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Who has ever tried to get a bank loan for trading?

  • #21
  • Feb 8, 2015 2:17pm Feb 8, 2015 2:17pm
It is the worst decision you can make in your life.

That is why all Forex companies warn the people from investing money that they need, because at the same time of having a chance of gaining profits, the same chance of losing money exists.

Before thinking in how much i can gain? think in how much i can afford as loses. This approach lets you be a more rational decision maker.
  • #22
  • Feb 8, 2015 2:39pm Feb 8, 2015 2:39pm
Some of these threads border on the lines of complete insanity. Let's just throw common sense out the window.... I hope the thread starter was just bored.
SPC * Swollen PocketZ Crew!
  • #23
  • Feb 8, 2015 3:04pm Feb 8, 2015 3:04pm
Quoting meedoing
It is the worst decision you can make in your life. That is why all Forex companies warn the people from investing money that they need, because at the same time of having a chance of gaining profits, the same chance of losing money exists. Before thinking in how much i can gain? think in how much i can afford as loses. This approach lets you be a more rational decision maker.
+1

On the other hand, a personal loan can be used for any purposes but should never be used for gambling or for online speculation.
  • #24
  • Feb 8, 2015 3:39pm Feb 8, 2015 3:39pm
Thanks everyone for the answers.

I didn't expect that this thread was causing interest and especially a large number of "No" in the survey.

Basically it comes to business risk, is like opening a startup or a restaurant, or a clothing store, a supermarket, etc ...

Once you have a strategy, or if you prefer a trading system that's profitable and you've tested first on a demo account and then on a real account with "a small capital test", cannot understand why I should grow slowly my account with only 500 or $ 1,000.

Supposing to have 25% average annual return, after five years I will be around $ 3,051, then it makes no sense.
  • #25
  • Feb 8, 2015 3:52pm Feb 8, 2015 3:52pm
Quoting gravitist
Hayseed and Grin, I don't know about other firms, but my broker Oanda has discontinued funding by credit card and paypal. Debit cards are still allowed.
I did some paypal funding, it worked. (That could be only in USA)
  • #26
  • Feb 8, 2015 4:37pm Feb 8, 2015 4:37pm
Banker: So for what purpose would you like to obtain a loan from us.

Me: I would like to engage in Forex trading using 50:1 leverage in order to gap trade over the weekend.

Banker: (silence)

Me: What?

Banker: (silence)
  • #27
  • Feb 8, 2015 5:01pm Feb 8, 2015 5:01pm
Quoting sloanman
Banker: So for what purpose would you like to obtain a loan from us. Me: I would like to engage in Forex trading using 50:1 leverage in order to gap trade over the weekend. Banker: (silence) Me: What? Banker: (silence)
(-: ..... accompanied by this look.....


Attached Image
SPC * Swollen PocketZ Crew!
  • #28
  • Feb 8, 2015 5:25pm Feb 8, 2015 5:25pm
Before this mess with CHF , I'd think that this was the most stupid idea. Now, I'm not so sure...

If you are trading with leverage, you have already "borrowed" money that could cost you a house, a car or pretty much your entire assets. If you have negative balance and your broker asks you to sell your property to cover, then it's not that different than a banking loan.

All of a sudden, since mid-January, your tiny 1:100 leveraged $1000 account is not a cute video game any more, but it turned into a vicious $99,000 loan that could bring debt collectors right to your door.
Shift happens...
  • #29
  • Feb 8, 2015 7:40pm Feb 8, 2015 7:40pm
My 2 cents......(just trying to help cause I have done so many mistakes and seen many from others)

Personally I think taking a bank loan for trading is not a great idea.....
Like I tell traders....if you can't make it with $50 you will definitely not make it with $50000.

I had someone in our "Trading Coffee Nights" that we do every Tuesday tell me that he cannot trade with small amounts, this was last summer,I recommended to him to start small, today I am sure he remembers what I told him.... he lost $10000 since then.

You do not need the added stress of trading money you will owe.....if you tell me you are experience and have already tripled your account in the past then you
would not need that money anyways....you could start small.

I believe in taking it one step at a time.....especially when it comes to trading.

