As millions of new traders sign up for the investment app Robinhood, the company is facing scrutiny for enabling some inexperienced users to make risky bets. WSJ spoke with a financial education professional and two Robinhood traders about how the app is shaking up the brokerage industry.
Robinhood’s claim to fame is that they do not charge commissions for stock, options, or cryptocurrency trading. Due to industry-wide changes, however, they’re no longer the only free game in town. The firm’s target customer base is young people new to investing, who are drawn to the app by advertising that leans heavily on words such as “free” and “democratization.” By and large, this tactic has succeeded, drawing in 10 million accounts held by an unknown number of customers. But what happens to them when they outgrow Robinhood’s meager research capabilities or get frustrated by outages during market surges?
What is the catch with Robinhood trading?
They sell your trade activity to third party high frequency trading firms. Robinhood ain’t bad though. Good for the average investor. No catch, but depending on how much money you have in your account, you may be able to get commission free trades elsewhere.
Is Robinhood good for trading stocks?
Robinhood provides a bare-bones trading experience, making it a poor choice for investors seeking the best trading platform. Also, Robinhood’s stock research tools are severely lacking when compared to $0 brokers such as TD Ameritrade, Charles Schwab, and Fidelity.
Can you actually make money on Robinhood?
Yes, eventually Robinhood can make you rich. However, this is not because of Robinhood or their sleek mobile app. Whether or not you will become rich through Robinhood solely depends on your own investment decisions. Trading and speculating will very likely not make you rich.
[source: WSJ | Investopedia]
Investors are again questioning whether the Swiss franc and Japanese yen remain safe-haven currencies, Morgan Stanley says. “We say yes they are, but suggest that USD is likely to become the favored safe haven as the fall in U.S. rates this year makes it an attractive funding currency for borrowing and carry trades,” the investment bank says. For example, the CHF’s appreciation potential is limited by Swiss National Bank intervening in currency markets, Morgan Stanley says.
The US dollar weakens 0.5% against the euro and 0.6% against the yen, and the WSJ Dollar Index declines 0.5%. The S&P 500 hit an all-time high of 3389, inching past its prelockdown record set in February. Meanwhile, investors are buying gold, with prices rising 0.7% and trading just below $2000 today, not too far from the metal’s own all-time high. “Nothing is expressing the weak dollar sentiment better than gold,” BK Asset Management says. The firm points to political disarray and lack of a coronavirus stimulus deal in Congress, adding gold is acting as a store of value as the market loses faith in US leadership.
👉 S&P 500 erased all the pandemic losses and finally closed at a new record high of 3389.78. Nasdaq also hit a new high. The US stocks were supported by the strong housing data and renewed hope on the stimulus package. European benchmarks closed in red.
👉 The US dollar index (USDX) sank to 92.30 ahead of the release of July FOMC meeting minutes, while the yield on 10-year Treasuries declined to 0.67%. The greenback traded lower against all major currencies, with USD/JPY extending the losses to 105.40.
👉 EUR surged for the sixth consecutive sessions to a new 2020 high of 1.1931. Out performer GBP pushed through the key resistance level and closed at a seven-month high of 1.3238.
👉 AUD advanced to 0.7242 amid the positive market mood despite China’s anti-dumping investigations on Australian wine. NZD regained 0.66. USDCNH weakened to 6.9054, the lowest close price since January.
👉 Gold soared above $2000 for the first time in a week on the rising geopolitical risks. Silver edged higher to $27.65. WTI crude (XTIUSD) retreated from a five-month high to $42.45.
As we have observed earlier in the Currency Monitoring Chart, we discovered that all currency pairs contracted as it is waiting for a Big Move.
INTRADAY MARKET INSIGHTS
USD/JPY Intraday:
Downside prevails. The pair continues a bearish pattern of lower highs. The descending 20-period moving average, which stands below the 50-period one, keeps capping the pair’s upside potential. The pair has shot below the lower Bollinger band and is expected to sink toward 105.00 and 104.75 on the downside. Only a return to the key resistance at 105.55 would bring about a bullish reversal.
EUR/USD Intraday:
Supported by a rising trend line. The pair keeps riding on a bullish trend line drawn from August 16. Currently it is striking against the upper Bollinger band holding the intraday bias as bullish. Unless the key support at 1.1910 is breached, the pair should proceed toward 1.1965 and 1.1985 on the upside.
AUD/USD Intraday:
Continuation of the rebound. The pair posted a rebound and returned the level above both rising 20-period and 50-period moving averages. The relative strength index is heading upward, suggesting the upward momentum for the prices. Hence, above 0.7230, look for a further advance with targets at 0.7275 and 0.7295 in extension. On the other hand, a break below 0.7230 would bring a return with 0.7210 and 0.7190 as targets.
NZD/USD intraday:
Further upside. The technical outlook of the pair is positive, as the prices have recorded a series of higher tops and higher bottoms since August 17. The upward momentum is further reinforced by both rising 20-period and 50-period moving averages. To conclude, unless the support level at 0.6585 is violated, the pair should reach 0.6635 and 0.6648 on the upside. Alternatively, a break below 0.6585 would open a path to 0.6563 on the downside.
GBP/USD Intraday:
Watch 1.3290. The pair is holding on the upside and is supported by a rising 20-period moving average. The relative strength index is locating at the overbought level at 70, suggesting a strong upward momentum for the prices. Therefore, as long as 1.3215 holds on the downside, expect a rise with targets at 1.3265 and 1.3290 in extension. Alternatively, a break below 1.3215 would bring a drop with 1.3185 and 1.3150 as targets.
USD/CHF Intraday:
Key resistance at 0.9040. Although the pair posted a rebound from 0.9005, the upward potential is likely to be limited by the resistance at 0.9040. In fact, the prices remain trading below both declining 20-period and 50-period moving averages. To sum up, below 0.9040, look for a further downside with targets at 0.9005 and 0.8985 in extension. On the other hand, crossing above 0.9040 would bring a technical rebound with 0.9065 and 0.9095 as targets.
USD/CAD Intraday:
Downside prevails. The pair is capped by a bearish trend line drawn from August 17. Currently, it is trading at levels below both the descending 20-period and 50-period moving averages, while the relative strength index remains subdued in the 40s, suggesting a bearish bias. Below the key resistance at 1.3185, expect a decline to 1.3145 and 1.3125. Alternatively, a break above 1.3185 would trigger a revisit to 1.3205 on the upside.
EUR/JPY Intraday:
Target 125.10. The pair remains on the downside as it has formed a lower-high. Currently, it has broken below the 20-period moving average, and the relative strength index has dropped below the neutrality level of 50, indicating a bearish bias. Unless the key resistance at 126.08 is surpassed, the pair should target 125.29 and 125.10 on the downside. Alternatively, above 126.08, expect a rebound to 126.39.
EUR/GBP Intraday:
Rebound. The pair has stabilized after reaching the day-low of August 14. In fact, it has rebounded and is challenging the 20-period moving average, while the relative strength index shows a bullish divergence. As long as the key support at 0.8996 holds, the pair should proceed to 0.9043 and 0.9055 on the upside. Alternatively, a break below 0.8996 would open a path to 0.8975 on the downside.
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