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Borrowing money to fund your trading account,Good/Bad


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Borrowing money to fund your trading account,Good/Bad

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  #1 (permalink)
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In a recent reply in another thread, a comment was made dont borrow money to trade with. I have gave this thought many times before because I have read it over and over on futures.io (formerly BMT)

Anyone that has ever started a small business knows a start up of 100k is minimum, so if the same is applied to trading being a business, whats the difference? People mortgage their homes, max credit cards, borrow against equity, cash out IRA and so on to fund a new start up a small business.

The risk are the same, the pressure is the same, the stress is the same. 95% of small business fail 95% of all intra day traders fail. So whats the reason why everyone says dont borrow to fund your trading business? Now I need to say this most people who start a small business have experience in that area, so assume the trader has experience in trading, already past the learning stage. Ive learned to clarify on futures.io (formerly BMT) to prevent more discussion than was needed for a answer. Have I considered doing this yes,I like size figured I throw it out to see how the majority thinks.whats ur thoughts? Because honestly I dont see the difference because business is business, you make it,go bankrupt, or earn a salary.

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  #3 (permalink)
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Rad4633 View Post
In a recent reply in another thread, a comment was made dont borrow money to trade with. I have gave this thought many times before because I have read it over and over on futures.io (formerly BMT)

Anyone that has ever started a small business knows a start up of 100k is minimum, so if the same is applied to trading being a business, whats the difference? People mortgage their homes, max credit cards, borrow against equity, cash out IRA and so on to fund a new start up a small business.

The risk are the same, the pressure is the same, the stress is the same. 95% of small business fail 95% of all intra day traders fail. So whats the reason why everyone says dont borrow to fund your trading business? Now I need to say this most people who start a small business have experience in that area, so assume the trader has experience in trading, already past the learning stage. Ive learned to clarify on futures.io (formerly BMT) to prevent more discussion than was needed for a answer. Have I considered doing this yes,I like size figured I throw it out to see how the majority thinks.whats ur thoughts? Because honestly I dont see the difference because business is business, you make it,go bankrupt, or earn a salary.

Lots of funds are started with borrowed money. Almost all of the big ones use not only the leverage available in the market but also leverage borrowed money. Is this wise? Only time will tell but when they blow up, they blow up big.

I think borrowing money to start a trading business is fine with the caveat that all the participants know what its being borrowed for. The local bank that asks what the money is for won't respond well if you tell them the 100K is for a futures trading account. On the other hand, a wealthy relative might respond better if they know what you are doing and is comfortable with the risks.

Like all things, there is no one correct answer here. Its whats best for you and your family given your current circumstances.

I think a better option would be to qualify for a program like TopStepTrader. Same 100K but no real risk to you other than your entry fee. Plus you get professional back office support. Something to think about.

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  #4 (permalink)
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Rad4633 View Post
Anyone that has ever started a small business knows a start up of 100k is minimum, so if the same is applied to trading being a business, whats the difference? People mortgage their homes, max credit cards, borrow against equity, cash out IRA and so on to fund a new start up a small business.

The risk are the same, the pressure is the same, the stress is the same. 95% of small business fail 95% of all intra day traders fail. So whats the reason why everyone says dont borrow to fund your trading business?

I would challenge your first statement; this is very dependent on the business, and certainly $100K is not a minimum for many businesses.

Running a business in debt for most adds more pressure, more stress, and can potentially lead one to make decisions that are based in fear and worry, because he is working with money he cannot afford to lose. The fact that most people do it is all the more reason to do one's best to trade with capital they own, that is not owed. Most people think nothing of running up credit cards, but then they realize they are in deep crap once they get too far behind.

Anyone who mortgages his home to start a business needs to rethink his sanity and business logic.

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  #5 (permalink)
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josh View Post
Running a business in debt for most adds more pressure, more stress, and can potentially lead one to make decisions that are based in fear and worry, because he is working with money he cannot afford to lose. The fact that most people do it is all the more reason to do one's best to trade with capital they own, that is not owed. Most people think nothing of running up credit cards, but then they realize they are in deep crap once they get too far behind.

Anyone who mortgages his home to start a business needs to rethink his sanity and business logic.

I agree...I suspect most businesses that fail do so because of cash flow problems which is compounded by the amount of debt they have. I don't know this as a statistical fact but I know from personal experience of having owned a small business and seeing that issue from a number of businesses I supported.

