Penny stocks trade at $5 per share or less. You can trade penny stocks on Robinhood as long as they are listed on a major exchange like the NYSE or Nasdaq. The fact that Robinhood traders can’t access most of the OTC markets, which is where most penny stocks trade, only adds to the volume they pour into listed penny stocks.
There’s nothing special about using Robinhood as your broker. What is different about Robinhood is how its traders behave …
In 2020, Robinhood traders bought and sold options contracts at 88 times the rate of traders who use Charles Schwab, a more traditional broker. They traded 40 times the per-dollar amount of stocks as Schwab traders.
But somewhere in there, these trigger-happy traders figured out how to organize.
These 3 dudes smarter than any short seller I've ever met.$GME https://t.co/3676VHjFEk
— Timothy C. Bohen 🇺🇸 (@tbohen) January 29, 2021
They learned that they could work together and beat Wall Street at its own rigged game. Their tools are memes, hot sector mania, and the short squeeze.
While I don’t want my students to act like Robinhood traders, there’s plenty of value in knowing what they’re watching.
Right now, these stocks are at the top of the list …
List of the Hottest Penny Stocks on Robinhood in September 2023
My top 7 Robinhood penny stocks to watch for September 2023 are:
- NASDAQ: TSHA — Taysha Gene Therapies, Inc. — The Biotech Stock at 52-Week Highs
- NASDAQ: AXLA — Axcella Health Inc. — The Dip-and-Rip Biotech Stock
- NASDAQ: PALI — Palisade Bio Inc — The Biotech Stock That Kicked Off “The Year of the Biotechs”
- NASDAQ: GDC — GD Culture Group — The TikTok E-Commerce Livestreaming Stock with an AI Subsidiary
- NASDAQ: AREB — American Rebel Holdings Inc — The Not-Too-Safe Safe Stock That Isn’t Giving Customer Combos to the FBI
- NASDAQ: NBSE — Neubase Therapeutics Inc — Another “Smart Money” Biotech Stock
- NASDAQ: MULN — Mullen Automotive Inc — My Troll Meme Stock Pick for the Bagholders Out There
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.
Best Robinhood Penny Stocks for September 2023
These are the top 7 Robinhood penny stocks to watch in September 2023 …
They have a chance to catch fire …
Watch them — and don’t get burned!
Taysha Gene Therapies, Inc. (NASDAQ: TSHA) — The Biotech Stock at 52-Week Highs
My first Robinhood stock pick is Taysha Gene Therapies, Inc. (NASDAQ: TSHA).
We’re starting this list off strong with a multi-week runner.
This tiny biotech spiked on August 14 after it announced the company secured $150 million in private placement.
Fun fact: Private placement means a private investor bought shares of the company.
For a blue-chip stock, that news might not affect the price by much. But at the time, TSHA’s market cap was less than $140 million.
In essence, TSHA secured more money than it was worth …
That catalyst shows there’s value added. That’s why the price spiked more than 230% after the news went public.
After the spike, it pulled back and started to consolidate.
There was a failed breakout on August 24, and I thought it would fade back down. These spikes don’t last forever.
But in early September, the stock was still trading near 52-week highs. And if prices break through that level: $4, we could witness a parabolic move.
Here’s the main reason TSHA is still spiking: shorts are stuck.
Everyone knows this is a crappy biotech stock. The failed breakout lured in greedy short sellers, and now it’s squeezing higher.
Watch the video below for a guide to trading short squeezes …
They can be sketchy catalysts.
But if we understand why the stock is spiking, we can trade the price action while mitigating risk.
I understand there’s an ongoing investigation by Bronstein, Gewirtz & Grossman, LLC into the most recent price action … We’ve seen investigations cause stocks to squeeze higher too …
Axcella Health Inc. (NASDAQ: AXLA) — The Dip-and-Rip Biotech Stock
My second Robinhood stock pick is Axcella Health Inc. (NASDAQ: AXLA).
There are some renewed COVID fears right now.
- People are going back to school
- Colder weather brings seasonal illness
- The COVID pandemic is still fresh in everyone’s mind
- There’s news of new strains
I don’t think there’s anything to fear. It’s unlikely we lock down again. But the hype shows up in the market.
And that’s our signal to trade.
On August 29, AXLA was granted a patent by the U.S. Patent and Trademark Office (USPTO) for its Long COVID fatigue treatment.
For a low-priced biotech … a U.S. patent related to a famous subject like COVID has spike potential.
That morning it launched over 350% and gave traders a perfect dip and rip opportunity. There’s a video with the pattern below …
The price promptly sank back down. Once again, I thought I would witness another spiker fade into the depths below.
But starting September 1 it showed signs of renewed life.
That makes it a perfect candidate for a short squeeze.
Stay on top of this play!
It could explode upward at any time.
