Can you borrow money from the bank to trade forex?

Dec 30, 2011 at 11:12
9,368 Angesehen
89 Replies
Mitglied seit Dec 23, 2011   34 Posts
Dec 30, 2011 at 11:12
Heheheheh, wondering if anyone have that heart, cos the interested rates may put the pressure on u, seen bank with 25% interest rate everymonth, it will take a trader that have balls to take such loan.😁

So have u ever done that?
Manage Your Risk
TheCyclist
forex_trader_28881
Mitglied seit Feb 07, 2011   724 Posts
Dec 30, 2011 at 12:57
Called a credit card.

I very, very strongly suggest you don't go down that road....remember the trading itself is already at anything from 50:1 to 500:1- that's a loan you signed for already, and you want to borrow more....?
Mitglied seit Nov 15, 2011   61 Posts
Dec 30, 2011 at 13:02
Yes, please don't loan money to trade...even if you think you've got the best system in the world...what if war breaks out or something else crazy happens and you lose it all? How will you pay back the loan?
When you fall you learn, then you get up and you try again until you master it.
Mitglied seit Nov 02, 2011   57 Posts
Dec 30, 2011 at 13:27
I can't believe you would even ask a question like that!! NO, nada, Never borrow.
 If you want. Figure out what your monthly payment would be and make that payment to YOURSELF, put in a special savings or CD, money market account, until you have the amount you would have borrowed saved, and then trade and only then,

Ken--TheForexFox
Trade the plan that works for you!!
Mitglied seit Nov 27, 2010   244 Posts
Dec 30, 2011 at 17:42
25% per month interest sounds more like a loan shark.

The bank is likely offering 25% per annum overdraft, and works out to 1.876% per month.

It's better to obtain a business loan at 6-7% or property loan at 2-3%, per annum.

Treat it like a business and it all boils down to numbers, provided you are consistent with your returns.
E.g. If you obtain a property loan at 2% per annum, and you are yielding 3% per month (42.58% per annum) from your business. That's a profit of 40.58%.

The problem I see is that most people aren't consistent, and while they look for 400-1000% gains per annum, they have to bet the farm each time they trade and hence incur the chance of losing it all.

Trading already involves more risk than most businesses, there's no reason why you can't do it from credit but do your sums. And be consistent.
Consistency above all.
Splexin
forex_trader_33781
Mitglied seit Apr 11, 2011   202 Posts
Dec 30, 2011 at 21:55 (bearbeitet Dec 30, 2011 at 21:56)
There is/was a Russian gentleman here that obtained a $25000 line of credit, put it into his Forex account, and paid it all back within a month (Myfxbook verified too). Obviously not everyone is successful or consistent enough to do that. He was incredibly disciplined at money management...never over-leveraged and if I'm not mistaken only risked about 1% per trade.

CDs and savings accounts are almost pointless nowadays...I earn more interest in my Forex account. 😁

Other than a credit card I've never borrowed money for anything....car, house, nothing....always saved up cash then purchased. So the ONLY reason I would ever get a loan would be to actually invest the money. Forex is a business like any other, so what makes getting a loan any different than getting a loan to start any other business? It's the same. Risks are present in both cases.

Raiden is right-- it would not be difficult to make money with a loan, but since most people try to gain absurd numbers they would end up blowing the account, losing their sanity, etc etc.
Mitglied seit Dec 01, 2011   95 Posts
Dec 30, 2011 at 22:02
Yes & No!

It's a lot better then taking out a second mortgage on your house 'never do it! or dipping into your 401k savings or kids college tuition. if you take out a bank loan, the worse that will happen is you will have bad credit for the next 7 years 'if your in america' but if you have to borrow money to trade , then 'no' you should not be trading...

The Lesser of to Evils....
Mitglied seit Dec 01, 2011   95 Posts
Dec 30, 2011 at 22:02
One more thing, there is 1 exception. to the above logic.

Yes, i would take out the biggest bank loan, max out your credit cards Mortgage the house for 110% or whatever you can squeeze out of it and bet the farm.

IF! you are terminally ill and was about to die from some horrible incurable disease or your on the FBI Most wanted list and already looking at a life sentence or death row. then you have nothing to lose....

Crank up the leverage to 500:1 and Go Big...
Mitglied seit Dec 23, 2011   34 Posts
Dec 31, 2011 at 05:09

   Fxringleader posted:
   One more thing, there is 1 exception. to the above logic.

Yes, i would take out the biggest bank loan, max out your credit cards Mortgage the house for 110% or whatever you can squeeze out of it and bet the farm.

