ROBINHOOD SMALL ACCT CHALLENGE: Trading with a $2,000 Account (DAY 1) transcript

What's up, everyone? All right. Well, today is day one of my brand new challenge of trading in a $2,000 cash account using Robin Hood as my broker. And we've got a lot to cover. I got to update you on where we stand on our fundraising challenge because, as you know, all the profits from these small account challenges that I've been doing are getting donated to charity, primarily to children's hospitals. So, I'm going to update you on that.

I'm going to share with you some of the tweaks that I made in the settings to the Robin Hood platform to optimize it for day trading. I'm going to walk you through the trade that I took today, including the live recording, which has my eye tracker, so you can see exactly where my eyes are moving around the platform. And then I'm going to share with you a wish list of what I think Robin Hood should do to improve the platform because no platform is perfect, and Robin Hood is no exception to that.

And this is a little teaser of the live archive so you can see what's coming. Now, what you could see here with uh the red dots is you can actually see how my eye is moving around the screen to use the platform. Now, when I started this morning, you know, I funded the account with $2,000, but $2,20 is in because Robin Hood currently is doing a 1% match. Now, I'm grateful for that. I'll take the extra 20 bucks. I could definitely use it during this challenge.

And let me remind you as always, I have no affiliate relationship with Robin Hood, Weeble, or any of the other brokers I've done small account challenges with. So everything I share with you is just my honest opinion of what I think about the platform for better or for worse. Okay, so today is a green day. And the way I'm approaching this small account challenge is to do one trade a day. That's exactly how I did it with my Weeble challenge, which I just wrapped up.

Many of you guys tuned in for that. I grew the account by, let's see, it was just under a 100%. It's about 88% uh account growth in 10 trades, which was solid. Uh and I'm hoping to be able to do something similar here with Robin Hood. So, let's start with the fundraising challenge. So, as you guys know, all the profits from the small account challenge are getting donated to charity. And every time you guys hit the thumbs up on episodes in this small account series, I'm adding an extra dollar to the donation total.

So, we are now at over $213,000 of money raised for charity. These are the different charitable organizations I've already donated to. Today, I donated $10,000 to the Texas Children's Hospital. So, $10,000. Boom. So, we have now donated a total of $212,000 through these challenges. We've got another $1,200 uh still to go just based on where we sit here. And hopefully you guys are hitting the thumbs up so we can get that number even higher.

And for my next uh upload, we'll see that we're up around 220,000 or maybe uh even higher than that. So, let's talk for a second about Robin Hood. Um just to introduce Robin Hood for those of you guys who aren't super familiar, they're a familiar name in the financial markets, which is one of the reasons why they are so popular. Their growth has been really exponential, borderline parabolic. If it was a stock, I'd be trading it.

Well, actually, it is a stock, but funny enough, their stock price doesn't exactly correlate with the growth curve that they've seen in the accounts. I don't know exactly why they've got that discrepancy there, but I suppose that's not totally uncommon. We've seen that uh with other stocks over the years. So, if we pull up, let's see, um the ticker for Robin Hood, uh their ticker is Hood uh RH, which would make sense, is taken, of course, by Restoration Hardware.

Everyone needs good furniture and they they got dibs on RH. So, Hood uh as you can see here, uh initially IPOed very strong and it kind of completely sold off. Um but then as is often the case with IPOs, rallying back up, took a few years uh but now peaked at 150 uh and then has pulled back a little bit. So I suppose it's a it's a well it's a fairly similar chart although um just noted by the fact that they didn't have that big dip in growth um you know during this period it was just still continuing to grow.

The thing with Robin Hood is that it is very popular. So many people are familiar with it and I think that's the reason that I've seen at least here on YouTube so many people saying hey Ross I want to see you do a small account challenge using Robin Hood. And generally I say, you know, guys, I've been day trading for a long time and I I don't really think that Robin Hood is known to be the best platform for day trading, but you know, you guys want me to try it and I I'll give it a try.

