How to Find the Best Penny Stocks on Robinhood in Simple Steps

Finding the best penny stocks on Robinhood starts with understanding why these volatile stocks attract traders looking for fast, aggressive price action. Penny stocks move big on news, hype, and volume — and if you know what to look for, you can use that volatility to your advantage. But you need a repeatable process to filter the noise, stay safe, and find real opportunities on a platform like Robinhood.

Check out the best Robinhood penny stocks here!

Read this article because it shows you how to quickly spot and evaluate penny stocks on Robinhood using built-in tools, so you can trade with more confidence and less guesswork.

I’ll answer the following questions:

• What are penny stocks and what makes them unique?
• How do I set up and fund a Robinhood account to trade penny stocks?
• How can I search for penny stocks on Robinhood?
• What is the best way to use Robinhood’s “Stocks” tab to find low-priced stocks?
• Where can I find trending penny stocks on Robinhood?
• How do I screen penny stocks using Robinhood’s features?
• Why should I consider trading penny stocks on Robinhood instead of other platforms?
• What are the risks and legal considerations of trading penny stocks on Robinhood?

Let’s get to the content!

Characteristics of Penny Stocks

Penny stocks are low-priced securities, usually trading under $5 per share, and they tend to have lower trading volume, smaller market caps, and limited fundamentals. These stocks can trade on major exchanges like the Nasdaq or over-the-counter (OTC) markets, but most Robinhood penny stocks are limited to listed exchanges because Robinhood doesn’t support OTC trades. Traders are drawn to penny stocks because they can offer massive price fluctuations and quick percentage gains, often in a matter of minutes or hours.

The nature of penny stocks makes them risky. They often belong to companies with little revenue, weak financials, or businesses that haven’t proven themselves yet. But that’s also where the trading edge comes in — these types of stocks are perfect for momentum strategies, especially when paired with a stock scanner, basic technical indicators like RSI or MACD, and smart risk management. I teach traders to look at the price action and volume first, because those are the clearest signs of momentum and potential entries.

If you’re going to trade penny stocks, don’t think about holding them long-term. These stocks can go from $1 to $5 on news, then crash back down the same day. That’s why I trade them, not invest in them.

Steps to Find Penny Stocks on Robinhood

Finding penny stocks on Robinhood is a process that starts with understanding how these low-priced stocks behave in the broader stock market. They don’t follow traditional fundamentals or long-term growth models — instead, they’re highly reactive to news, price movements, and spikes in volume. That makes them ideal for traders who want to capitalize on short-term setups and quick momentum shifts. The key is learning to spot patterns early, identify clean entry points, and use technical analysis to evaluate whether you’re looking at a potential buy signal, sell signal, or just noise.

Every day, I teach traders to separate hype from opportunity. That means filtering out weak setups and focusing on charts with the kind of volume and price action that can lead to real results. Whether it’s a press release about new products, financial reports, or a surge from social media chatter, the goal is to build a watchlist based on facts, not emotion. Reliable sources of information are important, but so is your ability to process it and react with discipline.

Robinhood makes it easy to access these trades, but your decision-making process has to be guided by risk tolerance and strategy. Don’t base your trades on emotion or someone else’s investment strategy. You need to think in terms of your portfolio, your account, and what kind of risk you can accept. There’s no room for guessing. You’re not investing in value or long-term growth — you’re trading volatile moves. When done right, with a plan and a clear understanding of entry and exit points, these setups can offer solid performance without overexposing your capital.

1. Create and Fund Your Robinhood Account

To find penny stocks on Robinhood, you’ll need a live account. That means downloading the Robinhood app or visiting the website, completing the registration process, and linking a bank account to deposit funds. Once your account is funded, you’ll be ready to start scanning for stocks and watching for trading opportunities.

Make sure you enable Robinhood’s advanced features like candlestick charts, technical indicators, and watchlists. While Robinhood is a beginner-friendly platform, it still gives traders enough tools to follow market trends, watch stock prices, and track price action in real time. Your account is your main tool, so take time to understand how to use it before you risk any capital.

Don’t underestimate this step. Trading starts with preparation. If you skip that, you’re trading blind.