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  #6 (permalink)
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josh View Post

Anyone who mortgages his home to start a business needs to rethink his sanity and business logic.

Taking a risk to start a business of any kind is insane. Anyone thats every done so will tell its the most fun and the most stressful thing they've ever done. But the truth is this country was built by risk takers not afraid to lose it all in the pursuit of their dreams.

So yes, mortgaging anything to start a business is nuts, but its the way things get built in this country. Not everyone gets an angel investor. In fact, most don't.

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  #7 (permalink)
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Rad4633 View Post
In a recent reply in another thread, a comment was made dont borrow money to trade with. I have gave this thought many times before because I have read it over and over on futures.io (formerly BMT)

Anyone that has ever started a small business knows a start up of 100k is minimum, so if the same is applied to trading being a business, whats the difference? People mortgage their homes, max credit cards, borrow against equity, cash out IRA and so on to fund a new start up a small business.

The risk are the same, the pressure is the same, the stress is the same. 95% of small business fail 95% of all intra day traders fail. So whats the reason why everyone says dont borrow to fund your trading business? Now I need to say this most people who start a small business have experience in that area, so assume the trader has experience in trading, already past the learning stage. Ive learned to clarify on futures.io (formerly BMT) to prevent more discussion than was needed for a answer. Have I considered doing this yes,I like size figured I throw it out to see how the majority thinks.whats ur thoughts? Because honestly I dont see the difference because business is business, you make it,go bankrupt, or earn a salary.

@Rad4633

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That said....

1. Your mortgage analogy doesn't hold water.... If your home is foreclosed on .... your credit is shot... but you don't owe the bank any more money . You borrow money and lose it trading... you still owe the money.

2. No one in their right mind would loan you $100,000 to start a business where ... you have no "skin in the game" .... you offer no collateral .... and you have no experience making money doing what the start up business does .

3. If you do decide to rob your 401K .... or bet the farm ... or max out your credit cards ... please let me know so I don't write you any more indicators... I don't want to be an enabler

I'm just a simple man trading a simple plan.

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PandaWarrior View Post
So yes, mortgaging anything to start a business is nuts, but its the way things get built in this country. Not everyone gets an angel investor. In fact, most don't.

Risking capital => ok, in my book
Risking place of dwelling => unnecessary

I would say that while the country was built on risk-taking, our predecessors largely did not make a habit of borrowing vast sums of money for unproven things. My grandfather, who is passed away for some time now, never thought of the idea of buying a house with borrowed money, and he saved for decades in order to provide a home for my mother. Just one example, but I think statistics over the last century would show that debt is not an intrinsic part of the US's history. The auto makers never offered a lease when they first started, it was unthinkable that someone would "rent" a car before they could afford to buy it.

The thing is, most people think they need a LOT of money to start a business. How about starting a business small, growing it, and then look to operate from a positive cash flow? It's like the trader who buys 6 monitors and 2 Intel i7's with 14TB server space and he hasn't really started trading yet? I think if a person is tempted to mortgage his house, he should consider that he needs to earn the right to get more capital. What can he do to produce the capital? There are risks, and then there is stupid.

I'm not trying to argue or offend anyone, but I've just heard and seen too many cases of businesses failing simply because they bite off more than they can chew. Start small (or start a different business first), if capital requirements are too high.

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  #9 (permalink)
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josh View Post
I would challenge your first statement; this is very dependent on the business, and certainly $100K is not a minimum for many businesses.



Running a business in debt for most adds more pressure, more stress, and can potentially lead one to make decisions that are based in fear and worry, because he is working with money he cannot afford to lose. The fact that most people do it is all the more reason to do one's best to trade with capital they own, that is not owed. Most people think nothing of running up credit cards, but then they realize they are in deep crap once they get too far behind.

Anyone who mortgages his home to start a business needs to rethink his sanity and business logic.

@josh- I enjoy us exchanging different views, Im always learning...thx for reply

Agree on 100k statement

Hummm,interesting response. Why would you say mortgaging one home for business is bad, you'll never get a cheaper rate on borrowed money. Most cases its half the rate of a normal loan. I built a custom home few yrs back paid for it upfront had built in equity, then took out a mortgage bc I want my money to make money. I see your point of view. Its all bout security.Who cares if your home is paid for and u cant afford utilities,food,etc what good will that shelter over your head do you then?

