@Shanalotte i don't think taking a loan from a bank or institute is a good idea, rather a trader could use leverage offered by their brokers according to their trade. And moreover you are right, regular banks won't agree to give a person a loan for trading, because at the end of the day, it's a risky business.
I differ on that , the rate of interest on loans is way higher than the margin charged on the leverage. And today most traders use leverage and trade successfully. Leverage is dangerous only when a trader trades recklessly, if a trader is following all the principles of trading and has a proper risk management plan, I don't find any drawbacks in it.
I wouldn't recommend anyone take out a loan to trade, or to use leverage, but for the sake of this discussion if it has to be one or the other:
Leverage will get you to where you are headed, real quick!
So for the majority of people, that is to 0, or worse.
At least with a loan you go there slower and therefore have more time to think and react. With leverage, time becomes an enemy when your position moves sideways or against you. You get charged a premium for the luxury of being wrong or early.
Both can and generally are a bad idea - unless you are one of the exclusive club that can turn a consistent profit.
I don’t wanna be negative but I really wouldn’t advise getting a loan for trading. What if you lose money? Then you’ll be out the amount of the loan and will have to make more money just to pay it back with interest. I think you should only invest money that you have on hand that isn’t meant to be spent on bills or other important things. You can also open a trading account with $10 or so, so why not start small and work your way up? This is just my opinion though, if you do take out a loan then I wish you luck!
Can you please tell me in more detail how things are now? Have you managed to make a profit from trading? I am just start to trading in various platform. I am especially interested in cryptocurrency and coins.
You can go down the prop firm route for more capital but the risk is still relative. They have many rules such as maximum loss per day which is effectively the size bank you should be thinking you have and not the equity. If you can stick to the rules and keep the account running for a little while then it's a useful way to bump your capital up. But don't borrow money for things that aren't assets that will make you money. Since you can't guarantee that in trading, it makes no sense.
Hello!Good idea. At least there must be a way to support new market participants on they trading journey. Have you heard of BluFX? It is a broker that does exactly what you think. It is a broker that supports you financially just as they expose you to the forex markert. You are given a loan https://paydaysay.com/2000-loan-fast.php that you have to pay back, but you subscribe monthly for a funded account. All you do is pay a monthly fee the first time you want to subscribe and you are given a funded account to begin trading and for your next subscription, you can pay from your profits. It's that simple! The monthly fees depend on the account size you want, and believe it, the fees are fair. The smallest account size starts from $25k. Sounds good to be true? Go see your self! (BluFX)
New traders, on the whole, are losing traders. The majority of them lose badly and soon, and they are wiped out before they realize why. Any trader who has to borrow money because they're losing money on the market is approaching the situation incorrectly. Better trading, not more money, is the answer.