be good stocks to watch. These companies will do just about anything to push their stock prices higher to avoid delisting…
Robinhood Penny Stocks to Watch #4: Northern Dynasty Minerals Ltd. (AMEX: NAK)
Alaska-based NAK is working on the Pebble Project, a large copper-gold-molybdenum prospect.
This stock’s popularity makes it a good stock to watch. Over the past three months, there have been six days with over 100 million shares traded. That’s a lot of volume.
In penny stocks, high-volume stocks are where you find the biggest moves.
Check out the three-month chart…
Robinhood Penny Stocks to Watch #5: Castor Maritime Inc. (NASDAQ: CTRM)
CTRM is a global shipping company focused on transporting commodities. The company’s been buying new vessels to add to its fleet.
Take a look at the six-month chart…
The stock spiked back in February and has been fading ever since. Watch for the company to take steps to push the price back up.
Can I Find OTC Penny Stocks on Robinhood?
Robinhood doesn’t have access to the majority of OTC penny stocks. So if you want to trade these stocks, that’s definitely something to consider before you hop on the Robinhood train.
I love trading sketchy OTCs. They’re part of how I’ve made over $7 million in trading profits.* But I go in with a plan and years of experience. It’s what I teach all my students. And it’s why I can’t fathom not having access to them as a day trader.
Take Jack Kellogg, for example. He started in my Trading Challenge in 2017. In the past year, he’s been crushing it. Jack broke the $1 million mark in November 2020 and is now over $6.4 million!* A lot of those profits came from trading OTCs.
He’s an exception — most traders lose — but Jack’s story shows you something about the opportunity in the OTC markets. If you use Robinhood, you’re eliminating OTC opportunities…
Is Robinhood Good for Penny Stocks?
In my opinion, Robinhood isn’t the best broker for penny stocks. Their commission-free trading and free stocks appeal to new traders — but there are some caveats.
If a brokerage doesn’t charge commissions, it has to be getting money somewhere else.
And even though you’re not paying a commission fee, you might lose money from poor executions.
Robinhood isn’t lying about giving away a free stock to new users, but it’s not like they’re handing you a share of Amazon. There’s a good chance you’ll get a stock priced between $2.50 and $10.
And there’s a $75 account transfer fee if you want to move a securities account to another firm. So you can lose money there, too.
Make sure you’re aware of all the potential fees with Robinhood … The same goes for any brokerage. You have to do your research and find the brokerage that works best for you.
Maybe you insist Robinhood is right for you. Let’s go over some potential good points…
Pros
Newbies love Robinhood’s commission-free trading, user-friendly app, and the ability to buy fractional shares.
Commission-free trading can be great for beginners with small accounts. If your average gain is only $20 and you have to pay $7 in commissions, you might have a harder time growing your account. I actually see commission fees as something that can make you more selective about trades.
Anyway … Many traders say they love the Robinhood app because it’s easy to navigate. But to others, it seems like Robinhood has gamified trading. Either way, it’s brought millions of people to the stock market. Customers also get benefits for referrals, which keeps the Robinhood community growing.
They’ve even introduced fractional shares for traders who don’t have enough cash to buy a full share. For example, you could pay $500 for a piece of an Amazon share.
Cons
I’ve already mentioned some reasons I wouldn’t trade Robinhood … Let’s go over them in more detail.
Most of the penny stocks I trade are volatile. If you don’t have quick executions, you might miss the meat of the move and even end up losing your hard-earned cash. I’ve heard horror stories about bad executions, and I don’t want you to experience that.
(If you want to learn how to take advantage of volatile markets, get a copy of my no-cost “Volatility Survival Guide” here.)
On top of that, you can’t trade OTC stocks on Robinhood … To me, that’s the biggest downside there is.
The top traders from my Challenge and I learned how to profit from OTC runners.* We approach them with thorough plans and risk management. I think OTCs are great because they tend to trade less choppy than listed stocks. I’ve watched the same patterns play out for over 20 years.
Here’s why I love the OTC and penny stock niche … I’m not the smartest guy in the world, but I found a niche where my hard work pays off for me.*
In penny stock land, it mostly comes down to you vs you. How well do you manage your emotions? How much time have you spent studying the patterns? Will you cut losses quickly and follow the other rules?
If you think you’ve got the dedication, apply for my Trading Challenge. I can teach you the fundamental habits that have helped so many traders. The Challenge can help you win the you-versus-you battle.
Frequently Asked Questions About Robinhood Penny Stocks to Watch
Is Robinhood Good for Penny Stock Trading?
In my opinion, it’s not the best. OTC stocks make up a huge part of the penny stock market, and Robinhood doesn’t have access for trading them. In my experience, the execution speed complained about online can also be costly for traders.
Can I Get Rich Trading Penny Stocks?
Yes! I’m living proof.* There’s so much opportunity in penny stocks. But it takes time and hard work to learn your process and strategies. Focus on your education first. If you expect to make millions right away, you’ll be disappointed.
Can You Day Trade Penny Stocks on Robinhood?
The short answer is yes. Any penny stocks that list on major exchanges are tradeable on Robinhood. But you can’t trade OTC stocks, so if you go with Robinhood, you'll miss out on a lot of penny stock opportunities.
Does Robinhood Really Give You Free Stock?
Robinhood gives you one free share of stock when you open an account. The catch? The stock you get will most likely be worth less than $10.
Robinhood Penny Stocks to Watch: The Bottom Line
A ton of new day traders jumped on the Robinhood train this past year. Sadly, they did so before doing any research on what Robinhood offers as a brokerage.
Yeah, there’s commission-free trading and a free share of stock, but there’s also purported slower execution and no access to the OTC markets. I’ve made most of my money in the OTC markets, so missing out on that seems to me like a huge disadvantage.*
Robinhood gives its customers access to penny stocks listed on major exchanges. Those are the Robinhood penny stocks to watch. Using a stock scanner like StocksToTrade can make it much easier to find the hottest stocks.
Make sure the broker you choose fits your trading style. Don’t just pick the first one that seems convenient … Pick a broker that suits you best.
How do you feel about Robinhood? Which do you think are the top Robinhood penny stocks to watch? Let me know in the comments!
Disclaimers
I’m a proud investor in StocksToTrade and I helped design it for the penny stocks I love to trade — including OTCs.
*Please note that these kinds of trading results are not typical and do not reflect the experience of the majority of individuals using our products. From January 1, 2020, to December 31, 2020, typical users of the products and services offered by this website reported earning, on average, an estimated $49.91 in profit. This figure is taken from tracking user accounts on Profit.ly, a trading community platform. It takes years of dedication, hard work, and discipline to learn how to trade. Individual results will vary. Trading is inherently risky. Before making any trades, remember to do your due diligence and never risk more than you can afford to lose. I’ve also hired Jack Kellogg to assist in my education business.
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