Trading With Borrowed Funds!!!

[Ayers]

I am also not in the favor of taking loans to try new stuff but if you are damn sure that you know something and that will work out for sure if you have capital then it's not the worst idea to take a loan.

During the pandemic a few years ago, I took a loan as well and it helped me stabilize and now I have already paid it because I had a clear plan of what I was going to do.

Yeah exactly, This is what I was trying to say. If you are certain that the outcome of your actions will be fruitful, only then you can put your loans for investment plan. Otherwise, what's the point?
People says that you need to make mistakes in life in order to learn from them. Well, that does not apply when you are dealing with someone else's fund. Proper knowledge and strategy will be the key to success in this business. Then again, why build more pressure while you are already in one.
Not everyone will become successful like you did. So maybe you can teach OP how he can make good use of it while we learn a bit of that too.

If you borrow money to do business outside, I will not object because as long as you have a clear idea and plan, making a profit is not too difficult, and we can also adjust our work accordingly best. But for trading, it is entirely different, even if you are a professional trader, are you sure you will win with the market? In trading, don't say 2 words for sure here.

@darewaller, You borrowed money during the pandemic, but you need to tell us what you used the money for, is it for trading? If that's true, then I think OP needs your advice, but if it's not trading, it's not good advice for OP.

Nothing comes without risk. Doing business also does not give you a 100/80% certainty that it will bring you profit what you have wished for. Take this year for example. The economy right now is very much messed up. What you could have achieved with the money you had, now you have to spend almost double. And each and every product or goods has it own seasonal value.
Doing business without the market's knowledge and not knowing when and where to sell which product can make your business fall too.
Like if you are doing food business, food is something that everyone need, thus it will always have a demand. But to know which food is needed when, is the key to success. And food gets rotten after storing it for long time. So there's that risk too.
Moral of the story is, you can't do anything and wish for success without having good knowledge about it. You can take risk with your own money but to do that with borrowed money makes it more difficult for the freedom of your work.

All are risky, even if you leave your money in the safe and do nothing, but the point is here, which one do you think is riskier? If you do traditional business outside, no matter how difficult it is, there is a way and enough time to find a way to fix it because your money will not disappear quickly in just 1 day or 1 hour. But if you use the same amount to trade crypto, you can make it disappear instantly.

That's why we call crypto investment a high risk investment. If the same level of risk while trading can yield higher returns, then I think people would not be stupid to open a business but just invest and trade crypto instead.

[tjtonmoy]

All are risky, even if you leave your money in the safe and do nothing, but the point is here, which one do you think is riskier? If you do traditional business outside, no matter how difficult it is, there is a way and enough time to find a way to fix it because your money will not disappear quickly in just 1 day or 1 hour. But if you use the same amount to trade crypto, you can make it disappear instantly.

That's why we call crypto investment a high risk investment. If the same level of risk while trading can yield higher returns, then I think people would not be stupid to open a business but just invest and trade crypto instead.

It is ideal to split your assets for different purpose. You never know and can't be 100% sure about anything. Just a hunch and analysis. In order to maintain a proper usage of your asset, you should always take precaution for every risk involved in any situation. Either it's the trading or business.
Keeping your words in mind, I think if we really think like that then we won't be here discussing trading, right?
No risk no gain which is what they say, but you need proper knowledge on how to maintain your risk managements. That's what people who are trading and making a good amount of money are doing so far.
It's like a knife on the hand of a chef could make food and on a hand of a psychopath could kill people.

[ven7net]

It is true that some people have become rich through crypto trading in the recent times. But considering the high risk involved in trading, do you think it's proper/wise to trade with borrowed funds as your capital irrespective of your trading experience?

It is difficult to say whether this is right or not, because it is difficult to predict the future result. For me personally, it is very important not to use borrowed funds, as this is a double risk. Firstly, in case of failure, you lose, as it were, yourself, and you will also have to return the borrower's funds, which can put you in a very difficult situation. The only way to play with leveraged funds is when you are confident in your winnings. In other cases, it is better not to use borrowed funds.

[RockBell]

Borrowing money to invest in bitcoin is not recommended because it is a risky investment that might cost you everything. Bitcoin is meant to be a long-term investment. I think you should think twice before doing so since you cannot forecast the price of bitcoin; it is usually preferable to utilize an investment fund that is set apart specifically for that purpose so that you can hold it easily. and don't end up selling everything at loss just to pay back a loan.

[stomachgrowls]

Borrowing money to invest in bitcoin is not recommended because it is a risky investment that might cost you everything. Bitcoin is meant to be a long-term investment. I think you should think twice before doing so since you cannot forecast the price of bitcoin; it is usually preferable to utilize an investment fund that is set apart specifically for that purpose so that you can hold it easily. and don't end up selling everything at loss just to pay back a loan.