So Robin Hood Legend is the platform I'm using. Now, of course, you can use the mobile app. Um their mobile app is uh is is reasonably good. Um I mean, you can't really complain about it that much. I'll pull it up on my phone here just so you can see it for a second. Um, so I've got my uh my account here. So you can see this is the account and I've got uh the $2,389 in it right now. And so, you know, you can navigate through this platform and it's pretty cool.

I mean, it's not bad. But if we're going to be honest, day trading on a mobile app, that's not that's a recipe for disaster for, you know, if I'm going to be real, you can't day trade on a mobile app. It's not the way I trade at least. So using their desktop platform, Robin Hood Legend, was um was the natural fit for me. However, um I soon realized that this would not just be a typical small account challenge. It would be the Robin Hood double challenge because there is no traditional level two, which I'm accustomed to.

There's no time in sales window to see order flow. There are no hot keys, and there's no one-click order entry window unless you're doing market orders. So, yikes. All right. Robin Hood Legend would be a good platform for investing, for managing uh long-term positions, for swing trading, but it does not feel like it's been designed for day trading. And I think that's because, in fact, it has not been designed for day trading.

So, what is the value proposition of Robin Hood? I've done these extensive broker comparisons. As you can see right here on this sheet, I've got this Excel doc where I've actually funded accounts with all these different brokers and tested them out, executed trades with real money to see which ones are the fastest, which ones have the best tools, which ones are optimized for day trading. And Robin Hood scored the lowest.

Lit literally, Robin Hood Legend was the lowest of any broker that I reviewed. And I'm not trying to give them a hard time because I think they've got a value proposition. Clearly, they're very popular, but it can't be because of Robin Hood Legend. So, that tells me that they're not really bringing in people for day trading. They're bringing in a lot of people that want to kind of, you know, I don't know, kick the tires on in the market, maybe trade a little bit of um, you know, Tesla, buy a little of this, a little of that.

You could do fractional shares, do a little crypto. They're even getting into now the very popular space of you know what I'm going to say the prediction markets. So the prediction markets and I mean you know this is the thing where uh it's it's like the the new rage. So you can now essentially bet on you know well I shouldn't say bet because it's trade uh but you can trade on uh different outcomes real world events such as sporting events you can trade on who's going to win the Super Bowl.

This right here is Robin Hood's prediction markets. So, is it a gamble? Is it a trade? I don't know. You tell me. But they're saying it's trading because there's no house. You're just trading against other partners. All right. So, in any event, Robin Hood is um they're they're kind of like the jack of all trades in a way. You know, you could do a little of swing trading, a little bit of uh equities, crypto, prediction markets.

So, if you've got an account there, I can see why it's popular. But often when you're a jack of all trades, you're a master of none. And that I think is a problem if you have a niche that you're really passionate about, whether it's crypto or it's equities or prediction markets. So for me, my focus and what I've gotten really good at is day trading US equities. And so the critical tools that I feel that I need level two hotkeys, the ability to customize those hotkeys with offsets, being able to sell by a percentage of the position.

So some of these brokers have hot keys like Interactive Brokers for instance or even Thinker Swim, Charles Schwab, but then they don't allow you to customize them. So really, these are the sort of top brokers that check all the boxes for me. And I don't have affiliate relationships with them either. It's just to say in my opinion, I think those are the better platforms to use if you're thinking about day trading. So I'm just going to say it right now.

If you're day trading on Robin Hood, you're making it 10 times harder than it needs to be. I'm not saying if you switched to a different broker you would definitely be profitable. But I think you could take a lot of profitable traders, force them to use Robin Hood, and they would no longer make money. Trading on Robin Hood is like filling up your gas tank in your car with a little baby bottle of gas. It's it you could do it that way, but why would you do it that way?

