How to Use Robinhood Without Losing Your Shirt – Lifehacker

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As WSJ columnist James Mackintosh recently pointed out: the stocks that did best last year were priced below $1, which is odd, because a stocks price tells you almost nothing about the company. This market behavior coincides with the recent rise of individual investors using trading apps, with users flocking to Robinhood because of its ease-of-usebut is the app too easy to use? Do hobbyist traders even know what theyre doing?

The benefits of democratized trading shouldnt be dismissed out of hand, but it exists in tension with the fact that some people should simply stay well clear of trading apps. Per a recent New York Times feature, studieshaveshown that the more small investors trade stocks, the worse their returns are likely to be.

Robinhood, like other retail trading apps, lets individuals buy and sell stock, as well as other, more complicated trades. The knock against Robinhood is that, compared to other apps, its a hotbed of aggressive trading made worse by how the app gamifies the user experience. Per the Times :

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The golden rule of trading is to never invest what you cant afford to lose. Unless youre an experienced trader who knows how to evaluate a company based on its balance sheet, cash flow, market share, or management, youre probably better off thinking of trading as gambling, and applying the same precautions. Here are some tips on staying responsible with your money. Otherwise, if youre interested in trading, Nerdwallet has a good overview of best practices for day trading that can help you from getting fleeced in the long run.

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How to Use Robinhood Without Losing Your Shirt - Lifehacker