If you could repay it without any problems or doesnt simply been relying on your Bitcoin or crypto investment then taking a loan would really be just fine but as much as possible then you should really be avoiding such

action to be taken because its not something recommended.Better to avoid as much as you could,invest on the amount which do came from your own pocket as possible.
You wont really be minding yourself or stressing yourself about repaying on something.Borrowed funds could give out that kind of stress and being worried because
you do need to pay something which would make you desperate.

[kawetsriyanto]

Borrowing money to invest in bitcoin is not recommended because it is a risky investment that might cost you everything. Bitcoin is meant to be a long-term investment. I think you should think twice before doing so since you cannot forecast the price of bitcoin; it is usually preferable to utilize an investment fund that is set apart specifically for that purpose so that you can hold it easily. and don't end up selling everything at loss just to pay back a loan.

Bitcoin investment is a high risk, not only risky.
That's why people always state that "only use the money that you afford to lose".
It is because no guarantee for profits and Bitcoin price is unpredictable. Although we know Bitcoin has 4 years cycle, no one knows if it will always repeat or not. Borrowing money for BTC investment just makes it riskier and makes you more stressed.

[mvdheuvel1983]

It is true that some people have become rich through crypto trading in the recent times. But considering the high risk involved in trading, do you think it's proper/wise to trade with borrowed funds as your capital irrespective of your trading experience?

It is easier to walk across the road with a blindfold and be at peace that you will not get knocked down than to trade with borrowed funds.
The repercussions are too great. Especially when your creditors come knock. Just avoid it totally.

[BinarySumo]

Taking a loan is a bad idea because it increases the potential for losses. If the trade does not go as planned and the trader is unable to cover the loan, they may be required to sell their assets or incur additional debt to pay back the loan. Moreover, this can lead to financial distress.

[EarnOnVictor]

It is true that some people have become rich through crypto trading in the recent times. But considering the high risk involved in trading, do you think it's proper/wise to trade with borrowed funds as your capital irrespective of your trading experience?

I will always say that Bitcoin is a project that was underrated but became a big success. Yet, we should know that the success of the past is not an indication of the present and future successes, one has to be careful. Those that made the risk through Bitcoin have had their luck already stretched, it should not be expected as same these days. The price of Bitcoin is now high, and even the volatility of the market is no more encouraging, so no one should expect success like before.

And as for the boring of money to trade or invest in BTC whatsoever is not good, only use the money you can afford to lose for those risks.

[xSkylarx]

It is true that some people have become rich through crypto trading in the recent times. But considering the high risk involved in trading, do you think it's proper/wise to trade with borrowed funds as your capital irrespective of your trading experience?

It is easier to walk across the road with a blindfold and be at peace that you will not get knocked down than to trade with borrowed funds.
The repercussions are too great. Especially when your creditors come knock. Just avoid it totally.

How can you cross a road blindfolded? And also, why are you comparing them both? But, while I understand your point about the possibility, comparing it to something else is completely off-topic.

There is still a 50% chance that you can get back and pay your loan if you win trades and make a profit, but it is not sure. That is why if you are planning to take out a loan, make sure that you can pay it even if you lose it all. This is really the sad truth for poor people like us: we want to risk, but we don't have any money to spend.

[BobK71]

From my own experience, I can say that this is a very wrong decision. It seems to me that this almost always leads to the fact that the amount of debt only increases.

Using borrowed money on cryptocurrency trading platforms is very risky. If there is any mistake in the investment it is not possible to get it back. Moreover, borrowing money can expose you to bad things in several steps. One is that if you borrow money from a friend or relative to finance it, the relationship may falter after a while. Also, a negative view is passed on the borrowers in the society. However, taking a loan from a financial institution is different. Borrowed money has to be brought in for a certain period of time and if the crypto is in bad shape then many are not in a position to understand the situation and the relationship will deteriorate.

[freedomgo]

Why not if you're willing to gamble and the loan amount is within your personal risk tolerance? The problem is that having yet to learn what to do with borrowed money is a prime example of ignorance and a surefire recipe for disaster.

But who knows? Maybe one day you'll also become a crazy rich person OR become someone who will post their losses on a forum like this.

I should say borrowing funds is not good to start especially in a risky activity like trading. However, if you are capable to pay for it provided that you also have multi sources of income aside from trading, then why not? I believe a lot of successful traders nowadays also started with loans, but because they are good and determined enough to make profits, they end up being successful traders. If taking loans can give you a good start and will bring usefulness for you, then it’s something that we should not afraid to take.

[Lanatsa]

Why not if you're willing to gamble and the loan amount is within your personal risk tolerance? The problem is that having yet to learn what to do with borrowed money is a prime example of ignorance and a surefire recipe for disaster.

But who knows? Maybe one day you'll also become a crazy rich person OR become someone who will post their losses on a forum like this.

I should say borrowing funds is not good to start especially in a risky activity like trading. However, if you are capable to pay for it provided that you also have multi sources of income aside from trading, then why not? I believe a lot of successful traders nowadays also started with loans, but because they are good and determined enough to make profits, they end up being successful traders. If taking loans can give you a good start and will bring usefulness for you, then it’s something that we should not afraid to take.

