Taking loan to trade is a risky task - page 6.

slaman29

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Quote from: Slow death on September 26, 2021, 07:13:23 PM

The biggest problem in trading with borrowed money is the pressure that the person is under to return the money within the agreed period and this forces the person to have to trade with greater risk in order to have a higher return to meet the loan repayment term. as we know there are days when trading profits are low but when you have a loan to pay the person will have to be forced to have high profits even on days when you had low profits because there is a deadline that you must meet to pay the loan

I always think borrowed money should only be in necessity. To study, to live, to get a house, etc, backed by something stable so you know you can always service the loan.

The real problem isn't the borrowed money used in investment and trading, but the individual belief that crypto has a low risk and a high chance to earn more to pay it all back (plus interest).

tygeade

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Yes you are right, borrowing money to trade when you are not sure of the outcome of the trading is very risky. If you’re going to be trading you need your own money to do that, because in a situation whereby you lose that money you will have to start looking for a means to raise the money again and pay back to the person who you borrowed it from.

But when it is your own money, you wouldn't have to worry about that. A borrowed money has a time when you are meant to pay it back, and you have to be worried to make up that payment before the time comes. So, trading with a borrowed money is a huge risk, and it should be avoided.

Rafae

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Perhaps it makes sense to take out a loan when you already have some experience and real income, but at the initial stage, in my opinion, this is unreasonable.

Aurorra

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Loan transactions are indeed very risky. Although cryptocurrency is profitable, the more money you invest when the price rises, the more profit you get. But when the price drops, you have to bear more economic losses. So don't choose loan transactions, and trade within the range of funds you can afford.

Tashana

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Yes, it is undoubtedly a very good channel to make money when the trend is rising, but when the trend is not obvious, it is very likely to lose your principal.

markdario112616

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Im quite unsure on this, Isn't this a huge risk not only for the one lending but also for the lender? Let's say, Tne lender is just a mere person or a friend or a family. Without a security this could be something that can break them a part. But why loan just to trade? Why not trade alone using your savings? I mean, I get a lot are not capable to do that but still this isnt advisable. It's like you gamble away, which is the one we are trying to point out. Trading isn't supposed to be a some sort of gambling. It should be considered as Investment.

Rruchi man

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Quote from: Rockstarguy on September 22, 2021, 04:24:04 PM

The joy in trading is when the money which is been used to trade is owned by the trader.

If you call yourself a good trader, and it so happens that you have no money to trade, what i think of you is that you are

- Just a fresh out Demo trader that thinks he has mastered demo trading and he is super confident that with a few bucks, he can can start making money, so he just looks for any means possible to get the money to start trading, or

- A trader who is not good enough. It may be possible that you have lost all your money maybe to a bad trade or something, but that's not excuse enough, because a good trader understands risk management.

I understand that there may be some extreme cases where maybe a domestic crisis or emergency may push you to liquidate your accounts to raise cash, when bouncing back from such situations, an experienced and good trader knows that even considering to borrow to start trading is stupidity in disguise.

TelolettOm

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Of course. taking a loan is very risky moreover if we are willing to invest in the crypto or trade this crypto. The interest of loans will be always continuing due to time and we cannot get guarantee whether our investment will earn more and more money or not. If the codnitionof the market is opposite with what our epxectation, the market goes dropped and dropped, what we will do to pay the loan and its interests? Even it is only by step on step payment monthly, it will be very risksy.
Many people panic about this situation and the taking loan to invest in Bitcoin when the price is at that ATH or when it was skyrocketing But after investing, the price goes down like right now happening in the crypto market currently.

Slow death

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The biggest problem in trading with borrowed money is the pressure that the person is under to return the money within the agreed period and this forces the person to have to trade with greater risk in order to have a higher return to meet the loan repayment term. as we know there are days when trading profits are low but when you have a loan to pay the person will have to be forced to have high profits even on days when you had low profits because there is a deadline that you must meet to pay the loan

Hippocrypto

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Quote from: Rockstarguy on September 22, 2021, 04:24:04 PM

The joy in trading is when the money which is been used to trade is owned by the trader. Normally trading is something that is unpredictable, one can't really know or see the outcome if it will be a big loss, small loss or big win, small win. When money that is been used for trading is owned by the trader if there should be loss he may not too feel about the loss, unlike when the money which was been used for trading is borrowed, in a case whereby the person do not have good source of income.

I know someone who started how to trade about four months ago. He is a beginner in trading, I don't really know how good he is, but to him he may feel he can always make earnings. I think he was so confident in himself, he had to borrow money for trading which he could not make good profit. As a beginner borrowing money to trade is not the best. It is not even advisable to use all the money one has to trade or invest talk much of to borrow to trade.

Indeed, most of us thought that it wasn't best for us to take a loan but that's what's going on with other traders and investors. They'll always making trading almost like that, taking loans without thinking negative behind. Some newbies don't matter as long as they would get profit out of risk. On my personal perspectives, we may get profit but we don't have an assurance for when it would come to us. Banking loans couldn't wait that because we're going to have a monthly amortization which needed to be complied.

Scripture

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Quote from: crzy on September 26, 2021, 05:33:29 PM

Quote from: Ultegra134 on September 26, 2021, 01:39:34 AM

I would never trade or gamble with money that isn't solely mine. Shit happens and then you'll be unable to pay back the loan, if you don't have your own money, it's best not to trade at all. Trading is extremely risky itself, but doing it with borrowed money takes it to another level of risk.

You'll eventually lose a trade or two, you'll get greedy and who knows what your next moves might be.