Same with business, if one is afraid to borrow against business, then A) its a bad business or B)there is security issues which would lead to decisions that would not be in the best interest for the business.

Credit Cards I love the damn things...No need to box thousands of merchant receipts every yr,CC statement has it all, I get cash back to pay what i would have to anyways so paying Invoices, I make money,Fraud protection most cases you dont get this with a debit card. And we wont even mention 0% for a year in advance, talk bout floating funds for free,yes 4% one time transaction fee but thats nothing. Key to cards is manage them to benefit you

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  #10 (permalink)
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josh View Post
Risking capital => ok, in my book
Risking place of dwelling => unnecessary

I would say that while the country was built on risk-taking, our predecessors largely did not make a habit of borrowing vast sums of money for unproven things. My grandfather, who is passed away for some time now, never thought of the idea of buying a house with borrowed money, and he saved for decades in order to provide a home for my mother. Just one example, but I think statistics over the last century would show that debt is not an intrinsic part of the US's history. The auto makers never offered a lease when they first started, it was unthinkable that someone would "rent" a car before they could afford to buy it.

The thing is, most people think they need a LOT of money to start a business. How about starting a business small, growing it, and then look to operate from a positive cash flow? It's like the trader who buys 6 monitors and 2 Intel i7's with 14TB server space and he hasn't really started trading yet? I think if a person is tempted to mortgage his house, he should consider that he needs to earn the right to get more capital. What can he do to produce the capital? There are risks, and then there is stupid.

I'm not trying to argue or offend anyone, but I've just heard and seen too many cases of businesses failing simply because they bite off more than they can chew. Start small (or start a different business first), if capital requirements are too high.


Josh I couldn't agree with you more on everything you said, my grandfather was my mentor I thought I knew so much. With his passing when I was 27yrs old I realized I knew nothing. Thats why I believe there is no substitute for experience. We AGREE yay hand shake. Now last part depends on how fast you want to grow capital

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  #11 (permalink)
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Rad4633 View Post
In a recent reply in another thread, a comment was made dont borrow money to trade with. I have gave this thought many times before because I have read it over and over on futures.io (formerly BMT)

Anyone that has ever started a small business knows a start up of 100k is minimum, so if the same is applied to trading being a business, whats the difference? People mortgage their homes, max credit cards, borrow against equity, cash out IRA and so on to fund a new start up a small business.

The risk are the same, the pressure is the same, the stress is the same. 95% of small business fail 95% of all intra day traders fail. So whats the reason why everyone says dont borrow to fund your trading business? Now I need to say this most people who start a small business have experience in that area, so assume the trader has experience in trading, already past the learning stage. Ive learned to clarify on futures.io (formerly BMT) to prevent more discussion than was needed for a answer. Have I considered doing this yes,I like size figured I throw it out to see how the majority thinks.whats ur thoughts? Because honestly I dont see the difference because business is business, you make it,go bankrupt, or earn a salary.

Don't dare borrow money to start trading. It is a very bad idea. Bank not going to give you money unless you do it on credit cards. I can tell you a horror story about using credit card cash advances to fund trading account. Other option is to go to friends and family which is another very bad idea as they will hate you when you lose it. Even though they may tell you they understand the risk reality is they don't. They don't expect you to actually lose it and if you do it will not be good.

Borrowed money only increases pressure and trading is hard enough. If you start to lose that pressure when you are dealing with cash is difficult enough. If you are dealing with borrowed money and start to feel like you may not be able to pay it back or stay ahead of the credit card interest most likely you will start to take larger risk which will be your demise. There is risk with any business but trading is very different and should not be compared to taking loans on other types of business.

Borrowed money to fund your account = your demise.

"The day I became a winning trader was the day it became boring. Daily losses no longer bother me and daily wins no longer excited me. Took years of pain and busting a few accounts before finally got my mind right. I survived the darkness within and now just chillax and let my black box do the work."
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  #12 (permalink)
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as a sole prop is not a "business" in any of the typical ways. The pundits that say treat your trading like a business are de facto correct, but most of them have never done anything tangible in the market.

A typical business has a "product" that is typically exchanged for money with a second party know as customers...trading is none of that. No service, no product and no customers means no exchange for money.

