Borrow money to trade

[CryptoBuds]

I said "never borrow to start a new business from scratch". A new business is full of uncertainty and you are not sure yet if it will be profitable. People borrow to start a new business, but it is very risky, your chances of repaying depends on the success of the business.  The best way to borrow to support your business is by borrowing for expansion purpose. At this stage, you are more certain about the business and can still repay.

Unless I did not understand you very well, there are rich people that borrow money on business that they have not invested on before and they started it from scratch. They make their calculations and tried their luck if the calculation is positive. Another thing is that there are different kinds of loan, not all are the interest so huge like the banks interests. There have been people that make it in life through loan if the business boom. And there are people that were unable to pay back the loan if the business is not profitable.

Sorry for jumping into your conversation. I just wanted to share my thoughts on this.

I agree that borrowing money to start business or invest is risky. But I think that depend on each person's financial situation and source of income for repaying the debt.

If you can still repay the loan even if the business fail, borrowing isn't necessarily a bad decision. On the other hand, if your only plan to repay the debt is hoping that the business will turn a profit, then borrowing money is a bad idea.

Borrowing money to start a business or invest isn't recommended, but I do not think we should rule it out completely.

[Hamza2424]

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.

Bro, in one of your own topics, you said people can be gamblers in trading, or maybe I am confusing your topics with someone else's. But yep, it is true. I can be addicted to trading and can lose everything without managing my risk. If that friend of yours is earning $1k a month from his business, then he is taking a lot more risk than he was supposed to take. He should not have taken that loan in the first place. Even if he did, he should have managed the risk.

Well, if he wants to learn more, then that's not a sign that he is addicted. If he has done it for the first time and he is determined to learn so that he won't make the same mistake again, then he is on the right path. Guide him if you can, otherwise, don't give him advice that won't work for him.

He might be a better trader than you, so let him learn. Give him some resources if you have any.

[ndutndut]

~

A very strange decision, considering that this person earns only $1,000 a month, he is willing to take out a loan that will take him several months to repay. And since you say that he lost everything in just three days, I can assume that he has absolutely no risk management. I also assume that he is trading with leverage, which significantly increases his risks. I think that, to begin with, he should learn the basics of trading on the spot market. Only after becoming a reasonably experienced trader should he try trading with leverage. Although, personally I consider leveraged trading to be more like gambling.

What you said and suspected about the case being told is exactly right. Looking at the story, he must have been doing futures trading and of course this is very high risk, especially when using borrowed money. Borrowing $1500 and having to pay $1800, then losing it all in 3 days, is obviously a very bad decision plus there’s no risk management and emotions aren’t controlled.

Moreover, when he says he won’t do it again and wants to really learn this actually indicates a pattern that makes people addicted when they lose, they want to learn while playing again. What he should do is stop for a moment and evaluate his mistakes, especially regarding the money he uses for trading don’t use borrowed money. A brief piece of advice we can give is to advise him, and if he insists let him bear the risk himself. Because sometimes it’s indeed hard to advise friends they’ll realize the lesson only after they’ve lost everything.

[Supreme Donvic]

I said "never borrow to start a new business from scratch". A new business is full of uncertainty and you are not sure yet if it will be profitable. People borrow to start a new business, but it is very risky, your chances of repaying depends on the success of the business.  The best way to borrow to support your business is by borrowing for expansion purpose. At this stage, you are more certain about the business and can still repay.

Unless I did not understand you very well, there are rich people that borrow money on business that they have not invested on before and they started it from scratch. They make their calculations and tried their luck if the calculation is positive. Another thing is that there are different kinds of loan, not all are the interest so huge like the banks interests. There have been people that make it in life through loan if the business boom. And there are people that were unable to pay back the loan if the business is not profitable.

You can take loan to start up a physical business but you cannot take loan to trade cryptocurrency, we all know how volatile cryptocurrency is in nature and because of this volatile nature, you can lose your money at any time. Nothing is guaranteed when it comes to crypto trading no matter how good you are in trading, you can still lose huge amount of money.
The kind of business you should take loan for our physical business for example real estate business, car business, farming business etc. I know that people also lose money in this businesses but it is better to borrow money for this kind of business than cryptocurrency trading.

[JoyceBTC]

I said "never borrow to start a new business from scratch". A new business is full of uncertainty and you are not sure yet if it will be profitable. People borrow to start a new business, but it is very risky, your chances of repaying depends on the success of the business.  The best way to borrow to support your business is by borrowing for expansion purpose. At this stage, you are more certain about the business and can still repay.

Unless I did not understand you very well, there are rich people that borrow money on business that they have not invested on before and they started it from scratch. They make their calculations and tried their luck if the calculation is positive.

Here you said rich people, which actually means they have other sources of income and since they want to start a new business, they might not really have the money for the business at the moment, due to one or two current situations and so they decide to borrow as at that point because they are very sure of paying back. Even if they weighed their options and calculated the business will be positive, the business might still turn otherwise and fail in the future but this set of people don’t really need to worry much in paying back, because they have other source of income and are rich already. But if you know you don’t have means of paying back your loan if your business fails, it is better not to borrow.

[macson]

He is only digging his own grave. Just look, people like this, if they cannot listen to others advice that it is the wrong thing to borrow just for trading, then they will reap what they sow soon enough.

Perhaps he feels that what he is doing is trading, but from the behaviour he is showing, it actually isn't --- he is simply gambling his money in the trading market. Perhaps he does not feel that anything is strange right now, but when the money from his business gradually starts to become insufficient and starts to run out because he keeps putting it into increasingly risky trades, then he will realise that he has merely been fooled by his own mind into thinking he was trading when in fact he was gambling.

[Solokan]

Trading with borrowed money is indeed very dangerous because most people will feel uncomfortable when trading, as it certainly feels different trading with borrowed money than money they're prepared to lose. However, I also feel sorry for your friend who experienced losses while trading. Hopefully, your friend learned from his experience and finally realized that trading with borrowed money is wrong.

However, this is certainly a lesson for beginners interested in trading: don't trade with borrowed money. It's not just one or two people who have fallen victim to borrowed money; many have. Even when investing, don't use borrowed money, let alone trading.