Review Robinhood vs. FOREX.com to make the best decision for your trading strategy!
Two very different brokers for different trader demographics are the focus of this comparative Benzinga review. Robinhood was one of the first online brokers to offer commission-free trading of listed stocks and options, while FOREX.com is the largest U.S. forex broker and makes spot forex and precious metals trading available to U.S. clients. Both brokers maintain excellent reputations in their respective fields, so read on to find out which broker best fits your needs.
What is Robinhood?
Robinhood is a trading app that allows users to invest in stocks, ETFs, options, and even cryptocurrency without having to pay any commission fees. The app was founded in 2013 by two Stanford University graduates and has since become one of the most popular investment apps on the market, particularly among younger generations.
What makes Robinhood popular is its user-friendly interface and accessibility. Users can easily sign up for an account, link it to their bank account, and start investing with as little as $1. The app also offers educational resources and market data to help users make informed decisions about their investments.
However, it's important to note that Robinhood isn't without controversy. Some critics argue that the app encourages risky trading behavior due to its commission-free model and easy accessibility.
What is FOREX.com?
FOREX.com is a leading online currency trading platform that provides its users with access to the global financial markets. The platform allows traders to buy, sell, and exchange currencies from around the world without having to physically possess any currency. You can also trade options contract, futures and gold and silver.
FOREX.com offers a wide range of tools and resources to help traders manage their investments and stay up-to-date on market trends. The platform is user-friendly and allows traders to easily execute trades and monitor their portfolios from anywhere in the world. With its advanced trading technology and customizable interface, FOREX.com is a preferred choice for traders of all levels – from novice to experienced.
FOREX.com offers a comprehensive and reliable online trading experience that is trusted by traders all over the world. FOREX.com provides the resources and support you need to make informed decisions and achieve your financial goals.
Robinhood vs. FOREX.com Fees
Since Robinhood and FOREX.com focus on different markets, their fees and commissions are difficult to compare. The trading costs associated with both brokers are outlined below.
What Robinhood Offers
Robinhood offers commission-free trading in stocks, stock options and exchange-traded funds (ETFs). Robinhood also offers cryptocurrency trading, although you must leave all of your coins with Robinhood. This means you cannot withdraw your coins to your own private wallet or hold the keys to your crypto assets.
For a $5 monthly fee, you can opt into a Robinhood Gold account, which lets you trade in a margin account with a $2,000 minimum deposit. The highest fee charged at Robinhood is a $75 outgoing account transfer fee that you’ll need to pay if you want to transfer your account to another broker. This fee can be avoided by liquidating all of your positions and having Robinhood transfer the resulting funds to your bank.
What FOREX.com Offers
FOREX.com does not support trading in stocks, stock options or ETFs, but you can trade spot gold and silver in addition to 80 forex currency pairs. FOREX.com does not charge commissions on transactions either. The online forex broker instead makes its money on a forex trade via the dealing spread. The dealing spread consists of the difference between the bid and the offer exchange rate for a currency pair. The tighter the spread, the more advantageous to traders.
The cost of your forex trade can be determined by the “mid-point spread cost,” which is the midpoint of the dealing spread at the time of your transaction compared to the rate you dealt at. During markets where extreme volatility is at play, dealing spreads can widen considerably and can thereby result in a higher mid-point spread cost for your trades.
Furthermore, stop-loss orders triggered in a fast market may also be filled at a significantly worse rate than the level specified, which is known as “slippage” and represents another potential trading cost. Holding overnight positions can also result in rollover charges, while the broker charges an inactivity fee of 15 accounting currency units after 12 months.
Better Platform: It Depends
You pay only the dealing spread in transaction fees at both brokers. The best platform will therefore be Robinhood if you want to trade stocks, stock options or ETFs, while it will be FOREX.com if you want to trade spot forex or precious metals.
Robinhood vs. FOREX.com Mobile App
Robinhood’s platform was initially released as a mobile app, while FOREX.com developed its mobile app from its desktop version. Robinhood now offers a desktop version of its app, so you can trade from your desktop as well as your mobile device. Both mobile apps provide traders with a solid platform to trade from.
What Robinhood Offers
Robinhood’s mobile app is available for Android and iOS devices and has been carefully designed for simplicity and ease of use. You can access candlestick charts, a news feed and customized alerts via the app. In addition, you can listen in live to companies’ earnings calls.
While the Robinhood mobile app may not include some of the more advanced features of other mobile stock trading apps, the app is more than adequate for stock, options and ETF traders who want timely trade execution.
What FOREX.com Offers
The FOREX.com mobile app is considered among the best of its kind and is available for Android and iOS mobile devices. The app features real-time order alerts, advanced charting and analysis tools, risk management options and integrated fund management. In addition to the broker’s proprietary mobile app, you have the option of downloading the free MetaTrader 4 or 5 (MT4/5) mobile trading app with all the advanced features found on popular trading platforms.
The app also features a Reuters news feed, comprehensive market analysis and economic calendars. You can also personalize the navigation bar and dashboard, as well as set up watchlists and alerts. In addition to market and limit orders, you can enter trailing stop orders and conditional orders like one cancels the other (OCO) orders.