4x
  • #30
  • Feb 8, 2015 7:58pm Feb 8, 2015 7:58pm
Quoting blackgeorge
All of a sudden, since mid-January, your tiny 1:100 leveraged $1000 account is not a cute video game any more, but it turned into a vicious $99,000 loan that could bring debt collectors right to your door.
Well, if that is true, I never saw a more succinct epitaph for "retail forex".
"If The Fool persists in his Folly he will become wise." - William Blake
  • #31
  • Feb 8, 2015 8:29pm Feb 8, 2015 8:29pm
I remember this phrase..from my day one..or maybe our day one
'Only Invest Money You Can Afford to Lose'

Another thing i remember is..
With the money you owe, your trading is 'Doomed to Failure'
Quoting 4xPIPAHOLIC
You do not need the added stress
Taking loan from bank? i don't think i will do it...
i worshipped... Momentum
  • #32
  • Feb 8, 2015 9:46pm Feb 8, 2015 9:46pm
Quoting lucacol
Thanks everyone for the answers. I didn't expect ... a large number of "No" in the survey.
Wow... seriously? You did NOT expect the large number of No's?

Traditional business loans involve putting up a collateral. In most cases, the "going concern" can be a collateral. What collateral can a retail trader pledge to a bank to secure a loan? For brick and mortar businesses, a bank can at least auction off fixed assets in case of default. When a retail trader defaults on borrowed capital, quite likely the only thing left will be his underwear.

Let's just put it this way: If I were a banker, I would not even give any of the top tier performers on the FF Trades Leaderboard a loan for trading, knowing what I already know about how fickle markets can be.

Quoting lucacol
Basically it comes to business risk, is like opening a startup or a restaurant, or a clothing store, a supermarket, etc ... Once you have a strategy, or if you prefer a trading system that's profitable and you've tested first on a demo account and then on a real account with "a small capital test", cannot understand why I should grow slowly my account with only 500 or $ 1,000. Supposing to have 25% average annual return, after five years I will be around $ 3,051, then it makes no sense.
That last part is likely the fault of your edge and/or your position sizing methodology. Assuming your goal is patiently building equity (and NOT regular income), it is entirely possible to build your equity to a desired amount in far less time.

You should take another look at your edge and the reasonable-ness of your expectations instead of thinking your capital is too small.
I'm not trying to convince anyone. I'm not in the "convincing" business.
  • #33
  • Feb 8, 2015 9:51pm Feb 8, 2015 9:51pm
Simple rule on every market : invest only money you can afford to loose.

No bank loans for me
  • #34
  • Feb 9, 2015 2:30am Feb 9, 2015 2:30am
Who has ever tried to get a bank loan for trading?

Yes.

It's called OPM
Better than a bank loan because you never have to pay it back ...
  • #35
  • Feb 9, 2015 3:39am Feb 9, 2015 3:39am
Borrowing money from bank is still OK.

The worst part is borrowing money from loan shark.
  • #36
  • Feb 9, 2015 6:07am Feb 9, 2015 6:07am
you dont need loan.
broker give you margin already.
3 or 4:1 per trade is enough leverage to make really good money.
  • #37
  • Feb 10, 2015 10:51pm Feb 10, 2015 10:51pm
You should only use risk capital to trade on margin.

Borrowed money is NOT risk capital.
  • #38
  • Feb 10, 2015 11:00pm Feb 10, 2015 11:00pm
Quoting Mingary
Who has ever tried to get a bank loan for trading? Yes. It's called OPM Better than a bank loan because you never have to pay it back ...
Of course there is an exception to every rule!
  • #39
  • Feb 10, 2015 11:06pm Feb 10, 2015 11:06pm
Out of curiosity, how do you even go about getting a bank loan for forex trading?
  • #40
  • Feb 10, 2015 11:12pm Feb 10, 2015 11:12pm
Quoting TraderRaven7
Out of curiosity, how do you even go about getting a bank loan for forex trading?
Probaby easiest to utilise available equity from other sources such as home equity or traditional credit mechanisms such as the credit card etc. to extend loan finance and use this for trading (if you are desperate). Through conventional financing circles it would be difficult to obtain unsecured finance for trading purposes........ mind you through the low doc loan debacle anything was probably possible.
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