Trading should be self funding past an initial investment...and it does not to be anywhere near $100,000. A $5,000 account traded well is a $10,000 account in 90 days because we have leverage on our side...we make money using other peoples money.

Anyone who uses non-risk capital to start trading as a non classified sole prop is, in my opinion either lunatic or delusional. PLEASE PLEASE PLEASE do not do that. Risk capital defined as non financed actual dollars that you could live without and not miss if totally gone.

This is the hardest easy money in the world and while the successful consistent result attained by a VERY few looks glamorous, this is a bare knuckle back alley way to earn a living. The fool hearty, the unprepared, the arrogant, the easily discouraged, the thin skinned, the expert programmer with all the answers and no experience, the pop psychology trading author devotee's, the SIM trade heroes, awesome indicator groupies, and many other stereotypical sub groups are daily led to their demise and financial ruin.

Get a clue (education through experience) and build confidence with risk capital. If that means trading one lot micros with a $400 account so be it. If you can trade you will find a way. Build that account and routinely pay yourself. Lose $400 and find another $400. Keep your day job and never ever bring borrowed money or money required to operate your household to the table.

gotta stop.

NO borrowed money ever.

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  #13 (permalink)
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Gonna go against the grain on this one.

The answer is - it depends.

I started in this business by being fronted by the guy who was mentoring me. Kinda like thousands of guys did back in the pit when that was still relevant. This was a few years ago when leverage wasn't insane. You needed $50k just to punt a few grain contracts overnight.

Needless to say this wasn't like borrowing from grandma. My mentor had direct oversight on my account and kept me on a tight leash when it came to risk control. He also was confident enough that he could teach me to trade successfully like him.

Never had any problem returning his money after my learning experiences and I never would have gotten started without the help.

Of course these days I totally agree that you should just self fund an account to $10k yourself since margins and transaction costs are much less than they used to be (relatively speaking). If you can't make it with a $10k account you definitely can't make it with $100k borrowed.

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  #14 (permalink)
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Some of the most successful traders got started with a stake from someone else. So the thought of borrowing money to trade isn't entirely unheard of. The question is how are you going about it?

Are you working with a mentor as the previous poster referred to where they have direct oversight of what you're doing?

Or are you looking to borrow against your personal assets/credit from a bank to fund a trading account?

If your answer is the later of the two, what is your track record and experience in trading?

My point here is there are two types of scenarios that can play out here. One would be that you're an experienced trader. You've been successful for an extended period of time and would look to increase your working capital, etc. The other scenario which is less favorable, would be that you have very little to no experience in trading and are borrowing the money on more of a pipe dream. Its pretty clear to see who would most likely be the more successful of the two.

Another consideration is and I'm not giving you personal legal or financial advice here but something that I am familiar with which is, under what structure are you operating your business and borrowing the capital? I personally operate my trading within LLCs. The reason for that is paramount in that I'm separating my business' liabilities away from my personal liabilities and vice-versa.

My point here is similar to what others have eluded to. If you have no experience of extended success and are just looking to fund or increase your trading capital by taking a straight forward mortgage against your primary residence or personal loan or credit line (card) borrowing under your personal name or sole proprietor name, you're putting yourself/family into a potentially dangerous financial position should you fail to service that debt. Not only will you have failed at trading but you will be financially destroyed. I knew a guy during the dot com boom days that advanced cash off all his credit cards and invested it all in tech stocks. He did extremely well at first but then when different market conditions came along, he ended up getting nailed. On the flip side, I know another guy that took all of his credit cards and did an advance and bought a multi-unit condo building which turned into a multi-million dollar reward. Do you want to know what the difference was between the two of them? The tech stock guy had no idea what he was doing while the other guy knew real estate very well by working in the field as a realtor and finally went for it. There of course is luck involved but I think you'd get my point.

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wldman View Post
Trading should be self funding past an initial investment...and it does not to be anywhere near $100,000. A $5,000 account traded well is a $10,000 account in 90 days because we have leverage on our side...we make money using other peoples money.

Get a clue (education through experience) and build confidence with risk capital. If that means trading one lot micros with a $400 account so be it. If you can trade you will find a way. Build that account and routinely pay yourself. Lose $400 and find another $400. Keep your day job and never ever bring borrowed money or money required to operate your household to the table.

gotta stop.

NO borrowed money ever.

@wldman, thank you for a great post. Interesting point that with leverage, we are already trading using other people's money.

