If you aren’t serious about your trading, you may ask questions like “what are the top 10 Robinhood penny stocks to watch?”

That sounds harsh. But I’ve seen what’s out there and heard the horror stories. So I think you can do better. You have access to SO much information. You can sign up for my NO-COST weekly watchlist here. And you can follow StocksToTrade on YouTube for free vids on trading education.

Every day I host a no-cost premarket session to help traders prep for the day. (Get more info, check out the archive, and sign up for updates here.)

Since you’re here, let’s talk about trading penny stocks on Robinhood.

Robinhood has taken the industry by storm. It’s made it easier for new traders to enter the trading game. It’s also branded itself as THE “free” trading platform. (Nothing’s ever really free.)

Now it’s getting more attention after the GameStop (NYSE: GME) short squeeze. And I’m getting lots of questions about trading on Robinhood.

Listen, I’ll be honest. Robinhood is not my go-to platform for trading penny stocks. But I’m glad it’s inspiring new people to build a skill that has the potential to change their future. 

So today I’ll dedicate this post to trading penny stocks on Robinhood — with a healthy dose of honesty.

Let’s do this!

Can You Buy Penny Stocks With Robinhood?

The answer’s both yes and no. It depends on which penny stocks you’re after.

If you’re looking for stocks that are under $5 and listed on the Nasdaq or NYSE exchanges, then yes. You can access these stocks on Robinhood.

But it’s not great news if you’re into OTCs or pink sheets like we are in the SteadyTrade Team community. If you like these stocks, you’re out of luck. Robinhood won’t let you trade them on its platform. 

Traders like Jack Kellogg love to focus on OTC stocks and the meaty opportunities they can provide.

That said, I put together a list of penny stocks you can find on Robinhood. 

(Psst … Build a better watchlist every day. Join me for my no-cost premarket sessions to find out what I see in the overall market. Access the full archive here and sign up for daily recaps!)

List of 10 Hot Penny Stocks on Robinhood in May 2021

As of early May, these are ten of the most promising stocks that are front and center in my core watch lists.

I can’t claim any of them are fundamentally good companies … But, all of them have some hype, potential momentum, and interesting price behavior on the charts.

Feel free to add them to your watchlists, but remember to only use this list of stocks to watch as a guide. Be sure to keep scanning the market for additional opportunities. Always do your due diligence before every trade and never risk more than you can afford to lose.

(Find out what stocks I’m watching every week — sign up for my no-cost weekly watchlist. You’ll get my top picks right to your inbox every Sunday.)

Robinhood Penny Stocks to Watch #1: Ideanomics Inc. (NASDAQ: IDEX)

Industry: Software

Ideanomics is an electric vehicle (EV) play that garnered some attention in the past. If the world continues to make attempts at reducing carbon emissions we may see more interest in EV companies. 

On April 30, its subsidiary company had news of a three-year deal with Indonesia for 200,000 e-motorbikes. 

News like that in the right kind of market could revive this former spiker.

Robinhood Penny Stocks to Watch #2: Uxin Limited (NASDAQ: UXIN)

Industry: Interactive Media

Uxin is a Chinese used-car e-commerce company. As economies open back up, more people will start leaving their homes and may opt for travel by car rather than air.

But lockdowns have had a tough financial impact on many around the world. So instead of buying a new car for cross-country road trips, we could see increased demand for lower-priced used cars.

It also recently spiked on some higher volume. This could be a good ticker to keep an eye on.

Robinhood Penny Stocks to Watch #3: U.S. Well Services Inc. (NASDAQ: USWS)

Industry: Oil & Gas

This oil and gas company engages in electric fracking. E-fracking is lower cost than traditional diesel-fueled fracking.

USWS currently has an outstanding patent lawsuit filed against two other companies. News of a favorable resolution could have a bullish effect on the stock.

It’s also good to note that fuel companies may start moving as economies open up.

Robinhood Penny Stocks to Watch #4: Applied Genetic Technologies Corporation (NASDAQ: AGTC)

Industry: Biotech

AGTC recently announced it would present clinical trial data for two of their gene therapies at the ARVO 2021 virtual meeting on May 3 and 6.

