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

  • #41
  • Feb 13, 2015 10:32am Feb 13, 2015 10:32am
Yes, i have considered OPM, Pamm Account.
The problem is that people didn't trust the same trader over the long term.
I try to explain: When your equity curve increases, all "investors" put their money on that trader.
But when the traders have the drawdown, the "investors" criticize the trader, take away their money and they try another trader.
They didn't considered that the drawdowns are normal, and there are periods with small profit, but investors cannot understanding this, then take away their money and when they see that the equity curve returns to rise then restore back the money on the same trader.
Doing this didn't increase their income and create problem to trader.
Among other things investors look for traders with 1000% monthly profit or annual profit.
  • #42
  • Feb 13, 2015 1:14pm Feb 13, 2015 1:14pm
Well the bank doesn't have to know its for trading ... better to gamble with someone else's money .
  • #43
  • Feb 14, 2015 1:57am Feb 14, 2015 1:57am
Quoting FerruFx
2 points : 1/ You are consistently profitable in your trading : undercapitalization isn't a problem as your account will increase 2/ You aren't yet profitable : the loan will be lost So keep away from borrowing money for trading ...
What if you are undercapitalized and not consistent in profits but you feel with more capital you could improve the profits?
  • #44
  • Feb 14, 2015 2:10am Feb 14, 2015 2:10am
  •  FerruFx
  • Joined May 2007 | Status: MT4/MT5 EAs/Indicators/Alerts coder | 6,542 Posts | Online Now
Quoting jing
{quote} What if you are undercapitalized and not consistent in profits but you feel with more capital you could improve the profits?
What makes you a profitable trader isn't your capital but your skills ...
MT4/MT5 EAs/Indicators/Alerts coder
  • #45
  • Feb 23, 2015 9:01am Feb 23, 2015 9:01am
Quoting FerruFx
2 points : 1/ You are consistently profitable in your trading : undercapitalization isn't a problem as your account will increase 2/ You aren't yet profitable : the loan will be lost So keep away from borrowing money for trading ...
There's a third option that if you are actually a profitable trader but the broker scammed you or bankrupted (such as Alpari UK) so you've lost your capital and profits , in this case getting a lone makes sense
  • #46
  • Feb 24, 2015 3:03am Feb 24, 2015 3:03am
.....I am going to read the rest of this thread (I know it is only young....) a bit later.

Back in the 90s I made the mistake of telling the bank that I wanted the money for 'leveraged investment'. There ensued a to-ing and fro-ing in despatches and conversations, and what in hindsight were some dumb-ass questions asked of me by people whom I expected to know what they were talking about; ...and to be frank my naivety at the time was to have ever mentioned the word 'leveraged'.

Finally I said, "you would lend me money to take a holiday, why will you not lend to me for something which should have at least some residual value if it all goes wrong; if you don't make your mind up in the next few days the opportunity will pass and I will not want to take the loan".

That was the Argentinian currency crisis, and I was getting into banking stocks. The local manager eventually Ok'd the deal, fortunately not too late, and I made about 80% over the next 6 months.
Carbon-Dioxide: the gas of life! https://youtu.be/ttJBdr6eBuo
  • #47
  • Feb 24, 2015 3:20am Feb 24, 2015 3:20am
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)
Carbon-Dioxide: the gas of life! https://youtu.be/ttJBdr6eBuo
  • #48
  • Feb 24, 2015 3:31am Feb 24, 2015 3:31am
Quoting lucacol
One of the most common mistakes of those who start trading is to do it with small capital (undercapitalized trader)
Many people who started out forex trading do not realized that it is difficult to be profitable trading a small account. I'm not saying that a sufficiently funded account will make you profitable but I think it is a prerequisite to be profitable.

You don't need a huge account to be profitable but you need an amount to allow you to use certain strategies which is not possible if the account is small.
  • #49
  • Feb 24, 2015 4:22am Feb 24, 2015 4:22am
have you heard about good debt and bad debt?
if you smart enough you can make money from it
  • #50
  • Feb 24, 2015 4:32am Feb 24, 2015 4:32am
hi,
just use broker margin, not a need to get money loan.
it can put you in financial difficulty.
  • #51
  • Feb 25, 2015 2:49am Feb 25, 2015 2:49am
I do not recommend borrowing to fund an FX trading account. In fact, I positively advise against it. If you are a proficient trader then possibly you could make a case for borrowing, but if you are a proficient FX trader then you do not need to borrow.