I'd be curious to hear your thoughts on starting out trading other people's money with size, through a prop like TST, where you don't put up your own capital, but give back 30-40% of profits, as opposed to starting out small on your own and building up over time (given competency in both cases).

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Rad4633 View Post
In a recent reply in another thread, a comment was made dont borrow money to trade with. I have gave this thought many times before because I have read it over and over on futures.io (formerly BMT)

Anyone that has ever started a small business knows a start up of 100k is minimum, so if the same is applied to trading being a business, whats the difference? People mortgage their homes, max credit cards, borrow against equity, cash out IRA and so on to fund a new start up a small business.

The risk are the same, the pressure is the same, the stress is the same. 95% of small business fail 95% of all intra day traders fail. So whats the reason why everyone says dont borrow to fund your trading business? Now I need to say this most people who start a small business have experience in that area, so assume the trader has experience in trading, already past the learning stage. Ive learned to clarify on futures.io (formerly BMT) to prevent more discussion than was needed for a answer. Have I considered doing this yes,I like size figured I throw it out to see how the majority thinks.whats ur thoughts? Because honestly I dont see the difference because business is business, you make it,go bankrupt, or earn a salary.

@Rad4633: Borrowing money for funding a trading account is VERY BAD. An account can already be leveraged. If you trade with borrowed money, your are over-leveraged. Over-leveraged traders are calling for trouble and will see their accounts depleted.

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Rad4633 View Post
In a recent reply in another thread, a comment was made dont borrow money to trade with. I have gave this thought many times before because I have read it over and over on futures.io (formerly BMT)

Anyone that has ever started a small business knows a start up of 100k is minimum, so if the same is applied to trading being a business, whats the difference? People mortgage their homes, max credit cards, borrow against equity, cash out IRA and so on to fund a new start up a small business.

The risk are the same, the pressure is the same, the stress is the same. 95% of small business fail 95% of all intra day traders fail. So whats the reason why everyone says dont borrow to fund your trading business? Now I need to say this most people who start a small business have experience in that area, so assume the trader has experience in trading, already past the learning stage. Ive learned to clarify on futures.io (formerly BMT) to prevent more discussion than was needed for a answer. Have I considered doing this yes,I like size figured I throw it out to see how the majority thinks.whats ur thoughts? Because honestly I dont see the difference because business is business, you make it,go bankrupt, or earn a salary.

@Rad4633:

Agree! Not different than any other business. Most advice given in the trading community is to not trade your monthly rent, only trade risk capital. This is for newbies wanna get-rich-overnight. Many big traders trade $millions in a day, mostly leveraged just as a business. But they know what they are doing, just like another good business.

So, here it is in a nutshell:

If one has acquired the skills, education, mental, physical, and resource capabilities demanded for a specific job he will most likely be successful. When he makes a mistake, he knows how to fix things.

If he needs more help he should go back to the big "if" and re-read and understand the fine print that follows.

Cheers!

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  #18 (permalink)
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MWinfrey View Post
I agree...I suspect most businesses that fail do so because of cash flow problems which is compounded by the amount of debt they have. I don't know this as a statistical fact but I know from personal experience of having owned a small business and seeing that issue from a number of businesses I supported.


ThatManFromTexas View Post
@Rad4633

Disclaimer: This post does not represent the view point of the owners, managers, or moderators of this web site and is not intended as a slam against any moderator, board member, any banned former members whose name we dare not say, any other living person, any recently living person or any person or persons whose status we are not sure of and especially not for any platform vendor with a questionable product and a pit bull lawyer. This post is meant purely for entertainment and should not be confused with a real thought.

I am not a programmer, coach, trainer or self appointed guru and do NOT hold myself up to be a good example for anything. I do not have a book, trading room or seminar. Have a professional review any code you receive from me before you trade real money with it. There is a high risk of loss trading futures. I am not responsible for any losses incurred trading real money with any code you receive from me .Even though I have an opinion on every subject under the sun, I do not give financial advice. Nor should I be held responsible for feeble attempts at humor at your expense.


That said....

1. Your mortgage analogy doesn't hold water.... If your home is foreclosed on .... your credit is shot... but you don't owe the bank any more money . You borrow money and lose it trading... you still owe the money.

2. No one in their right mind would loan you $100,000 to start a business where ... you have no "skin in the game" .... you offer no collateral .... and you have no experience making money doing what the start up business does .