It's like cutting your grass with scissors. You could do it this way, but it's going to take 10 times longer. It's It just makes no sense. It's like watering your garden with a thimble. So, you get the idea. It just doesn't make sense. Now, in spite of all of that, uh, I decided to take you guys up on the Robin Hood double challenge. And so, I said, I'm going to make the most of this. I'm going to do the very best I can.

And my account is up 18% today. So, I'm I'm cruising, which is good. Uh, but there's no question that this is a significant challenge, and it is a choice to use a very difficult platform. Trading is already really hard. So why would you make it harder on yourself by using a difficult platform, right? If you were trying to run a business as a lawnmower, landscaper, you wouldn't do it like this. If you were trying to run a business as a gardener, farmer, whatever, you wouldn't do it like this.

You wouldn't choose to make it harder on yourself. It's like cutting down a tree with a nail file. You just wouldn't do it. It doesn't make sense. Nonetheless, some of you guys for probably not because you intentionally chose to make it harder on yourself have been using Robin Hood because it just made sense to you. And I understand that as a beginner, I was using air trade. I was using Erade. They made sense to me because they were household names.

I was familiar with them. And then after I was in the market for a while, I realized that there were actually better options for the niche that I was focusing on. So, you can trade a little faster with auto send. Auto send is I I suppose you could say a new feature of their platform. Let's see. Let me pull it up right here. Um so on Robin Hood Legend, auto send um is this little button. You can see it's right here. It's that little lightning bolt.

And when you do auto send, you have to click it and then it tells you you have to do this little disclosure so you know how it works. All right, you review it d and you accept it. And then once it's turned on, and I have it turned on right here. Um, I could turn it off and I could turn it back on. Once it's turned on, I can click and buy and my order will execute instantaneously. Now, that's Oh, look at that. The little that we call that a jack knife candle.

When you have a candle where the price pops up and then rejects like that, we call that a jack knife. So, pops up and then violent rejection back down. Nonetheless, um, so if I did like one share order here just for one share, I could click buy. It's gonna send and I've got one share. That's a real trade. I'm in this thing right now with one share. Is it and is this going to be a winner? All right, keep your fingers crossed.

I'm up one cent. Can I get two cents? I'm down two cents, 4 cents. Uh-oh. It's not looking good. So, if I want to get out, I want to jump out of this. I'm like, I'm going to take the 6 cent, 8 cent loss. I click sell market and boom, the trade's gone. Here's the problem. You can't do that pre-market because pre-market doesn't have market orders. So, if you're trading pre-market, you've got to come down here, you've got to click this buy button right here, and then you've got to type in what you want, right?

And then you can execute it. And it's going to default as a limit order during the pre-market session. That's a lot of pointing and a lot of clicking, as you'll see when I get into the um uh the live archive. So, number one, enabling autoend did make it so I could trade faster, at least in theory. Um, and then in the equities um, legend settings, I changed my orders to be extended hours so I could trade um, early and just so it was by default set that way.

Um, that made it a little bit faster. And then they have a ladder which is very familiar to those of you guys that use Thinkorswim. This is the Thinkorswim ladder right here. This is the Robin Hood ladder. So, something I'll tell you that I think is kind of interesting about Thinker Swim is that their ladder, I mean, look, I'll tell you, Thinkorswim has been around for a really long time. They're not a new broker. So, they've customized their platform, you know, quite a bit over the years.

It's not perfect, but it it works pretty well. So, I'm going to pull up um let's see. I'm going to pull up my uh my ladder here. So, this is the ladder as you can see right here for Ford. All right. So, I have it for one share. And if you've got the the bid and the ask. So the bids are right here. But this is the price as it goes up or down. So let's say the current price is 1382, which is not um a stretch of the imagination since that's literally the current price.

