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borrow money from credit card to trade? without hurting your trading emotion?

  • #21
  • Apr 2, 2010 4:39am Apr 2, 2010 4:39am
Can you pay back the CC if you are not trading. If so - then borrow - if not then forget it.
In other words, if that CC is cash you can lose - go for it.
In trading, there is no bullshit. You either make money or you don't.
  • #22
  • Apr 2, 2010 6:00am Apr 2, 2010 6:00am
you have a $6k account so you can trade like a few lots why borrow more money ? do you want to have bigger account to increase your position size and feel that you are with the rules of mm ? but borrowed money is not yours so YOUR account wont really increase!!!!!
  • #23
  • Edited 6:53am Apr 2, 2010 6:05am | Edited 6:53am
Quoting pete.alfa
Now it's my business planing...
I think the first thing you need to look at is how much the money is going to cost you, including interest, transaction fees, and compounded interest. If you're using your card for cash advances don't forget there's a fee and that interest is charged from day one, not ~60-day interest free. If you're using a credit card to fund an account most bròkers charge a handling fee, and some credit card companies even consider transactions like that as cash advances. Also, in today's risk averse climate, if the credit card company thinks you're using your card to finance gambling they may significantly reduce your limit.

Then, being realistic, calculate what your estimated return is on that borrowed money.

Deduct one from the other to see if it's viable or even worth all the effort.

If all that stacks up then consider what happens when you have a couple of losing months (I'm not sure but I think you covered this). If you don't clear your CC balance then you're going to be paying interest on interest.

If you're determined to go the credit card route then see if there are any 0% deals still around, maybe moving from company to company using 0% interest on balance transfers, mind you there is usually a ~2% transfer fee.

It's still a bad idea though, and (excluding 0% deals) the most expensive way to borrow money. The temptation will be to pay the minimum each month (especially after a losing month) and the debt can very quickly get out of control.

Why not just go for some kind of cheap(er) flexible fixed-rate loan or revolving credit? It sounds like your credit rating is good so you shouldn't have too much trouble. You'll know your repayments are covered even if you have a few bad months, heck if the worst happens you could ask for a repayment holiday or heaven forbid get a part-time job to cover them!!

Edit: Think about it, you're planning on using a potentially expensive short-term credit facility which is intended for consumers, to fund a business, doesn't sound right does it?

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  • #24
  • Apr 2, 2010 6:35am Apr 2, 2010 6:35am
Quoting pipmutt
I think the first thing you need to look at is how much the money is going to cost you, including interest, transaction fees, and compounded interest. If you're using your card for cash advances don't forget there's a fee and that interest is charged from day one, not ~60-day interest free. If you're using a credit card to fund an account most bròkers charge a handling fee, and some credit card companies even consider transactions like that as cash advances. Also, in today's risk averse climate, if the credit card company thinks you're using your...
Great advice here.

On a kind of unrelated note - Anyone notice how helpful and friendly we all are on threads less about trading and more about other things (in this thread - borrowing money) the only exception seems to be politics in the members lounge.
Living the adventure in my head.
  • #25
  • Apr 2, 2010 7:00am Apr 2, 2010 7:00am
Quoting Leonlorenzo
Great advice here.

On a kind of unrelated note - Anyone notice how helpful and friendly we all are on threads less about trading and more about other things (in this thread - borrowing money) the only exception seems to be politics in the members lounge.
Hey Leon, enjoying the bank holiday?

Yeah strange isn't it, maybe trading brings out the worst in people!
  • #26
  • Apr 2, 2010 7:08am Apr 2, 2010 7:08am
Quoting pipmutt
Hey Leon, enjoying the bank holiday?

Yeah strange isn't it, maybe trading brings out the worst in people!
Yea, I'm enjoying it by being a slob right now... but later on I'll be enjoying it propperly... A few drinks, some music, and pretty girls should do the job.

Hope you have something fun lined up.
Living the adventure in my head.
  • #27
  • Edited Apr 3, 2010 1:31am Apr 2, 2010 6:53pm | Edited Apr 3, 2010 1:31am
Quoting pipmutt
I think the first thing you need to look at is how much the money is going to cost you, including interest, transaction fees, and compounded interest. If you're using your card for cash advances don't forget there's a fee and that interest is charged from day one, not ~60-day interest free. If you're using a credit card to fund an account most bròkers charge a handling fee, and some credit card companies even consider transactions like that as cash advances. Also, in today's risk averse climate, if the credit card company thinks you're using...
Thank you pipmutt for your advice And also it's my pleasure to have such a great trader spending time with me. Your advice is helping me to revaluate the condition & result of that I have the conclusion for my management & trade planning.