3. If you do decide to rob your 401K .... or bet the farm ... or max out your credit cards ... please let me know so I don't write you any more indicators... I don't want to be an enabler

Thx you TMFT Im smiling like a Texan reading your reply

1)Ok you have a valid point, If you had a business loan rather than personal kill the business loan thru bankruptcy and your personal score survives
2)Ok need 2 yr trading returns Ok I get this too
3)No worries my farm isnt tied to my home loan,plus I made the right away from hell to the home/plus 2 acres so please keep your PRETTY indi;s for me.....seriously ty TMFT I do get it!

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Fat Tails View Post
@Rad4633: Borrowing money for funding a trading account is VERY BAD. An account can already be leveraged. If you trade with borrowed money, your are over-leveraged. Over-leveraged traders are calling for trouble and will see their accounts depleted.

This is for laughs, what do we call a well funded trader whose accounts are depleted

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aligator View Post
@Rad4633:

Agree! Not different than any other business. Most advice given in the trading community is to not trade your monthly rent, only trade risk capital. This is for newbies wanna get-rich-overnight. Many big traders trade $millions in a day, mostly leveraged just as a business. But they know what they are doing, just like another good business.

So, here it is in a nutshell:

If one has acquired the skills, education, mental, physical, and resource capabilities demanded for a specific job he will most likely be successful. When he makes a mistake, he knows how to fix things.

If he needs more help he should go back to the big "if" and re-read and understand the fine print that follows.

Cheers!

Aligator there was a comment in your Hoax thread that compelled me to write this one. The big IF is dead on. TY for your reply

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  #21 (permalink)
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isnt Europe and the USA running on the borrowed money principle?.....ouch.

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wldman View Post
as a sole prop is not a "business" in any of the typical ways. The pundits that say treat your trading like a business are de facto correct, but most of them have never done anything tangible in the market.

A typical business has a "product" that is typically exchanged for money with a second party know as customers...trading is none of that. No service, no product and no customers means no exchange for money.

Trading should be self funding past an initial investment...and it does not to be anywhere near $100,000. A $5,000 account traded well is a $10,000 account in 90 days because we have leverage on our side...we make money using other peoples money.

Anyone who uses non-risk capital to start trading as a non classified sole prop is, in my opinion either lunatic or delusional. PLEASE PLEASE PLEASE do not do that. Risk capital defined as non financed actual dollars that you could live without and not miss if totally gone.

This is the hardest easy money in the world and while the successful consistent result attained by a VERY few looks glamorous, this is a bare knuckle back alley way to earn a living. The fool hearty, the unprepared, the arrogant, the easily discouraged, the thin skinned, the expert programmer with all the answers and no experience, the pop psychology trading author devotee's, the SIM trade heroes, awesome indicator groupies, and many other stereotypical sub groups are daily led to their demise and financial ruin.

Get a clue (education through experience) and build confidence with risk capital. If that means trading one lot micros with a $400 account so be it. If you can trade you will find a way. Build that account and routinely pay yourself. Lose $400 and find another $400. Keep your day job and never ever bring borrowed money or money required to operate your household to the table.

gotta stop.

NO borrowed money ever.

wldman-you answered directly to my question in your opinion and not me ,Ty and I have no reply I agree...And trust me I read this more than a few times before replying back...

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Private Banker View Post
Some of the most successful traders got started with a stake from someone else. So the thought of borrowing money to trade isn't entirely unheard of. The question is how are you going about it?

Are you working with a mentor as the previous poster referred to where they have direct oversight of what you're doing?

Or are you looking to borrow against your personal assets/credit from a bank to fund a trading account?

If your answer is the later of the two, what is your track record and experience in trading?

My point here is there are two types of scenarios that can play out here. One would be that you're an experienced trader. You've been successful for an extended period of time and would look to increase your working capital, etc. The other scenario which is less favorable, would be that you have very little to no experience in trading and are borrowing the money on more of a pipe dream. Its pretty clear to see who would most likely be the more successful of the two.

Another consideration is and I'm not giving you personal legal or financial advice here but something that I am familiar with which is, under what structure are you operating your business and borrowing the capital? I personally operate my trading within LLCs. The reason for that is paramount in that I'm separating my business' liabilities away from my personal liabilities and vice-versa.