To prepare, tune in for one of my daily live-market webinars …
You DON’T want to miss this potential spike.
Palisade Bio Inc (NASDAQ: PALI) — The Biotech Stock That Kicked Off “The Year of the Biotechs”
My third Robinhood stock pick is Palisade Bio Inc (NASDAQ: PALI).
The float is only 6.7 million shares.
That’s well under our goal of 10 million shares or fewer. The low share supply helps prices spike higher when demand increases.
And it helps that it has a history of running. Past runners can run again.
On the two final trading days of 2022, PALI ripped more than 370% higher.
That momentum was helped by two hot press releases …
- November 22: Fast track designation from the FDA
- December 29: $2.5 million private placement
It kicked off the hot biotech sector in 2023.
And now it’s back …
On September 6, the company announced a new licensing agreement with Giiant Pharma Inc. to develop and produce Giiant’s products.
Any business partnership is a decent catalyst for stocks to spike. The agreement shows value-added and future business potential.
Of course, on September 7 the stock held a public offering that helped tank the share price. That shouldn’t be a surprise to anyone who’s looked at this stock’s chart — look at all those short-lived spikes!
The float is still low, but we need another press release to bring the momentum back.
I’m not worried, the biotech sector is especially hot right now. PALI isn’t the only biotech that’s running …
- Novo Integrated Sciences Inc. (NASDAQ: NVOS)
- NanoVibronix Inc. (NASDAQ: NAOV)
- There are more included on this watchlist
Pay attention to the pattern of hot sectors.
We’ve seen AI spikers, IPO spikers, and even some EV sector revival this year.
But right now, bar none, biotechs are the hottest runners.
Watch for more low-float biotechs with news.
GD Culture Group (NASDAQ: GDC) — The TikTok E-Commerce Livestreaming Stock with an AI Subsidiary
My fourth Robinhood stock pick is GD Culture Group (NASDAQ: GDC).
On August 28 it announced an e-commerce partnership with TikTok.
In premarket, the price launched over 100%.
After the spike, it fell almost all the way down.
But the company announced more TikTok partnership news on September 5 and look at that … the price bounced back up.
The company is showing us it knows how to play the game. We need press releases and hype to spike the price higher. A follow-up TikTok announcement bodes well.
Plus it has …
- A low float: 2.3 million shares
- AI sector ties: AI subsidiary
- A huge history of spiking: 1,600% on May 1
The biotech sector is red hot … but AI is close on its heels.
Keep an eye on this spiker as it consolidates and moves toward key resistance.
If there’s a trade to make, you’ll be ready.
American Rebel Holdings Inc (NASDAQ: AREB) — The Not-Too-Safe Safe Stock That Isn’t Giving Customer Combos to the FBI
My fifth Robinhood stock pick is American Rebel Holdings Inc (NASDAQ: AREB).
On September 6 we learned that Liberty Safe, while claiming to sell America’s #1 gun safes, provided the FBI with the codes to a gun safe belonging to a January 6 rioter.
I’m not here to discuss politics.
But the hype behind certain politically charged events CAN lead to substantial profits. I’m just following the trend.
There’s a significant amount of backlash from consumers. And in true penny stocks fashion, AREB was quick to build on that hype.
On September 6, during after hours, the company announced its subsidiary was bombarded with calls to replace Liberty Safe products with ones that won’t give the FBI access.
AREB’s CEO also included a message that his company would seek to preserve personal freedoms.
As a result, the stock launched over 140% before noon the next day.
But the spike likely won’t last forever. Remember, this is all hype.
While it’s volatile we can ride it for a profit. But don’t get married to the stock.
Neubase Therapeutics Inc (NASDAQ: NBSE) — Another “Smart Money” Biotech Stock
My sixth Robinhood stock pick is Neubase Therapeutics Inc (NASDAQ: NBSE).
There’s another company, SymetryX Corporation, that just acquired 20% of the outstanding stock for NBSE.
That news broke on the morning of September 6 and the same day prices spiked over 170%.
It’s always a good strategy to follow the smart money in the market.
For instance … if another investor buys a lot of stake in a company, that momentum could spike prices substantially.
This major investment is the kind of news that has legs. Prices dipped a bit since the highs on September 6. But if NBSE can find decent support there’s a possibility it pushes even higher.
Especially because the float is only 1.5 million shares. The low share supply will help it spike higher.
I create watchlists like this to keep tabs on the best setups. That way, if prices push to the moon tomorrow I’ll be ready.
Mullen Automotive Inc (NASDAQ: MULN) — My Troll Meme Stock Pick for the Bagholders Out There
My seventh Robinhood stock pick is Mullen Automotive Inc (NASDAQ: MULN).
You’ve heard me say it a few times already …
One more time for the people in the back.
These spikes don’t last forever.
To help illustrate my point, I included MULN on this watchlist.