Positive data can spike stocks like this. So be sure to check the chart for those dates to get an idea of the action. And always remember that play like this could be a ‘buy the rumor, sell the news’ situation.

Robinhood Penny Stocks to Watch #5: Mind Medicine (MindMed) Inc. (NASDAQ: MNMD)

Industry: Biotech

MindMed uses psychoactive drugs in new therapy treatments.

In early November 2020, Oregon became the first U.S. state to decriminalize possession of hard drugs. If the trend continues, what we once considered dangerous substances could get a second chance in the world of medicine.

This stock also recently started moving again on big volume. Could be watchlist-worthy…

Robinhood Penny Stocks to Watch #6: Ashford Hospitality Trust (NYSE: AHT)

Industry: REITs

Real estate investment companies — especially an upscale hotel business like AHT — must have taken a big hit from lockdowns. As the world reopens, we’ll likely see more traveling. That can mean an increased demand for hotels and great news for stocks like AHT.

Robinhood Penny Stocks to Watch #7: TherapeuticsMD Inc. (NASDAQ: TXMD)

Industry: Biotech

TXMD is developing advanced hormone therapies for women. Any news with enough volume could spike this stock.

Robinhood Penny Stocks to Watch #8: Citius Pharmaceuticals Inc. (NASDAQ: CTXR)

Industry: Biotech

This biotech developed a product to treat catheter-related bloodstream infections. On April 29 it announced that the trial-related webinar was well attended by the clinical community.

If CTXR continues to gain exposure, any news could be a catalyst for bullish price action.

Robinhood Penny Stocks to Watch #9: Soligenix Inc. (NASDAQ: SNGX)

Industry: Biotech

Soligenix is hard at work developing products to treat viral diseases like COVID-19. A few vaccines have been approved for the public, but we’re not out of the pandemic yet.

Any new product news could excite traders and investors. That’s a good reason to watch stocks like this.

Robinhood Penny Stocks to Watch #10: Capricor Therapeutics Inc. (NASDAQ: CAPR)

Industry: Biotech

Another biotech focused on developing treatments for diseases such as COVID-19. I’d watch for a news catalyst and volume to spike this stock.

Types of Penny Stocks on Robinhood

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

While these two stock exchanges list a huge number of penny stocks, they’re not the only places that traders can find penny stocks.

The OTC markets and pink sheets also offer a huge range of penny stocks … But you’ll need to open an account with a different brokerage to access them. Check out this post for the lowdown on how to find the best brokerage for you.

How to Find Penny Stocks on Robinhood 

You can find penny stocks on Robinhood’s mobile app… 

But I recommend creating your watchlists from your laptop — it’s a lot easier.

Don’t worry … After you create your watchlists, you’ll be able to access the same lists through the mobile app if you prefer to trade from your phone.

Serious about trading low-priced stocks? Focus on your education. Since 2020, the market volatility has been insane. Tim Sykes and I made a “Volatility Survival Guide” to help you learn how to trade through the madness.

Plus, you can learn key tips for using the StocksToTrade platform. Like how to find the best trading opportunities with low-priced stocks…

How to Choose Penny Stocks on Robinhood

Choosing penny stocks to trade requires a number of well-planned steps, no matter which broker you use.

Trading penny stocks is all about finding those hyped-up stocks, riding the momentum, and jumping 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, it’s important to start with stock that has hype. Maybe it has a news catalyst that day, is trending on social media, or is just the current market darling.

Next, make sure that the daily trading volume in the stock is high enough to allow you to move in and out of the stock easily, without your orders pushing the price up or down too much. 

It’s also important to check the price action on the stock chart. Reading the chart can help you to pick the perfect entry position, where to place your stop-loss and what the likely next move of the stock is. 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 certain 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 my most powerful stock trading tools on the planet.

How to Trade Penny Stocks on Robinhood

If you’re gonna trade penny stocks on Robinhood, you better know the restrictions. 

Pattern Day Trading Rule

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

This 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.

This rule can be very inconvenient — especially for new and excited traders — but it’s actually meant to protect traders.