Better Platform: FOREX.com
The mobile platforms offered by FOREX.com offer considerably more features and research options than Robinhood, which only offers one basic mobile platform. Nevertheless, if you want to trade stocks, stock options or ETFs, you’ll want to use Robinhood, while you’ll use FOREX.com if you want to trade spot forex or precious metals.
Robinhood vs. FOREX.com Customer Support
Access to live and reliable customer support can be extremely important if you trade in volatile markets, as the recent dramatic moves in both the stock and forex markets have highlighted. If you have an issue on a trade, then direct communication with your broker could save you a lot of money if the problem is dealt with promptly.
What Robinhood Offers
At Robinhood, customer service is limited to email contact, with no live chat or even a phone number where you can get a real person.
While a phone number for Robinhood’s office in Menlo Park, California, was obtained after considerable research, the number answered with a message referring the caller back to the website or mobile app for additional support.
Robinhood’s customer support is therefore limited to emailing the broker with the details of your concern or reviewing its extensive frequently asked questions (FAQ) page where you can select a link to read information about an issue.
What FOREX.com Offers
FOREX.com’s customer support lets you contact the broker via email and live chat. While no direct phone number was found on its website, you can contact FOREX.com through its live chat feature 24 hours a day during the trading week from 10 a.m. Sunday until 5 p.m. Friday EST.
Better Platform: FOREX.com
Although neither broker offers a direct phone line to their customer service departments at present, FOREX.com at least gives you a live chat option, which is more than you can get at Robinhood. Both brokers offer extensive FAQ pages, but Robinhood’s limited customer service options make FOREX.com the winner in this category.
Robinhood vs. FOREX.com Ease of Use
FOREX.com and Robinhood’s platforms are both intuitive and easy to use, although they are directed to different types of traders. They are both good choices in their respective domains.
What Robinhood Offers
The Robinhood app can be learned and used quickly by new and seasoned traders alike. The broker’s app also lets you upload your information and get started trading in very little time after you’ve deposited some funds into your account.
What FOREX.com Offers
The FOREX.com proprietary and MT4/5 platforms are both quite easy to learn and use. You also have the option of opening a demo account with FOREX.com, which allows you to trade with virtual money in case you wish to practice trading.
Better Platform: Robinhood
The simple Robinhood app is easier to navigate initially, but FOREX.com’s support for the MT4/5 platforms and its own proprietary platform offers more features and options than Robinhood. Again, choose the broker that offers the assets you want to trade.
Robinhood vs. FOREX.com Accounts and Features
What Robinhood Offers
Robinhood lets you trade stocks, stock options and ETFs in your trading account but does not offer staff to assist you with your trades. Your account choices at Robinhood are limited to its free basic account and its Gold Account that costs $5 per month and lets you trade on margin.
What FOREX.com Offers
FOREX.com lets you trade over 80 currency pairs in the foreign exchange market and spot gold and silver in your trading account. If you’re interested in trading futures and options on futures, you can open an account with its FuturesOnline affiliate. In addition to its proprietary trading platforms, you can use the popular MT4/5 platforms with FOREX.com.
You can open 3 types of accounts at FOREX.com:
- Standard account: The free basic forex account offers competitive dealing spreads and no commissions. You also have the opportunity to reduce costs by as much as 18% via cash rebates.
- Commission account: This commission account features spreads as low as 0.2 on EUR/USD. Trades cost $5 commission per 100,000 base currency units traded. You cannot use MT4/5 with this account type.
- STP Pro account: This premium account requires a $25,000 initial deposit and a minimum trade size of 100,000 to get direct access to top forex liquidity providers with multiple levels of real-time pricing. MT4/5 is also not supported.
Better Platform: FOREX.com
Both brokers offer their clients features appropriate for the markets they service, although FOREX.com has a wider variety of account types that can better suit different traders.
Overall Winner: FOREX.com
FOREX.com wins here primarily because of its better customer support, account types and apps, although due to the fact that the brokers reviewed here service different markets, they are not directly comparable.
In general, stock, stock options and ETF traders will find Robinhood the better choice, while forex and spot metals traders will want to select FOREX.com.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% to 77.7% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.
The products and services available to you at FOREX.com will depend on your location and on which of its regulated entities holds your account
Frequently Asked Questions
Can I do forex, futures or commodities trading with Robinhood?
Robinhood does not offer forex, futures and commodities trading.
Are there trading limits on Robinhood?
You can make only 3 stock trades per week.
Is FOREX.com a good broker?
FOREX.com is an excellent broker option for foreign exchange traders.
Get a Forex Pro on Your Side
FOREX.com, registered with the Commodity Futures Trading Commission (CFTC), lets you trade a wide range of forex markets with low pricing and fast, quality execution on every trade.
You can also tap into:
- EUR/USD as low as 0.2 with fixed $5 commissions per 100,000
- Powerful, purpose-built currency trading platforms
- Monthly cash rebates of up to $9 per million dollars traded with FOREX.com’s Active Trader Program
Learn more about FOREX.com’s low pricing and how you can get started trading with FOREX.com.