This was a popular EV spiker in 2020 and 2021. The price launched over 1,000% at one point.
People who bought at the top thought it was going to the moon. Maybe they believed in the company. Either way, they didn’t exercise enough caution. Now they’re holding a heavy bag …
On September 7 the company announced its upcoming delisting from the Nasdaq.
That’s the final nail in the coffin for any bag holder.
The EV sector has a lot of decent stocks to trade. And we still see big runners from time to time.
But please, whatever you do, don’t believe the hype.
- Use the patterns I teach
- Plan potential profits AND losses
- Cut losses quickly
- Stay disciplined
There are real opportunities in this market.
Don’t let greed push you into bad trades — or worse, investing in companies that are day trade only like MULN. If you only focus on the best plays you’re already ahead of the pack.
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…
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.
Trading Fees on Robinhood
Robinhood, the trading platform that’s been a game-changer for many beginners, isn’t about going big and losing everything. It’s a place where every investor, regardless of expertise, can get started without being bogged down by trading fees. No wonder it’s a top choice in the United States, Canada, and Australia.
Companies large and small have their shares listed, and Robinhood makes it accessible for everyone. From technology stocks to artificial intelligence companies, the selection is vast. But while investing can yield gains, it’s not all sunshine and rainbows. Losses are a real part of the game, and it’s essential to understand the factors affecting stock price.
In the world of penny stock trading, the cheap stocks that many rush towards can be a double-edged sword. Being aware of the order type and having a clear strategy minimizes the risk. That’s where the game gets exciting.
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!
Important Factors to Consider when Investing in Penny Stocks
When it comes to investing in penny stocks, the allure of rapid gains can be captivating, but it’s not a decision to make lightly. The top penny stocks on the market may promise exponential growth, but they come with risks. This particular section of the market requires a comprehensive understanding and careful consideration of various factors.
Investments in this area are not as straightforward as plugging your funds into a traditional bank account. Deposits in penny stocks require a careful analysis of market trends, particularly in volatile markets like China. Leveraging recommendations from seasoned analysts, understanding the products offered by various companies, and evaluating the long-term life potential of these investments can make the case for or against specific stocks.
The thrill and potential reward of penny stocks can be appealing, but it’s a section of trading that requires meticulous planning, a clear strategy, and a level-headed approach. Remember, investing in penny stocks is not a get-rich-quick scheme but a calculated risk that demands attention, education, and prudent decision-making.
Trading Volume
The trading volume of penny stocks can give you an indication of liquidity and demand. It’s not about jumping on the trending train, but analyzing what’s driving the spikes and understanding market cap. Historical data and track records are your friends here.
Investment in sectors that show consistent volume reflects stability, and not just a fleeting spike. For example, Chinese and Texas markets have shown notable trends. Analysis, research, and expert content can guide your selection.
Pump and Dump Scams
Not every shiny penny is gold. Some companies run deals that look too good to be true. And sometimes, they are. Scams are a real issue in this market, and a cautious approach, understanding the history and target of a company, is necessary.
These pump and dump schemes play on the lack of information. Utilizing experts and available tools like filters on various sites can protect you from falling into these traps. Stay informed, stay sharp.
Price Action
Understanding price action is a matter of studying the movement, including earnings, revenue, and factors affecting share price. It’s more than watching numbers; it’s about knowing what drives them.
Investors from countries all over, like Canada and Australia, leverage price action for insights. The return on investment depends on knowledge and timing. So take the time to understand what makes the stocks move.
Understanding Volatility
Penny stocks are known for their volatility. What might seem like a minor fluctuation in bigger stocks can be a significant shift in penny stocks. Knowing the volatility means understanding the factors like debt, inflation, and liquidity affecting the stocks.
Monitoring these movements is vital for making informed decisions. It’s not a matter of luck but the ability to analyze and adapt. Your bank account will thank you for it.
Market Research
The cheapest stocks are not always the best deals. Market research provides a basis for decision-making, understanding the product, and the companies behind them. From sectors to individual stocks, research provides insights into returns, losses, and overall market trends.
The content available on various platforms offers different perspectives. From expert analysis to real-time information, utilizing research tools is not just smart; it’s essential.
Robinhood Penny Stocks to Watch: Conclusion
As you can see, Robinhood has some pros and cons just like any other broker or platform. It’s up to you to find your strategy, then find a broker and platform that fits your needs.
If you want to try a more advanced platform, check out StocksToTrade. It’s a platform built by traders for traders and it has a TON of tools and resources that will make even the most experienced traders happy.
The Breaking News Chat alert service can be added to its already-powerful offerings — and traders are in LOVE with it. See how two skilled stock market pros can help you find the news with the most potential to move stocks.
Here’s where you can learn more and sign up TODAY.
Have you used Robinhood to trade penny stocks? I’d love to hear about your experience. Leave a comment below!
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.
