I have a friend that is a trader like me, we talk about trading very well, but he told me something shocking today which let me think that trading is gambling for some people.
He is having business and earning almost $1000 monthly, he borrowed $1500 and he will pay $1800. He borrowed it to trade and lost everything within 3 days.
Also I noticed that he is addicted to trading but he said he is not. He told me that he will not make such a mistake again, but he wants to further learning more about trading.
I have advised him. He likes using stop loss and other things that he can use not to lose, but he still lost money anyway until he lost all the money.
When he wanted to borrow, the did not tell me, I would have advised him not to borrow the money.
Honestly, I'm quite puzzled as to why people are willing to borrow money just to start trading. It's clear that it's incredibly risky, and there's no guarantee of anything in trading. So,, after what happened to your friend, I think to make him realize it, you need to have a more in-depth, one-on-one conversation with him.
But that certainly won't guarantee he'll stop doing it. Basically,, if it's like that, you, as his friend, can't do anything. The only one who can stop him from borrowing money for trading is himself, not anyone else. So, this should be a lesson for us, because in the realm of trading, everything must be carefully calculated, especially capital.
Basically, if we use hot capital or borrowed money, psychologically, it will make us unable to control our emotions when trading. Therefore, the potential for loss is clearly very large in such a situation. Therefore, we shouldn't rely on trading as a source of income. Rather, we should only use trading as a pastime, when we have spare cash. Even then, I think it's better not to do it at all.