Its never been recommendable and it would be better if you do start up with small amount first and trying out to grasps everything via learning and facing up those things which you would really be not able to avoid

on not to lose which is really very normal.You shouldnt really consider out on taking a loan or borrowing up money because they are really that bound to lose afterwards specially when you are still just starting up.
You cant really be able to assure yourself to be ending up on being profitable and in case if you do have that loan or borrowed funds then you are really that obliged on repaying that.
Just what on been said that if you do have other source for you to pay then its fine but if not then dont take up this desperate step.

[Cantsay]

First of all the whole cryptocurrency industry is a risk itself. Trading is also a risk and borrowing money to trade doubles the risk involved.
I wouldn't advice anyone to take a loan to trade because there's no guarantee that you're going to make any profit from the trade and even so you still risk losing the whole capital ( the money borrowed).
But if you have an alternative way of paying off the borrowed money if eventually you loss the money during your trade then you can go for it. But it's still not advisable though.

[jostorres]

It is true that some people have become rich through crypto trading in the recent times. But considering the high risk involved in trading, do you think it's proper/wise to trade with borrowed funds as your capital irrespective of your trading experience?

It is easier to walk across the road with a blindfold and be at peace that you will not get knocked down than to trade with borrowed funds.
The repercussions are too great. Especially when your creditors come knock. Just avoid it totally.

How can you cross a road blindfolded? And also, why are you comparing them both? But, while I understand your point about the possibility, comparing it to something else is completely off-topic.

There is still a 50% chance that you can get back and pay your loan if you win trades and make a profit, but it is not sure. That is why if you are planning to take out a loan, make sure that you can pay it even if you lose it all. This is really the sad truth for poor people like us: we want to risk, but we don't have any money to spend.

That type of risk can be done with your own money because if you lose that will only matter to you and nobody else. But if you get loans from other people, borrow from your father or something like that, or friends, or any other family, or any fool then it will be a terrible situation to be in.

I personally care about long term investment which means I can't get a loan since if I want to be long term then how could I pay the loan back. The only solution would be getting a loan from a bank that I can pay back with my salary, and if I do that then I would be able to pay it back with my salary without caring about what bitcoin does, that's the only thing.

[Obari]

It is true that some people have become rich through crypto trading in the recent times. But considering the high risk involved in trading, do you think it's proper/wise to trade with borrowed funds as your capital irrespective of your trading experience?

I believe that deep down your heart, you already know the right answer to this question and I don't know why but I feel and think that this post is more of an attention and possibly merit seeking but there are alot of questions that deserves answers.

Now answering your question, I will never trade or even use a borrowed fund for anything digital asset, not after my personal experience and I will never advice any other person go into that and beside, it is always warned even by some brokers not to use money we can't afford to lose and as well not borrowing any money.

[rozak]

Now answering your question, I will never trade or even use a borrowed fund for anything digital asset, not after my personal experience and I will never advice any other person go into that and beside, it is always warned even by some brokers not to use money we can't afford to lose and as well not borrowing any money.

but some desperate people must be around us. look at the downturn in the market. and they know how this market works. they borrow money from someone they know for an indefinite amount of time. in hopes of the coming bull season and doubling down on their investment.

I wouldn't do it either, but around us, some people do. especially those who think of the crypto market and investing as a job for them.

[Sebas.tian]

Trading with borrowed funds is not advisable, because cryptocurrency investment is different from other business you can use borrow money to expand the business. Those that invested huge amount of borrowed funds in crypto investment last year January 2022, hoping before the end of the year they will pay back the interest but their plan failed at the end, because the price of the coins they purchased remain low till now. It is better to trade with your little capital than borrow money to trade in the market, because cryptocurrency market is unpredictable, it can pump higher this month and dump next month to allow traders to buy and hold for a better future.

[lousie9]

Trading with borrowed funds is not advisable,

you are right, it would be better to trade with the small capital that we have, with the benefits and risks that we can face ourselves rather than borrowing funds from people for trading. this is too big a risk. not to mention if we lose, we have to repay the loan. it's like a double loss.
it may be different if what is intended is to share funds for long-term investments. such as a 50:50 distribution of the profits earned. although also risky. but when the people working together are people we know and know the risks of crypto assets. it can be done. but still, it would be more convenient to stick with our funds.

[ultrloa]

Now answering your question, I will never trade or even use a borrowed fund for anything digital asset, not after my personal experience and I will never advice any other person go into that and beside, it is always warned even by some brokers not to use money we can't afford to lose and as well not borrowing any money.

I wouldn't do it either, but around us, some people do. especially those who think of the crypto market and investing as a job for them.

Not good to be an option just to have money to used for investing on crypto since we don't know what will come and its so risky since we might lose and that will be a big problem to us. Much better if you just stick with the amount you have since even if you lose you will not get any stressed paying someone who sue you for what money you lose from them. Crypto market is so unpredictable so don't risk all with it and always use extra money you have.