And I want to buy this. How do I buy it? If I want to use the ladder, I could of course click these buttons. Now Robin Hood doesn't offer buttons like this. So, I could click these these buttons, but uh I also if I click go on this side, these are all sell. You see that little red bubble? Sell, stop, sell limit. This is buy, stop, buy limit. So, if I put an order down here, it's not going to fill. If I put an order up here, it won't fill until the price crosses that level because it's a stop order.

But if I press the shift button, sorry, the control button, I can click and it changes from a stop to a limit. And so, just like that, I could jump in this and I'm in with one share. And then I want to get out and I go like this. And so you can point and click, point and click doing this little jump and you can be jumping in and out right now. Not going to make a lot of money doing that, but you can you can get in and out pretty quickly.

It's It's not the smoothest platform that I've ever used. I I don't love uh Thinker Swim. Uh in fact, I actually prefer uh the Weeble platform of the three. I like Weeble the best. Uh there's no question about that. Um, but the problem with Robin Hood Legend is that you don't have the ability to rightclick on this um, and turn it into or press control or shift and turn it into a buy limit order. So, it's just a stop.

So, if I put an order down here, buy limit is below the price, right? And these are sell. So, it's a very simple modification to to change the ladder that you press the control button and it turns into a limit order, but they haven't done that yet. So, as of right now, since they haven't done it yet, you're kind of stuck with fumbling when you get in and out. Okay, so you already know the account is up 18% today. I'm making good progress, which is great.

This is where we sit. I funded the account with $2,000 and well, I guess we could put it to 2020 since I got the $20 match thanks to Robin Hood. The account balance now today, end of day, is $2,389.87, up 18%. I've taken one trade in the challenge, 100% accuracy. That's great, but it won't last forever. And so, the average daily gain is $36,987. I'm not going to add the $20 into the average daily gain. So today's trade, all right, you can see that's the P&L right off of Robin Hood.

This was a stock that I found. U it had breaking news. The news came out uh just at 8:45. It was 8:45 a.m. right here. Um we had this breaking news headline. So the stock uh pops up on breaking news. So when the stock first has news, it's sort of the chicken or the egg. How do I find stocks that have news? I mean there's there's companies that are putting out headlines all day long. I mean really. I mean, every day there's dozens and dozens and dozens of headlines that come out.

So, how do I know probably hundreds of headlines? How do I know which ones are actionable? Well, the truth is I don't. And so, I don't search the news. I use a different technique for finding these stocks. I use scanners. And what these scanners are doing is they're searching the market in real time for stocks that are moving up. So, this stock hits my scanner and it hits at 8:45 and 7 seconds. All right. So, that was pretty fast.

It hits really quickly. Only 7 seconds before it's hitting the scanner and it's squeezing up. Goes from $1.70, $1.79 uh up to $2 up to $ 230. And it kept squeezing higher. Now, as it was hitting the scanner, it was giving the audio alert. So, we're getting that audio notification. And I hear that. And I come over and I see what's going on. I was actually away from my desk for a second, but I had the audio notification on.

So, I came over. I pull up the chart and I see, all right, hold on. We got a stock that just went from a dollar 30 all the way up to 350. It's pulling back right here. And this represents a pattern that I trade all the time. It is called the first pullback. I love taking trades on the first pullback on a strong stock. Now, I'll just show you here uh for those of you guys that missed um this part of the last episode, I was showing you this pullback pattern, and I think I give you um a live demonstration.

So, this is a squeeze up, then a pullback, one candle. Sometimes it's one candle, a pullback, sometimes it's two. But what I'm looking for is the first candle to make a new high and push back up. And right here, it was a second pullback, and then it pushes higher. That's my entry. Profit target is a retest a high a day. And boom, we got it right there. So now let's look at this example here. So squeezing up, pulling back for one candle, and then it pushes higher.

We only had one candle pullback. So this was the moment where I had to make a decision of whether or not I was going to pull the trigger. Now, this stock met all five pillars of stock selection. As we discussed in the first episode of the Robin Hood small account challenge, it had five times relative volume. It was already up 10%. It had breaking news. It was between two and 20 and the float was less than 20 million shares.