Twice I have borrowed for stock market investing. Twice I have benefited enormously from doing that. FX trading gives you a leveraged account, there is no need to borrow.
Carbon-Dioxide: the gas of life! https://youtu.be/ttJBdr6eBuo
  • #52
  • Feb 25, 2015 5:05am Feb 25, 2015 5:05am
Quoting Shug
I think it is better for beginners to trade with larger sums, but i could see why people would disagree. When i first started trading with live money it went a little like this. - Load up $500 - Blow $250 (50%) Thought process, 'its only 250, reload' OR -Load $500 -Double it Though process - "I doubled my account, let's trade bigger....Trippe lot size, lose that trade and now im back at $250 -$500 Repeated those mistakes many times. First larger account size was about $15K If i was down in even a few percent in equity, that's $500+. Thought process...Shit...

This is a natural process how trader get the knowledge on money management, burning his fingers several times.
I just reinvested half of profit in trading and never left less than"half" in my hotforex account of my monthly value. Simple but quite efficient money management rule
  • #53
  • Feb 25, 2015 6:07am Feb 25, 2015 6:07am
Quoting Exodus
I do not recommend borrowing to fund an FX trading account. In fact, I positively advise against it. If you are a proficient trader then possibly you could make a case for borrowing, but if you are a proficient FX trader then you do not need to borrow. Twice I have borrowed for stock market investing. Twice I have benefited enormously from doing that. FX trading gives you a leveraged account, there is no need to borrow.
I completely agree with you

A bank loan to investing in stocks is much better than a loan that speculating in forex (or in other markets including stocks)
  • #54
  • Feb 25, 2015 6:12am Feb 25, 2015 6:12am
For trading loan is a foolish game .... atleast for me ....

I dont appreciate taking loan for trading ..... ....
Re-Incarnated
  • #55
  • Feb 25, 2015 6:48am Feb 25, 2015 6:48am
i ever think that, and it may works
in bull market (one way trading), with 1:1 leverage, which means a margin call = a country goes bankrupt.
no stop loss
averaging your loss
.
basically, it is like.... get a saving in different currency. .. with negative interest rate.
normally a currency pair can move about 0,1 - 1% a day and it is enough to beat the interest

*conditions and terms may apply*

and why i didn't do that? because if i fail to control my self just in a few click , it is debt collector who come to my house.
i ever try that with no loan and it works,
but please imagine, in aud usd 0.7800 - for every cent a pip, i need $78+margin to back it up, and even if the trend is down, i can't sell- only close
this pure money management, no expert skill required. + boring as hell
  • #56
  • Mar 10, 2017 5:32pm Mar 10, 2017 5:32pm
This is not necessarily a bad idea but only given that you have demo tested your trading methods to the nth degree so that you're confident to the nth degree. For me, this means a minimum of 3 months of (active) trading each and every day with consistent and consecutive daily profits; anything less, would not be worth in a live environment which would cause me to lose saved money or even worse, lose loan money.

Also, undercapitalization is a problem. My guess is, several systems on ForexFactory would survive an unforeseen market event to come out profitable if that system had access to sufficient capital in order to deal with that caused drawdown. If I'm ever ready to trade live, I will use an x amount from my savings and, only as a cushion, I will borrow enough from my credit card just to double that capital in order to provide more breathing room for unforeseen market events but again, I would only take this gamble in the event that I have continuous daily positive results for a minimum of 3 months (60 days of consistently consecutive daily positive results and nothing less).

Despite any preparation, unforeseen events do happen with the markets to wipe you out completely so I always think of trading as a gamble and, taking a gamble is not necessarily a bad thing or a wrong thing for me given that based on everything that I know up to that point, I'm prepared to the nth degree and that gamble is determined to be worthwhile.
  • #57
  • Mar 16, 2017 11:32am Mar 16, 2017 11:32am
Getting a bank loan is maybe the worst way to kick of your FX career, if you take in consideration that in 90% of the cases traders do blow their first account up.
  • #58
  • Last Post: Mar 16, 2017 12:30pm Mar 16, 2017 12:30pm
Do not do it!

Prove you can trade with small stakes and then look for an investor based on your trading results, take a % of the profit.

It is has be said I did not do it that way and drove myself almost to bankrupty before I learned how to trade profitable, now it is all I do, and I do nicely
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