Robinhood is one of the popular discounted brokerage and commission-free crypto trading platforms. It is popular among the customers who want to trade in exchange-traded funds (ETFs), personal stocks (including US depository shares), cryptocurrencies, and options.
Since the introduction of Robinhood, they have set their goal to provide traders with a free and easy-to-use outlet to trade in crypto and other markets. As you know very well about the simple and flexible interface of Robinhood. Even beginners can also start investing with this app.
As the market of cryptocurrencies is growing, people have also a growing interest in crypto trading. No one wants to give up profits from cryptocurrency these days. Investing in crypto is volatile and day trading in crypto can be proved to be a most successful strategy.
“So if you have this question in your mind that can I day trade crypto on Robinhood or alternatives to Robinhood, then you will get the answer to this in this blog.”
You can also trade Robinhood stock for the company that went public with a valuation of $1.2 billion.
Let’s dive right in and understand everything in detail.
Yes, you can day trade crypto on Robinhood.
In day trading you need to buy or sell securities on a trading day. Yes, it is possible in any market whether it is a stock market or forex market. Every trader is properly funded and educated and knows how to go with the market strategies.
Most of the time, day traders use short-term trading strategies by leveraging large amounts to invest in every price move that occurs in high liquid currencies or stocks. Day traders know the times and events when it causes short-term movements in the market. Some techniques are used by the trader like schedule advertising based on business and corporate earnings, financial data, and other news to trade successfully.
Some other popular strategies that you can use for successful day trading are highlighted below
- Scalping – This strategy can help you to make a smooch profit as possible on small price changes during the trading day.
- Range Trading – When you make buying and selling decisions based on support and resistance then it is called Range trading.
- High-Frequency Trading – To exploit the short-term market inefficiencies traders use powerful algorithms that lead to a powerful forecast and more profit earning.
You can trade cryptocurrencies with Robinhood. You can have access to crypto-related news, scheduled advertising, and other insights. Besides this, you can even create a personalized day business strategy.
When it comes to day trading cryptocurrency on Robinhood no question arises for should or shouldn’t. Because whenever you opt for day trade of any security you must be ready for surprises. Every coin has two sides, Just like that trading also consists of advantages or disadvantages. So before you start day trading crypto you need to know a few things in mind.
Cryptocurrencies are highly volatile and can turn the crypto market into a roller coaster at any time. But when it comes to day trading, it is considered an ideal environment because lots of trading activities happen during the daytime. With many up and down moves during the daytime, you have the chance of making good profits.
Day trade in crypto is not recommended due to its volatile nature. It is a risky environment and takes a lot of time and effort, and is not at all recommended for beginners. In addition, some jurisdictions tax the capital gains of each business so that it costs money and, therefore, becomes a substantial amount of tax debt at the end of the year.
Let’s say you choose to trade Bitcoin on Robinhood and you opt for the strategy that closes your position after receiving more than 10% of the purchase price. When Bitcoin reaches this limit and you adhere to the selling strategy, the price is likely to rise, and therefore, you will lose more profits due to day trading.
Always keep in mind to adhere to the strategy you opt for day trade in crypto even when you lose the potential profits. Once you think you are ready to trade in cryptocurrencies in Robinhood, you should only trade that time. Even Robinhood offers a commission-free trading option together with a lot of interesting features that can enhance your buying and selling decisions while trading.
Day trading crypto on Robinhood is very simple and unlike trading stocks, you do not need to earn up to $ 25,000 before making trades 5 or more days a week. Therefore, you can trade crypto as many times as you want. And you must be aware of the fact that the crypto market never closed so you can trade any day of the week.
Keep in mind that when you trade in crypto on Robinhood, the coin you choose for trading is not your own. You are just betting on the prices of cryptocurrencies. When you trade, the value of your investment increases as you buy it outright.
If you want complete control over the crypto coin, you need to go through a complicated process. First of all, you need to convert the Fiat directly in Robinhood and withdraw the Fiat directly from the platform. But be aware, because it contains the risk of changes in waiting periods, fees, and value of the coin.
No, day trading rules do not apply to cryptocurrencies. This means you need not maintain up to $25,000 in your account before trading four times a day on Robinhood. As the rules made by FINRA (Financial Industry Regulatory Authority) never apply while trading in cryptocurrencies.
And you all know that the crypto market has no closing days. So you are allowed to day trade in crypto as many times as you want and on any given day. But when you trade in cryptocurrencies, always remember that cryptocurrencies have high volatility and high volatility gives rise to high-risk factors.
In addition to day trading crypto, you will be recognized as a pattern day trader when you trade 4 times or more on Robinhood and other securities such as options and stocks.
As per Robinhood, FINRA has enforced the day trading rule to save novice traders. So that platform control should be enforced and the defaulters should be flagged
In addition to any cryptocurrency positions, if you have less than $ 25,000 in portfolio value, you will not be limited to 3-day trades per week in a 5 trading days duration.
Always remember that in a 5 trading days week you decide to place a 3-day trade and add one more day and make it a 4-day trade then in that case you will automatically become a Pattern Day Trader.
To keep up with the trading you must have a portfolio value of at least $25,000.
You need to understand that only the balance of the previous trading day is taken into consideration. So, if you have a portfolio worth $25,000 on a trading day, it will not be counted unless it remains intact by the end of the day.
Once you are identified as a pattern day trader, your account will be limited to 90 days or 3 months.
And if you decide to continue day trading even after maintaining portfolio value to less than $25,000, your account will be further limited. And you will be restricted to even buy stocks, options, and cryptocurrencies on the Robinhood platform. But Robinhood gives you the facility of a day trading counter so that you can track your day’s trading activity.
- Unlike the forex or stock market, the trader can trade in Cryptocurrencies from anywhere and at any time. The Crypto market has been operating 24*7.
- It is best for those beginners who want to start their trading journey with cryptocurrencies. For this they don’t need a large amount, just $100 is enough to start.
- Unlike other markets, cryptocurrencies take a little longer to run in the market. So traders get more time to analyze and can make better decisions.
- Unlike the forex market, in the crypto market, you can trade almost all pairs easily, where some foreign pairs are not liquid.
- The crypto market is prone to criminal activity. It can be hacked and consumer capital and details can be stolen without a trace.
- It is very volatile In some cases, prices can fluctuate sharply within minutes, causing huge losses.
That’s all about day trade in Cryptocurrencies on Robinhood. Hope you like this article and get the information you are searching for.