Check, check, check. Of course, that's part of the reason that it was already on my scanners because my scanners are looking for a very particular set of criteria. So, I have different scanners, some that cast a slightly wider net, others that are um a bit more detailed. But in this case, I was looking for a stock that was squeezing up very quickly and boom, we got it. So, we got this pop right here. And now what I'm going to do is I'm going to pull up the live archive so you can see how I was navigating the Robin Hood platform.

Now, I will tell you for those of you guys that like Robin Hood on their mobile app, they do have um like a top daily movers that show you some of the biggest um some of the biggest gains in the market. So, you can switch between um different currencies of course, but if you look at top movers right here, oh, those are those um you could scroll down, you can look at earnings, you can look at highest implied volatility, and then daily price jumps right here.

And so CJMBB is right now at the top of that scan and currently up 177%. And so you could find this um in sort of a roundabout way on the Robin Hood mobile app, but it would just take you a second. All right, so if we back this up here, um this is going to be the live archive of me taking this trade. So we're going to go kind of frame by frame. So I type in the symbol, I click enter, it loads, and I'm looking at the chart.

I then put in the shares for 500. And then I remember I can't do a market order, right? So then I come down here, I click buy. I put in here 500 shares. Now I'm just doing a I'm just doing ballpark. I you could see the estimated cost. I could have taken 600 shares. I could have taken a little bit more size, but I just typed in 500 real quick. And I knew I wanted to get in this very quickly for the break through this high because I knew we were on this little pullback.

So I put it in there. The orders for 330 and I click the buy button. So let's see. I come down there. I click the buy button and boom, I'm in the trade. So now I'm in it's work. But actually, let's back that up. Let's see how long it takes for me to fill. So I'm going to click the buy button right there. One, two, three, four, five. Like, you know, a couple seconds. I mean, I we're not timing that exactly, but you get the idea.

I mean, you could you could time it exactly if you wanted to. So, it it took a second there to fill. Then I'm in with 500 shares. And interestingly, I filled at 330. I filled at the top there. So, um, so now I'm in and it dips for a second. Um, but I'm okay with that because number one, we've got the support at the volume weight average price. And number two, right now, this is our leading gainer in the market. And first pullbacks get bought up.

So, it squeezes up here to a high of 429. And I'm like, holy smokes. Sell, you son of a gun. Sell, sell, sell. And I'm having a hard time figuring it out. Sell, sell, sell. There's the sell button. There it is. And I'm out. I'm fumbling. So, this is the problem is that I'm just, you could tell. I mean, I could have captured I captured h I made about half of what I could have made at my peak, which was $655. I made half of that because I wasn't able to sell quickly.

I was too slow. That's frustrating, right? So now I'm jumping around here. I'm like, what's going on? Where, you know, what's happening? And I'm I it's I I get the profit, but you know, that's that's just really frustrating. So, hey, you know what? That was a one minute long trade. Sometimes you have a trade and a lot of times my trades are, you know, 15 20 cents a share. So that was a that was a much bigger winner. One of the things that I think adds context today is that uh we already well there's a couple things.

So number one uh yesterday we had a stock that made um a really huge move. It was ROR. So ROR made a huge move yesterday. It goes from about $5 a share to $36. So this was incredible. All right, that was yesterday. Then this morning we had PHL. I traded this in my main account. made uh some good money on it. So, we had the squeeze here from $2 all the way up to $12. Then, we had BNKK. This one squeezed from $2 to $6.

So, CJMBB was the third stock to hit the scanner this morning that was really strong and it went from A120 to 480. And I'm buying, of course, on the one minute chart on that first pullback, which was right here. And this was absolutely the right spot to take a trade. jumping in, jumping out, and then it would have been nice if we got a second leg higher. It pulled back for a little bit, and then it breaks through the VWAP and makes another attempt back up towards those levels.