IF! you are terminally ill and was about to die from some horrible incurable disease or your on the FBI Most wanted list and already looking at a life sentence or death row. then you have nothing to lose....

Crank up the leverage to 500:1 and Go Big...

This reply cracked me up 😀
Manage Your Risk
Mitglied seit Nov 27, 2010   244 Posts
Dec 31, 2011 at 07:37
Haha... another way would be to borrow till you are too big to fail. People will bankrupt you for a $10mil loan but if you owe them $500mil, they will constantly seek to restructure the loan as they can't write it off as easily.
Consistency above all.
walker36
forex_trader_36599
Mitglied seit May 13, 2011   1341 Posts
Dec 31, 2011 at 09:20
FX is a scientific gamble. so basicly you are asking to gamble with borrowed money. if this sounds good to you dont wait. me? I wouldnt!!
Mitglied seit Jul 29, 2011   13 Posts
Dec 31, 2011 at 09:24
Creditcard 😇
Systematic
Mitglied seit Sep 03, 2011   13 Posts
Dec 31, 2011 at 16:23
Never borrow money to trade forex!!
Mitglied seit Sep 29, 2011   1 Posts
Jan 01, 2012 at 10:35
If you can take a personal loan with an interest rate of 4% / annum, would you still do it?

I.e. taking a USD 30,000 personal loan at 4% / annum, and repay in within 36 months, you would pay USD 1,200 on interest on a yearly basis or USD 3,600 for the whole term.

It's still lower than credit card interest, and if you're a trader worth your salt, you should be able to at least at a minimum earn 10% equity growth on a monthly basis.

Just saying.

Splexin
forex_trader_33781
Mitglied seit Apr 11, 2011   202 Posts
Jan 01, 2012 at 10:56

   rafiqhidayat posted:
   If you can take a personal loan with an interest rate of 4% / annum, would you still do it?

I.e. taking a USD 30,000 personal loan at 4% / annum, and repay in within 36 months, you would pay USD 1,200 on interest on a yearly basis or USD 3,600 for the whole term.

It's still lower than credit card interest, and if you're a trader worth your salt, you should be able to at least at a minimum earn 10% equity growth on a monthly basis.

Just saying.


Fear has a unique way of keeping people from succeeding.

Only reason I use my credit card is for the reward points 😁 I've never paid a dime in interest because I've learned the tricks of the billing cycle.

As for the loan I would totally do it, only because I know in less than 3 years I could crank out a net of 17-22 good trades ('good' = 100 pip winners to me)....the number necessary to pay it back in full (differs according to individuals MM). I currently net an average 100-200 pips per week, and that's checking charts for 5 minutes a day (or sometimes none at all). If I sat in front of the charts for 12 hours I could probably bag 80-100 per day.

Maybe the concept doesn't make sense to some but people mortgage their house for 30 years when there's no guarantee the value will go up......or make payments with interest on a vehicle that's guaranteed to go down in value.....none of that makes sense either......
Mitglied seit Sep 03, 2011   13 Posts
Jan 01, 2012 at 21:48
i said not to borrow money because some people believes they can do it but they haven't even succeed in the demo. You can borrow money if you have succeeded in making money with a track record of at least a year. I believe 99% of people will fail in trading.

Hence, generally people should not borrow money to trade because you must take into account the risk you are taking. What if you lose it all? Will losing this borrowed money jeopardise your life?

Regards.
Mitglied seit Nov 14, 2011   27 Posts
Jan 03, 2012 at 01:27
Pretty agree with s1quash :)
Help each others and make it stronger =)
Mitglied seit Jan 17, 2012   4 Posts
Jan 17, 2012 at 12:39

   Orientalgeneral posted:
   Heheheheh, wondering if anyone have that heart, cos the interested rates may put the pressure on u, seen bank with 25% interest rate everymonth, it will take a trader that have balls to take such loan.😁

So have u ever done that?

It not a problem for professionals
Mitglied seit Oct 20, 2018   300 Posts
Jan 30, 2022 at 16:55
Borrow money to trade? That`s the worst idea i`ve ever heard.
momchil_slavov@
Mitglied seit Aug 05, 2021   401 Posts
Feb 02, 2022 at 18:13
I wouldn't ever borrow money to trade. You already have to pay that money back with interest (which is usually quite high), and if you lose it then you're basically paying back double the money plus interest. If you only trade what you can afford to lose, at least you don't owe if you lose it all. I'd rather trade with a smaller amount of capital than to take that chance.
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