2. Use the Search Function to Find Penny Stocks

Robinhood’s search bar lets you type in tickers or company names, but you can also enter keywords like “penny stocks” to bring up a list of low-priced stocks currently available on the platform. While it’s not as advanced as a full stock screener, it’s a quick way to explore cheap stocks trading under $5. You’ll usually find a mix of biotech, tech, and energy names — all sectors known for volatility.

The search function also shows basic financial data like price, volume, recent news, and price trends. These can help you identify if a stock is moving based on a report, press release, or rumors. In my trading strategy, I always look at what’s behind a spike. Is it earnings? Is it an offering? Is it hype from social media? These questions matter.

Watch for premarket and after-hours price movements. Big gaps can signal a strong trading day ahead — or they can fake you out. That’s why volume confirmation is key.

3. Use Robinhood’s “Stocks” Tab

The “Stocks” tab on Robinhood helps you filter by categories like “Top Movers,” “100 Most Popular,” or “Upcoming Earnings.” While this isn’t a full stock scanner, it’s useful for identifying stocks that are already gaining traction in the market. A penny stock that shows up in the “Top Movers” section is likely seeing a spike in volume or a price breakout.

This tab can help you find momentum setups by identifying the direction of price movements across different industries. For example, if multiple small-cap energy stocks are trending, that might mean there’s a sector-wide catalyst at play. I teach traders to look at these sector-wide shifts to find sympathy plays or lagging setups that haven’t moved yet but might soon follow the leader.

These tools are especially helpful when combined with real-time alerts, chart patterns, and key technical indicators like support, resistance, and RSI to time your entry and exit points more effectively.

4. Check Robinhood’s “Trending Stocks” Section

Robinhood’s “Trending Stocks” section highlights the stocks with the highest user activity. While this can be a mixed bag, it often includes penny stocks that are getting a lot of attention from new traders. This attention usually leads to increased trading volume, which makes these stocks worth watching for short-term trading setups.

You won’t find detailed fundamentals here, but what matters is how much attention the stock is getting. In the world of penny stocks, volume and attention create momentum. A stock with high user engagement and a strong news catalyst can set up clean breakouts. That’s what I teach traders to look for: clear price action, supported by volume and real momentum.

This section is useful for finding crowded trades. That doesn’t always mean they’re good trades — but if you understand the psychology of these moves, you can spot early entries or fade the hype when the volume starts to dry up.

How to Screen Penny Stocks on Robinhood

Robinhood doesn’t have a built-in stock screener like some other platforms, but that doesn’t mean you can’t screen penny stocks. Use outside tools like StocksToTrade, Finviz, or MarketWatch to filter stocks by price, volume, and sector. Once you find interesting tickers, bring them into Robinhood to check charts, news, and other stock-specific information.

If you’re serious about going beyond a basic screener, you need a trading platform that gives you real-time charting, instant alerts, and a steady stream of news — all the tools that help you spot and act on penny stocks fast.

When it comes to trading platforms, StocksToTrade is first on my list. It’s a powerful day and swing trading platform with real-time data, dynamic charting, and a top-tier news scanner. It has the trading indicators, dynamic charts, and stock screening capabilities that traders like me look for in a platform. It also has a selection of add-on alerts services, so you can stay ahead of the curve.

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Focus your screen on key indicators: stocks under $5, with trading volume over 1 million shares per day, and a recent catalyst like earnings, FDA approval, or company news. This helps you narrow your list to stocks that actually have momentum. I always teach traders to keep their watchlists small and focused — five to ten tickers max — so you can react fast without being overwhelmed.

Technical indicators like MACD and RSI can confirm whether a move is getting stronger or fading. Combine those with support and resistance levels to map out your potential entry and exit points before you place a trade.

Why Trade Penny Stocks on Robinhood?

Trading penny stocks on Robinhood gives you direct access to volatile stocks without paying commissions, which is helpful for accounts under $25K. The app is simple, but it supports the fast order execution you need to react to sudden price movements. If you’re focused on short-term trades, Robinhood gives you enough tools to track volume, price action, and basic chart patterns.

I trade penny stocks because they offer outsized returns in short timeframes — sometimes minutes. But I don’t hold these stocks long-term. The same volatility that offers massive upside also brings big risk. Robinhood makes it easy to get in and out quickly, and that’s the whole point when it comes to trading these setups.