My point here is similar to what others have eluded to. If you have no experience of extended success and are just looking to fund or increase your trading capital by taking a straight forward mortgage against your primary residence or personal loan or credit line (card) borrowing under your personal name or sole proprietor name, you're putting yourself/family into a potentially dangerous financial position should you fail to service that debt. Not only will you have failed at trading but you will be financially destroyed. I knew a guy during the dot com boom days that advanced cash off all his credit cards and invested it all in tech stocks. He did extremely well at first but then when different market conditions came along, he ended up getting nailed. On the flip side, I know another guy that took all of his credit cards and did an advance and bought a multi-unit condo building which turned into a multi-million dollar reward. Do you want to know what the difference was between the two of them? The tech stock guy had no idea what he was doing while the other guy knew real estate very well by working in the field as a realtor and finally went for it. There of course is luck involved but I think you'd get my point.

PB its always a pleasure to hear from you, you ask all the correct questions and give logical replies. Also yes the LLC is something I must do soon thanks for the reminder, Most all my other ventures have been LLC's unless C or S were better suited.

I sand bag alot on futures.io (formerly BMT)(sand bag is a drag race slang for not showing all youve got)Ive always been a aderinaline junkie, fast is never fast enough. That was my slogan.another business story from years ago.You know Im in Nascar central and drag race heaven, We have the only 4 lane drag strip in the country.30000 hp going by is like nothing your body has ever felt before... Anyhow moving on

Mentor-no direct oversight, but for me Ive never had teachers I watch and learn. One has to know how to acquire information needed to complete any task at hand. The key is surrounding yourself with experience and applying the experience correctly. Am I close with a very respected Master, yes I can not ever thank him enough for his words of wisdom, people speak of the pressure of having business loans and how this can affect you emotionally. Yes I agree but then we mature and learn to control it. The only thing Ive been emotional about lately is what costume my Gf is going to want me to dress up as for Halloween..Geez. Now Im going throw @Big Mike in here as a example dont want to go on bout me. As a ie. every time someone threatens futures.io (formerly BMT) with legal action. Does Mike get emotional worried about the what if this happens etc he follows his protocol and what follows will be handled by the next protocol. See how easy this is.No emotion needed worrying about what if's isnt needed, have a plan and follow it everything will work it self out...BUT always be prepared. Did we all enjoy our first presidential debate?

Funding, have always had a funded account, trade live and traded live from get go... going on 4 yrs ago, so Ive got experience, have I blew accounts yes many times, Have I doubled accounts the same. How is my trading different today than beginning, manage contract size per account,know key levels etc I sorta do the Martingale strategy now and then on losers, depends on my probability for that trade, but 3 times Im done for that day.

Track record-bad,good,bad good ,bad, great sorta bad, Wow,slacking,focused,ummm Im getting much happier.... that sums it up.

scenario which would play out, Im a fairly confident guy and weigh my odds. I enjoy learning from everyone, no matter if someone has different view from me I try to understand how and why they do what they do.


In closing PB Ty for your reply, hope you have a great night

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Futures Operator View Post
@wldman, thank you for a great post. Interesting point that with leverage, we are already trading using other people's money.

I'd be curious to hear your thoughts on starting out trading other people's money with size, through a prop like TST, where you don't put up your own capital, but give back 30-40% of profits, as opposed to starting out small on your own and building up over time (given competency in both cases).

I was thinking about this very thing today after @PandaWarrior mentioned using TST. I dont know enough info to reply at this time about TST. But for one I would suspect the actual numbers of traders that are in on the program is very very small number(ones that have completed coarse and are trading with TST monies). I would also speculate they are over seen by a TST account manager that can over ride them at anytime.ok duh this is a given. The business model makes sense , but what is the REAL business model. Time to do research

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Rad4633 View Post
This is for laughs, what do we call a well funded trader whose accounts are depleted

@Rad4633

Trading Coach .... Seminar Speaker... Trading Room Founder....

I'm just a simple man trading a simple plan.

My daddy always said, "Every day above ground is a good day!"
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There are times when it makes sense to take on the risk of the debt. However, sometimes patience can replace the need for debt. In trading, for example, if you have a good strategy and you are growing your account over time, then one day you will not need that $100K loan to start your trading business. If on the other hand you cannot grow your account, then adding more positions with a $100K loan will only create more problems for you.

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