Can't believe im considering this

[Nowler]

I have heard of people taking out loans to trade, and I immediately think "bad idea".

I now find myself STRONGLY considering taking out a loan of 15k to invest... (no leverage).

I was filling out the application and the voice in my head was playing thoughts over and over. The thoughts I've had everytime I saw someone post that they took out a loan to trade.

I am super bullish on a sector, and I am throwing as much money as I can at it each month.

I wish I had loads more to throw at it! Which is where this notion came in...

The loan i have applied for has monthly payments less than the amount I invest each month, and the loan only costs me £1.5k when its all paid off in 80 months.

Am I being an idiot here or what!?! Lol
I feel like ill be a fool if I don't do it.... the fundamentals are THAT strong

 

[J Livermore]

I have heard of people taking out loans to trade, and I immediately think "bad idea".

I now find myself STRONGLY considering taking out a loan of 15k to invest... (no leverage).

I was filling out the application and the voice in my head was playing thoughts over and over. The thoughts I've had everytime I saw someone post that they took out a loan to trade.

I am super bullish on a sector, and I am throwing as much money as I can at it each month.

I wish I had loads more to throw at it! Which is where this notion came in...

The loan i have applied for has monthly payments less than the amount I invest each month, and the loan only costs me £1.5k when its all paid off in 80 months.

Am I being an idiot here or what!?! Lol
I feel like ill be a fool if I don't do it.... the fundamentals are THAT strong

Nowler,

If it’s leverage or buying power you are interested in why not consider using options instead?

As long as you don’t short options your risk is limited to the premium you pay. Considering that you can use an unlimited number of strategies using multiple options (usually referred to as spreads) you can come up with just about any strategy under the sun.

One book I read years ago called options tinker toys because of all the possible combinations that can be created.

BTW, I’ve been having computer problems this past month or so, so if I disappear again you’ll know that happened.

 

[Nowler]

Nowler,

If it’s leverage or buying power you are interested in why not consider using options instead?

As long as you don’t short options your risk is limited to the premium you pay. Considering that you can use an unlimited number of strategies using multiple options (usually referred to as spreads) you can come up with just about any strategy under the sun.

One book I read years ago called options tinker toys because of all the possible combinations that can be created.

BTW, I’ve been having computer problems this past month or so, so if I disappear again you’ll know that happened.

Hey mate.

I don't know enough about options but from what I do know, time is a factor with em.
I have no interest in trying to finely time anything, so having time as a risk is not attractive to me.

I just need capital and don't want to deal with the additional risks that come with margin etc.

The way I am looking at this is I would happily put 80 months of payments into this sector at these prices. Only problem is the market will be at the top or on its way back down in 80 months.

Getting the loan is like borrowing from future Nowler, plus a small 1.5k fee for time travel expenses.

 

[timsk]

Am I being an idiot here or what!?! Lol
I feel like ill be a fool if I don't do it.... the fundamentals are THAT strong

Hi Nowler,
Consider the worst case scenario - the VERY worst case scenario: the sector you're bullish on tanks. And tanks. And tanks. You're forced out of all your postions for maximum loss and you still have the loan AND the interest to repay. Assume this will happen; to dismiss it as being impossible or to think that it couldn't happen is where traders and investors get caught out. If you're prepared to take that risk, then maybe it's worth considering. If you're not, then walk away from the idea knowing that you've done the right thing.
Tim.

 

[postman]

I have heard of people taking out loans to trade, and I immediately think "bad idea".

I now find myself STRONGLY considering taking out a loan of 15k to invest... (no leverage).

I was filling out the application and the voice in my head was playing thoughts over and over. The thoughts I've had everytime I saw someone post that they took out a loan to trade.

I am super bullish on a sector, and I am throwing as much money as I can at it each month.

I wish I had loads more to throw at it! Which is where this notion came in...

The loan i have applied for has monthly payments less than the amount I invest each month, and the loan only costs me £1.5k when its all paid off in 80 months.

Am I being an idiot here or what!?! Lol
I feel like ill be a fool if I don't do it.... the fundamentals are THAT strong

You've been posting here for over 3 years! If you haven't been able to make £15,000 profit in that timeframe then trading is not for you. This is a very bad idea!
Your loan payment would be £206 you joined 3 years 6 months ago. If you had simply saved that amount of money over that time period you would have £8,660.