Although, you can see now that we've got, as I mentioned, um, a couple of jack knife candles right here, um, which which we don't like so much. But in any case, usually the moves are the cleanest on the earlier side. So, I want to get in, get green, lock up the profit, and not overstay my welcome. So, that's the trade. That's the live archive. And my wish list for Robin Hood is to add hotkeys like Weeble. Weeble has hotkeys so I can get in and get out just pressing shift one and control Z.

In an instant I can be in and out of Weeble. I'll demonstrate for you. So I'm going to switch. I don't want to trade in my uh Roth account, my small account challenge. I'm going to trade in this account right here. And so I got to go in here. I have to change the hotkeys real real quick. But um if I go to settings and I go to trade and I go hotkeys and then trade, you can go down. You can customize these hotkeys as you like.

So shift one for instance um we'll change shift two to buy just two shares. So shift two by two shares 10 cents above the ask. Boom. And boom. So now I'm going to pull up Ford. That's a nice safe stock to buy. Ford. Boom. And I'm going to go shift two. And it's going to send it. I think that'll be okay. And I'm going to be in two shares. Boom. Just like that, I'm in. So, just shift two and I'm in. Now, this is because it's got a day trading restriction on it.

So, I've got to hold this overnight, but it's fine. I'll just hold it overnight. It's four shares. Doesn't matter. But that makes it so fast. Robin Hood needs to add hotkeys. They need an improved ladder where you can click control and buy with limit orders. they need to add level two and time in sales so you can actually see what's going on because without that it's almost impossible. And number four, they should add a filter on ADFN orders because when charts look like this, you can't see what's going on and that doesn't work.

So you don't want that either. And then number five, they should show closed positions because once you close your position, if you're day trading, you still want to keep track of how much you made. So now I can see that I'm up on the day, but I can't see it. it it doesn't show me which stock I made the money on. So, that doesn't work either. So, here's my opinion. When it comes to doing a small account challenge with Robin Hood, you're making it way harder on yourself than it needs to be.

And another factor is speed. Thinker Swim actually in my testing was a little bit slower. Robin Hood is right here and Weeble, boom, right there. Now, Lightseed, the direct access broker I use is right here. But this one you have to pay for. It's not commission free and you need a minimum account size of $25,000 because of the pattern day trader rule. Weeble, that's a US broker. You could trade there with a small account, but it's going to be a cash account at least until the pattern day trader rule is amended.

And the word is that that could happen sometime this year, which is a big deal. So, this is a good time for you guys to start studying for those of you who are new. And if you want to watch a real small account challenge where I'm not restrained by the restrictions of a platform that was not customized or designed at all for day trading, I'm going to put links to day one of the small account challenge where I funded an account with $2,000.

I was able to day trade in it. And over the course of six days, over the course of six days, I took that $2,000 account and you know what I turned it into? I turned it into a total account size of $59,000 and then I donated all of the profit to the Boston Children's Hospital and St. Jude's Children's Hospital. That is a small account challenge. So, if you really want to day trade, you should not be using Robin Hood. And so my my goal here was to show you what my experience was like and hopefully to point you guys in the right direction that if you want if you want to watch me do a small account challenge, let's start over.

Let's do a real small account challenge at a broker that actually is designed for day trading. Let's not make it harder on ourselves than it needs to be. So that's what I'm going to do. I'm going to take my $2,000. I'm going to take it out of light out of Robin Hood and I'm going to fund a new small account challenge that's going to start. So the next upload will be day one and I'm going to use one of the brokers that is actually catering to day traders and let's see what that looks like.

So that will be the next episode. And for those of you guys that want to watch my last small account challenge with $2,000 turning it into $59,000, I'll put a link to that right there. And as always, I'll remind you that my results are not typical. I funded my first account in 2001. I've been trading for a long time. So, please take it slow and practice in a simulator before you ever put real money on the line. I will see you for the next upload real soon.