My mind has been going round & round how to using credit card facility to my benefit in trading bcos I'm paying their annual fees every year but hardly use them. I normally use my credit card only for emergency and also my business expenses which I normally pay off on time so I don't pay interest.

I think I've solved my problem for my planning to reach my goal since last night. & recalculated every thing.

1. my goal target is $100/day.
2. my max loss $150-200/day worst case $300/day

with my cash $6000 it won't cover the 2%MM for $300.
For 2%MM my capital should be at least $15,000

With my capital $6000 I don't have to borrow money at all but I will mentally use my CC to my benifit to increase my lot size so I can make more money & ofcos can lose more too. Negative result can not do all below mention.

I'm going to have 2 accounts 1st. real trading account 2nd. Fake CC account.
I might put $3750(quater of $15,000) or $4000 to trading account for real trading.

For the Fake CC account I'll increase $1000 each day & mentally thinking I have $7000,$8000,$9000 in trading account and so on(possible up to $10- $15,000).... to trade , which ofcos I can increase my lot size to make more profit and control my loss accordingly to2MM(max. $500) everyday.
Optional at the end of the month I will calculate I should have at least 1 or 2% extra on top of the profit to cover possible loss($500) for this CC fake account.

And if I lose I will go back to evaluate the condition when ready - start counting one again(beginning with $1000.....&so on)

Happy Easter
  • #28
  • Apr 2, 2010 11:38pm Apr 2, 2010 11:38pm
Quoting pete.alfa
great trader
I wish I was!

Truth be known there's rarely a day goes by that I don't wonder if the market will catch on to all my smoke and mirrors! But, so far - so good.....


Quoting pete.alfa
With my capital $6000 I don't have to borrow money at all but I will mental use my CC to my benifit to increase my lot size so I can make more money & ofcos can lose more too.
If you can handle it psychologically then great (mind you that CC money isn't actually yours but maybe that's just academic).

It's harder than you might think to trade a balance and treat it as a larger balance, you've got to constantly remind yourself that although it looks like you're overleveraged and risking too much, in fact you're not. I'm doing a similar thing with an account at a US brôker where (unlike UK FSA regulated brôkers) funds aren't protected. It takes some mental adjustment to remain calm when I see a 20% drawdown of account balance which in fact is really only 2% of allocated trading equity!

Good luck with it, and happy holidays to you as well!

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  • #29
  • Apr 3, 2010 3:24am Apr 3, 2010 3:24am
If/when I start making 10% per month, I would try to get a loan. In UK cheapest way to borrow money is mortgage. £100000 mortgage at 5% interest rate and the repayments are approx £550 per month. youll be making £10000 per month. Pay the mortgage and bank the profits, compound interest on that is large!

Only problem is getting the mortgage, other option is business loan?
  • #30
  • Apr 3, 2010 7:54am Apr 3, 2010 7:54am
Quoting Scotty2Cues
If/when I start making 10% per month, I would try to get a loan. In UK cheapest way to borrow money is mortgage. £100000 mortgage at 5% interest rate and the repayments are approx £550 per month. youll be making £10000 per month. Pay the mortgage and bank the profits, compound interest on that is large!

Only problem is getting the mortgage, other option is business loan?

lol, too funny

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  • #31
  • Apr 3, 2010 10:08am Apr 3, 2010 10:08am
Just use the credit card and if you blow your account then just go bankrupt.

Wait 2 years and repeat the process.

Easy.

  • #32
  • Apr 3, 2010 10:28am Apr 3, 2010 10:28am
Quoting scooby-doo
Just use the credit card and if you blow your account then just go bankrupt.

Wait 2 years and repeat the process.

Easy.


Hey Scoobs, looks like your MyFXBook has been deleted....


http://i40.tinypic.com/2exwjyv.jpg
  • #33
  • Apr 3, 2010 4:24pm Apr 3, 2010 4:24pm
surely sell spare jewelry to fund your account with as those cash4gold adverts are all the rave
  • #34
  • Last Post: Apr 4, 2010 6:14pm Apr 4, 2010 6:14pm
Dont borrow money from anywhere to trade forex ...

Why not just open a really small account with Oanda ? You can even trade with USD 50. Keep trading, save some money ... then inject your money into the account from time to time .... watch your account grow (assuming your trades are doing good).
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