 

[Nowler]

Hi Nowler,
Consider the worst case scenario - the VERY worst case scenario: the sector you're bullish on tanks. And tanks. And tanks. You're forced out of all your postions for maximum loss and you still have the loan AND the interest to repay. Assume this will happen; to dismiss it as being impossible or to think that it couldn't happen is where traders and investors get caught out. If you're prepared to take that risk, then maybe it's worth considering. If you're not, then walk away from the idea knowing that you've done the right thing.
Tim.

Yep, i've been considering the worst case scenario. It would suck if it happened, but would not leave me homeless.
It's definitely a risk, but it's an asymmetrical one. Far more upside than downside.

I wont rush into it, but definitely considering it.

 

[Nowler]

You've been posting here for over 3 years! If you haven't been able to make £15,000 profit in that timeframe then trading is not for you. This is a very bad idea!
Your loan payment would be £206 you joined 3 years 6 months ago. If you had simply saved that amount of money over that time period you would have £8,660.

It potentially is a bad idea... or a great idea, albeit risky.
It's good to get the cons side of the coin though.

I moved country 3 years ago, so had some costs.
Plus I wasn't saving as much as I should have.
I refused to deposit any more into my trading account until I made back the money I lost in 2017 - I only started depositing into my trading account again in March 2020 - prior to that my account size was £30?

In 12 months I now have £7,000.

I'm not dismissing you. It was your kind of comment that I was looking for.
I wanted to see if hearing it would make me decide that it was a bad idea.

 

[new_trader]

Apart from property, I would only consider it if I was expecting a minimum total return of 5x

 

[Nowler]

Apart from property, I would only consider it if I was expecting a minimum total return of 5x

Oh I do!!
Some a little less, some a little more.

Possible some will gain a lot more, but just sticking with 5x, I would be very pleased

 

[Nowler]

All decided..
They jacked up the interest rates on the loan 10x.

Lol, won't be going ahead with this idea then

 

[LuckyMac]

All decided..
They jacked up the interest rates on the loan 10x.

Lol, won't be going ahead with this idea then

Lol probably best tbh. I think trading accounts are best when grown organically. I had toyed with the idea too but so many experienced traders warned me off. Best of luck anyway

 

[hatemypips]

If there is no leverage and interest rate is low I think it is safe option because returns are great especially in crypto market.

 

[Nowler]

If there is no leverage and interest rate is low I think it is safe option because returns are great especially in crypto market.

~ SIREN! ~ ~ SIREN! ~ ~ SIREN! ~

Now that's a terrible idea!
Crypto has no fundamentals on its side.
It's merely running on the fumes of the greater fool theory - which is fine as long as speculators realise that.

What I was talking about was a sector that has unbelievably strong fundamentals, with a when-not-if situation.

 

[Nowler]

For the record, 2 months after my last post here I got hold of £8k to follow through.

 

[sharabela]

I personally do not like the idea of taking loan and trade in it. There is a saying do not invest money that you cannot afford to lose. If you had enough money, you would not have to take loan. It means you are going to have more pressure while trading. I would recommend that you take more time to invest in live trading. Meanwhile, trade on demo account and find a solid strategy that gets you consistent profit.

 

[Farm Yard Forex]

All decided..

They jacked up the interest rates on the loan 10x.

Lol, won't be going ahead with this idea then

Probably worked out for the best in the end. How has the invstment gone with the £8k you managed to acquire?

 

[Nowler]

All decided..

Probably worked out for the best in the end. How has the invstment gone with the £8k you managed to acquire?

It's going decent so far.
Already up something like 3k.

It's difficult to say exactly as it was added across 4 accounts which already had money in it.

 

[Nowler]

I personally do not like the idea of taking loan and trade in it. There is a saying do not invest money that you cannot afford to lose. If you had enough money, you would not have to take loan. It means you are going to have more pressure while trading. I would recommend that you take more time to invest in live trading. Meanwhile, trade on demo account and find a solid strategy that gets you consistent profit.

I tend to agree with not getting a loan.
In fact, there's only been 1 time where I thought it was a good idea, and that's this time (usually it's a terrible idea).

Even then I tried hard to find valid reasons not to do it, which I couldn't as I can certainly afford to lose it and I don't feel any pressure.
I am not trading it FYI - I invested it in a very early stage contrarian play.

I even waited a few months to really think it over and it cost me! I regret waiting the extra time I took... I knew it was the right thing to do and I didn't listen to myself.