You still need a strategy. You still need discipline. And you absolutely need risk management. Don’t mistake simplicity for safety.

Key Takeaways

• Finding penny stocks on Robinhood is possible if you understand the tools available and how to spot momentum.
• Use the search function, “Stocks” tab, and “Trending” section to find stocks moving on volume and news. From there, bring in external stock screeners and use technical indicators to build your trade plans.
• I’ve traded thousands of penny stock setups over the years, and I always tell traders: keep it simple. Focus on clean price action, strong volume, and catalysts that can move the stock. Skip the hype, respect your risk, and don’t overstay in any trade.
• You’re not investing in these companies. You’re trading the chart, the momentum, and the opportunity.

This is a market tailor-made for traders who are prepared. Penny stocks thrive on volatility, but it’s up to you to capitalize. Stick to your plan, manage your risk, and don’t let FOMO drive your decisions.

These opportunities are fast and unpredictable, but with the right strategy, you can make them work for you.

If you want to know what I’m looking for — check out my free webinar here!

Frequently Asked Questions

What are the Risks of Investing in Penny Stocks on Robinhood?

The risks of investing in penny stocks on Robinhood are high because these stocks are extremely volatile and often tied to companies with poor financials or uncertain futures. Price fluctuations can be wild, moving 30% or more in a single session, and these moves aren’t always based on fundamentals. Instead, they’re driven by momentum, speculation, and trader sentiment.

This is why I trade penny stocks but never invest in them. Long-term holding exposes you to too much downside. These companies can issue offerings, reverse split shares, or even get delisted. For traders, that same volatility offers opportunity — but only if you manage your risk and have clear entry and exit points.

Stick to trading strategies built around support and resistance, volume spikes, and key indicators. Don’t treat penny stocks like long-term investments. They rarely end well for investors.

Are Penny Stocks Legal to Trade on Robinhood?

Yes, penny stocks are legal to trade on Robinhood, but only those listed on major exchanges like Nasdaq and NYSE. Robinhood doesn’t support OTC markets, which means many sub-dollar penny stocks won’t be available on the platform. This limits your selection, but it also filters out some of the lowest-quality securities in the market.

The penny stocks you can trade on Robinhood are still volatile and risky, but they’re typically a step above true pink sheet stocks. These are the kinds of stocks I look for when teaching beginners — listed, liquid, and moving on real volume. They’re more predictable, and they offer cleaner setups.

Always check if the stock is tradable on Robinhood before you waste time building a plan around it. Stick to what’s available and focus on stocks with real momentum.

What Tools or Resources Can I Use to Track Penny Stocks on Robinhood?

To track penny stocks on Robinhood, use a combination of the app’s internal features and external tools. Inside Robinhood, set up watchlists, check news updates, and monitor price trends. Outside the platform, I recommend using a dedicated stock screener or scanner like StocksToTrade or Finviz to identify opportunities based on volume, sector, and price action.

Look for tools that include real-time news, customizable alerts, and charts with technical indicators like RSI and MACD. You want to spot early volume, identify support and resistance levels, and confirm your setups before entering trades. I teach traders to build a routine around these tools — scan, plan, execute, review.

It’s not about having the fanciest platform. It’s about using the tools that help you make smart, fast decisions and protect your capital while hunting for profits.

Can Options Be Used to Trade Penny Stocks on Robinhood?

Robinhood does not offer options trading on most penny stocks because these securities usually don’t have the volume or stability needed to support an options market. Options contracts require a certain level of liquidity and consistent pricing, which penny stocks rarely offer due to frequent market fluctuations and unpredictable price action. For that reason, my trading approach stays focused on the common shares where entry points are clearer and risk is easier to manage.

How Do Market Fluctuations Impact Investment Decisions with Penny Stocks?

Penny stocks are especially sensitive to market fluctuations, which can exaggerate moves both up and down based on relatively small changes in sentiment or volume. This extreme volatility makes them a poor fit for traditional investment decisions, where consistency and fundamentals typically matter more. I teach traders to treat these stocks as short-term opportunities, not long-term holdings, and to always approach them with a defined trading strategy in place.