Can You Day Trade Crypto on Robinhood?
Robinhood markets are as regulated as they can. If you want to trade stocks, options, and other securities, you must go through plenty of trading rules that the Robinhood platform needs to comply with.
But what about crypto? As you know, standard and day trading of cryptocurrencies is a pretty normal activity on all crypto exchanges out there. Is this the case in Robinhood Crypto as well?
If you are a day trader with a pre-defined strategy and want to daily trade cryptocurrency on the Robinhood app, then you are probably wondering whether you can or not.
Consequently, in today’s blog post, we will be talking about:
- Can you day trade crypto on Robinhood?;
- How does day trade crypto on Robinhood work?;
- How to perform day trading of crypto on Robinhood.
Can You Day Trade Crypto on Robinhood?
Yes, you can day trade crypto on Robinhood. Day traders will be pleased to know that they can indeed perform day trading market orders on Robinhood.
Although this isn’t an activity advisable to new investors who are about to perform their first trade, performing day trading decisions is possible on Robinhood Crypto.
Besides commission-free trading and other features that can lead you to financial freedom, all the financial products offered by Robinhood are tailored to trader’s necessities without misleading customers.
How Many Times Can You Day Trade Crypto on Robinhood?
There are no limits for crypto day trading on this platform. The crypto markets never close, not even on Robinhood.
The story is pretty different in the stock market and forex market, though.
Traders are generally limited to 4 trades a day, being the trading day limitation applicable to every market order, limit order, or market sell order placed.
Day Trades Limits on Robinhood happen due to regulations of the Financial Industry Regulatory Authority, but pattern day trading rules do not apply to cryptocurrency positions.
What Happens if You Make Too Many Day Trades Using Crypto on Robinhood?
Nothing will happen. You don’t need to have at least $25,000 on your portfolio value, as it happens with stocks and futures.
Cryptos are not regulated by financial institutions, so if you make 3 or 15 day trades of crypto on Robinhood, nothing negative will happen.
Nevertheless, it is worth noting that crypto ownership on Robinhood is still a discussed topic.
In most cryptocurrency exchanges, you are the absolute owner of your crypto, which makes sense.
On the other hand, Robinhood recently announced that they are working on implementing a standardized wallet feature in 2022.
Can You Get Flagged for Day Trading Crypto on Robinhood?
No. You won’t be flagged as a Pattern Day Trader on Robinhood for day trading crypto.
The only way in which you can be flagged as a Pattern Day Trader is by participating in day trade on other markets, but the crypto one is not included.
How to Do Day Cryptocurrency Trading on Robinhood
Now that you know that you can indeed day trade cryptocurrency on Robinhood, it is time to learn how you can do it!
So, get your money ready, and let’s start right away.
Step 1: Sign In to Robinhood Crypto
Firstly, you need to set up your Robinhood Crypto account. Although FINRA regulations do not apply to crypto, you still need to complete Identity Verification processes.
Therefore, you must go through the waiting period of verification if you want to start using all Robinhood features.
They will ask you for your ID, personal details, and other relevant information that the platform needs to comply with different laws.
Step 2: Fund Your Account and Study the Crypto Market
After signing in, you will need to link your bank account to Robinhood, or use a similar payment method.
Once your Robinhood account is funded and ready to go, you can proceed to study the current market price of the assets you want to buy.
Remember that if you don’t have enough funds, your transaction will get automatically canceled.
If, for any reason, you can’t buy crypto on Robinhood, then check our related article to learn how to solve this matter.
Step 3: Perform Your Crypto Day Trading Strategy
Major players in the financial market know how to play their cards.
You need to look at the current price and estimated buy price of the asset you want to buy (Bitcoin Cash, Bitcoin, Litecoin, etc.)
Certain strategies, such as range trading, highly depend on your goals.
Hence, it is utterly important for you to perform your own research before you invest any exact amount of money into day trading on Robinhood.
Pros and Cons of Day Trading Cryptocurrency in Robinhood
Among the pros of crypto day trading on Robinhood, we have the following:
- The crypto market is always open - day trade whenever you want!;
- FINRA regulations won’t mess up with your day trading strategies;
- You don’t need a huge amount of money to start - $100 is more than enough!
On the other hand, if we talk about the cons of day trading on Robinhood, we have:
- Robinhood Crypto has limited asset options. You will only find a bunch of available cryptocurrencies;
- Crypto trading is risky, but day crypto trading is even riskier - think wisely before taking your next step!;
- The competitiveness generated by the always-open crypto market might be harmful to your mental health.
That will be all for now! You are ready to day trade crypto on Robinhood. Check more relevant Robinhood insights here, at GrowFollowing.
FAQ
Does Day Trading Rule Apply to Crypto in Robinhood?
No, it doesn’t - there are no day trading limits for crypto on Robinhood since cryptos are not regulated by the FINRA.
Steve specializes in cryptocurrency and finance. As a born researcher, he won’t leave any stone unturned when it comes to topics he covers.