Professional traders are doing this but its really not advisable because of the risk in this market and if you can’t really afford to pay that loan better not to try at all and just use your own money to start in this market no matter small or big it is. Borrowing money is a sign of being greed, and without the knowledge you can lose it.

Not just the professional traders, there's a lot of newbies who are taking loans just to start their trading journey and guess what, most of them failed to repay their loans and they are not being hunt by the banks. There's a lot of downside if you start trading thru your borrowed capital and the risk is very high for that so this is not an advisable strategy, you can actually start by just $100 and then make it grow on your own which is more better than to borrow money.

crzy

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Quote from: Ultegra134 on September 26, 2021, 01:39:34 AM

I would never trade or gamble with money that isn't solely mine. Shit happens and then you'll be unable to pay back the loan, if you don't have your own money, it's best not to trade at all. Trading is extremely risky itself, but doing it with borrowed money takes it to another level of risk.

You'll eventually lose a trade or two, you'll get greedy and who knows what your next moves might be.

Professional traders are doing this but its really not advisable because of the risk in this market and if you can’t really afford to pay that loan better not to try at all and just use your own money to start in this market no matter small or big it is. Borrowing money is a sign of being greed, and without the knowledge you can lose it.

tvplus006

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Quote from: Tumanggor on September 25, 2021, 04:18:27 PM

Borrowing money for trading is risky because the money you borrow can't necessarily be returned
the desire to win is very big when you borrow money to gamble as a result the opposite happens, you actually lose and may lose capital

it is not recommended to taking a loan to trade but if you are a professional in trading and have a good track record then it is a good move if you taking loan to trading

If you are a professional in trading, then you should already have a decent deposit that will allow you to do without credit funds from the bank. Most often, beginners who do not have a deposit and want to solve this problem at the expense of borrowed funds think about getting a loan. But beginners need to think first of all about gaining knowledge, and not about loans, which they will definitely lose without knowledge.

jostorres

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Quote from: Rockstarguy on September 22, 2021, 04:24:04 PM

I know someone who started how to trade about four months ago. He is a beginner in trading, I don't really know how good he is, but to him he may feel he can always make earnings. I think he was so confident in himself, he had to borrow money for trading which he could not make good profit. As a beginner borrowing money to trade is not the best. It is not even advisable to use all the money one has to trade or invest talk much of to borrow to trade.

Do not listen to anyone who doesn't understand how loans work. If you end up getting a loan and buy bitcoin with it and assume that the increases would allow you to not only make money but also allow you to pay your loan back, then you are an idiot. However loans are out there to improve your finances, is there a method you can get a loan, use it on crypto, and improve your finances? That means you should take it.

Coinbase took out loans in sizes of whole neighborhoods real estate value, did they fail? They did not bankrupt right? Well, not so far. Look at Wall Street, there are banks that got billions, the whole loan was 800 billion I believe, and they get cash injections in billions every day. Just know why you are getting a loan, if it is a stupid reason then don't get it, if you can justify it then you should get it, that is how the loan world works.

otundebis

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I think it is general opinion that you don't borrow to trade, however, defi investment in Cryptocurrency market have changed all that. Actually, you can borrow to trade, to short, to buy various type of option and many other financial instruments in defi! Borrowing has become a tool for making money in Cryptocurrency and there are still many innovation coming up with borrowing!

Eureka_07

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Quote from: Rockstarguy on September 22, 2021, 04:24:04 PM

The joy in trading is when the money which is been used to trade is owned by the trader. Normally trading is something that is unpredictable, one can't really know or see the outcome if it will be a big loss, small loss or big win, small win. When money that is been used for trading is owned by the trader if there should be loss he may not too feel about the loss, unlike when the money which was been used for trading is borrowed, in a case whereby the person do not have good source of income.

I know someone who started how to trade about four months ago. He is a beginner in trading, I don't really know how good he is, but to him he may feel he can always make earnings. I think he was so confident in himself, he had to borrow money for trading which he could not make good profit. As a beginner borrowing money to trade is not the best. It is not even advisable to use all the money one has to trade or invest talk much of to borrow to trade.

Yep it isn't the best Ideal, specially if it has high interest rate. Honestly recently I thought of borrowing quite large money so we can invest it to blockchain games that we know. We thought about loaning since we are too positive that the price of the token that we could gather will just take over our total loan. Now, the price of the token is in dip. Luckily the loan was rejected since the requested loan amount is just too high and that was just my first loan request.

Hobo66

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There are so many fluctuations in trading. There is no guarantee whether there will be loss or gain. If you take a loan for trading, and you don't have much knowledge about trading, then you can lose all the money. Taking loan for trading is very risky. Because you don't even know that you will get benefit as a result of this money in trading or loss that money too.

lovemycar

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It's not just a risky task, it's more like a fool. Don't underestimate the harvesting ability of the market. Whether you are buying up or down, this is an extremely irrational behavior. Unless you are desperate, ready to meet God at any time.

Ultegra134

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I would never trade or gamble with money that isn't solely mine. Shit happens and then you'll be unable to pay back the loan, if you don't have your own money, it's best not to trade at all. Trading is extremely risky itself, but doing it with borrowed money takes it to another level of risk.

You'll eventually lose a trade or two, you'll get greedy and who knows what your next moves might be.

Theones

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Well its nothing more then a stupidity to borrow money for trading (day trading or short term trading). Trading is no more different then gambling, when you win you win big and vice versa. Even if you have your own money, its advisable not to invest whole amount in day trading rather put majority in Long term investment.
Remember there are majority of traders that end up in loss. Why do more than 80% of traders lose money?

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