Robinhood Day Trading Limit

Some people don’t know this, but there are limits on how much you can spend day trading on Robinhood.

This amount will vary according to your account size and the types of stocks you trade. The limit will generally be higher if you have more cash and if you hold low-volatility stocks.

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 using margin. Margin is automatic on some Robinhood accounts. That can be risky. Read more about it 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 more 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 get into the best trading chat room. Read more about this killer feature here. 

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 Stock 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 watch lists, such as one for a certain sector and others for specific chart setups.

StocksToTrade makes it easy to keep multiple and advanced watchlists to help traders zero in on the hottest trading opportunities. But we want you to see it for yourself. Check out how our platform can help you every trading day — a 14-day trial is just $7!

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 these days. Robinhood’s app can make signing up and account funding 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 introduced 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.

No Phone Support: Another con for Robinhood is customer service. I haven’t tried Robinhood personally, but I know a lot of people who have. I hear a lot of reports that it’s difficult to get in touch with a human being. Apparently, all communication is done via email. If you’re trading with real money, you want to know your broker will be there for you if you need help.

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 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 the reality is that the habits of most successful traders aren’t quite as exciting as in the movies.

As smart traders, the first thing we think about before we even consider trading a stock is how to manage our risk.

Managing risk means that we don’t lose more money than our trading plan allows. We’re able to exit our positions without spooking the market. And when we have a bad day in the market, we’ve done our best to protect our accounts and live to fight another day.

One way to manage risk is to set stop-loss levels. This is where you can place an order with your broker to close your position if you lose a certain amount of money. Or, if you’re very disciplined, you set a mental stop and manually close positions that hit your loss limit.

Stop-loss orders can be placed quite easily in the Robinhood app, and they can be good as long as there is enough trading volume in your stock. If you’d prefer to manually place the trade, then it’s a good idea to set a price alert within the app, to tell you when the stock price hits your stop-loss point.

Can You Get Rich Trading Penny Stocks?

That’s a loaded question! It is possible — I don’t think anyone would do it if it wasn’t.

But it’s not easy. Trading low-priced and penny stocks is just like any other skill. You gotta work your butt off for it, and not everyone will be successful.

I can tell you this, though … I’ve been around enough successful traders in my career to see what they have in common. They all commit. These traders put in the time and hard work it takes to get good at anything that’s worthwhile. And they fail just like everyone else, but they don’t quit — they learn from their mistakes and keep going.

Frequently Asked Questions About Penny Stocks on Robinhood

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?

Yep, and many people are currently doing just that. Is it the smartest way to day trade stocks? In my opinion, absolutely not… Day trading involves analyzing a huge amount of information every single trading day... News stories, thousands of stocks ticking up and down, opportunities everywhere — it can be hard to stay on top of everything and make good trading decisions for your strategy. That’s why I do my trading and analysis when I’m sitting in front of a computer screen (not just on my phone). And it’s why I use the StocksToTrade trading and analysis platform to help me easily find the best trading opportunities that fit my criteria.

What’s the Catch With Robinhood?

With Robinhood, you get a sleek little trading app, the ability to easily trade thousands of shares for zero commissions, and you can even get a free stock for opening an account… It’s natural to ask ‘what’s the catch? How does Robinhood make any money?’ While Robinhood doesn’t charge commissions for their clients to trade, they still make money from those clients by what’s known as ‘payment for order flow.’ This is where market makers and trading firms pay Robinhood for the ability to take the other side of these trades. In turn, these trading firms and market makers route the orders and look to make tiny profits on each transaction, which add up over time.

Robinhood Penny Stocks to Watch: Conclusion

There you have it — my top 10 Robinhood penny stocks to watch in May 2021.

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.

To learn more about penny stock trading, check this post out.

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.

Last year, we added our brand-new Breaking News chat feature — 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.

Also, if you’re looking for mentorship, a trading education, and a trading community, come join SteadyTrade Team. We connect live twice every trading day to watch the market and make solid trade plans. Join us! 

Have you used Robinhood to trade penny stocks? I’d love to hear about your experience. Leave a comment below!