# Borrowing - a dumb idea for a novice trader?



## bumclouds (5 May 2009)

Hey guys,

I started trading about 3 months ago.  I have been reading these forums, and I read a book which is suggested often on here - Adaptive Analaysis by Nick Radge.

I've only done two trades so far, each over one month - I made 35% on Starpharma (SPL), and I made 38.8% on Avexa (AVX). 


However I'm an undergrad university student and the amount which I invest is trivial, and so the returns I get are trivial .  Lunch money at best.

Is borrowing a daft idea?  

Much Love
Andrew


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## MichaelD (6 May 2009)

bumclouds said:


> However I'm an undergrad university student and the amount which I invest is trivial, and so the returns I get are trivial .  Lunch money at best.
> 
> Is borrowing a daft idea?




Utterly daft.

Let's turn it around a little.

"I'm an undergrad student, 3 months into my course. I'm going to borrow money to invest in my chosen profession even though I'm a student and have almost no cash flow. So far I've completed two trial jobs in my profession and they both went well, so I now want to risk money I don't have on something I'm not very experienced at."


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## metric (6 May 2009)

MichaelD said:


> Utterly daft.
> 
> Let's turn it around a little.
> 
> "I'm an undergrad student, 3 months into my course. I'm going to borrow money to invest in my chosen profession even though I'm a student and have almost no cash flow. So far I've completed two trial jobs in my profession and they both went well, so I now want to risk money I don't have on something I'm not very experienced at."





well said....


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## tech/a (6 May 2009)

> Is borrowing a daft idea?




From a guy called Bumclouds--Found that funny!

Michael that was very good.


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## kincella (6 May 2009)

bumcloud...are you a  'bungy jumper' ....its all about the risk....the reward is a few fleeting seconds....
metric has  sound advice for you


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## beamstas (6 May 2009)

Profitable trading is two things


*Boring

and 

Slow*


Cheers
Brad


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## tech/a (6 May 2009)

beamstas said:


> Profitable trading is two things
> 
> 
> *Boring
> ...




Can be.
Can also be Fast and furious.
ask T/H.


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## cutz (6 May 2009)

hi andrew,

Personally i think borrowing is a good thing when the conditions are correct, i.e. you have a secure well paying job, you're building a long term blue chip portfolio over a period of time, your house is paid off if you're that way inclined,ect.ect.

You certainly don't want to worry about a loan when starting off short term trading, especially since statistically new traders tend to blow up accounts.


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## MS+Tradesim (6 May 2009)

tech/a said:


> Can be.
> Can also be Fast and furious.
> ask T/H.




Yep. My most profitable trading this year has been "edge of the chair" split second stuff.

I like boring and slow in bull markets.

And for the opening post, the worst thing that can happen to a newbie is for your first trades to be profitable. You'll think it's easier than it is, and you won't appreciate risk until you've been burnt.


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## investorpaul (6 May 2009)

bumclouds said:


> Hey guys,
> 
> I started trading about 3 months ago.  I have been reading these forums, and I read a book which is suggested often on here - Adaptive Analaysis by Nick Radge.
> 
> ...




In my opinion it depends who you are borrowing from. If its interest free from your parents and under 5,000 then i dont think it would be too much of a problem.

You just need to make sure your first two trades were not just lucky, you need to identify why you entered the trade, if you were proved correct in your assumptions and why the trade was successful. You also have to be prepared to lose the money you owe your parents and they need to be aware that they may not get it back for some time.

I started buying long term stocks when I was quiet young, after i had built my portfolio up as much as possible with my own savings I borrowed money from my parents so i could diversify my portfolio and take larger positions. At the time the amount was relatively small (5K) and after school and on the weekend I worked hard (casual jobs) and made about 350 p.w. so the loan was manageable.


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## jono1887 (6 May 2009)

bumclouds said:


> Hey guys,
> I've only done two trades so far, each over one month - I made 35% on Starpharma (SPL), and I made 38.8% on Avexa (AVX).
> 
> 
> ...




Did you do any analysis before making the decision to buy/sell those specific stocks or was it out of blind luck?? perhaps it would be wise if you made a few more trades and waited a while until your certain you can trade profitable in the long term...

I've only started trading recently as well about 6 months ago, but ive made ~30 trades (all profitable except 1) and im not even confident enough to consider margin lending yet... 

BTW: how much are you investing?? and how much do you pay in brokerage??


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## Mr J (6 May 2009)

MS+Tradesim said:


> And for the opening post, the worst thing that can happen to a newbie is for your first trades to be profitable. You'll think it's easier than it is, and you won't appreciate risk until you've been burnt.




I agree with this. Having a tough run to start with will test your resolve, and motivate you to improve your methods. It will also give you a dose of reality and will help you deal with volatility in the long run.


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## bumclouds (6 May 2009)

Hey guys,

Thanks for all the replies.  

Just to give you a little bit more of an insight into my financial position I'll tell you more about myself:

I have $3k saved up, and my part time job typically pays between $250-$300 p/w (after tax).  I'm at home with my parents.  I dont have any living expenses, except that I like to spend about 10-15 dollars a day on food while I'm at uni, lol (I hate packed lunch).  

I think I would like to borrow about $5k from my parents - just like investorpaul mentioned in this topic.  

The problem I have at the moment is that if I put $1000 into a stock, that means that I'm investing 33% of my savings!  If I have $8k, I could place $800 dollars on each stock perhaps, and be investing a fraction of 10%.  If my portfolio value kept declining, I could keep investing that same percentage (10%), although the brokerage might eventually kill me, no?

Anyway, my parents are very relaxed about lending money to me, and they said they don't mind the prospect of losing some or all of the money they lend to me.   Of course, I'll try my very best not to.



> BTW: how much are you investing?? and how much do you pay in brokerage??




Around $1k per stock.  I'm with commsec, but I'm switching over to belldirect becuase its so much cheaper!


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## MS+Tradesim (6 May 2009)

bumclouds said:


> I'm with commsec, but I'm switching over to belldirect becuase its so much cheaper!




*Disclaimer:* I think learning to trade/invest with borrowed money is a big mistake but if you're going to anyway then......


.......have a think about borrowing the Aussie equivalent of US$10,000 from them to open an account with Interactive Brokers (IB), and then give them back X to leave you with AUD$5000. You need US10,000 to open the account but you don't have to leave that much in there. With IB you will only pay the greater of $6 or 0.08% per side when buying/selling shares. And you won't get charged extra for setting stop losses/contingent orders.


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## investorpaul (6 May 2009)

bumclouds said:


> Hey guys,
> 
> Thanks for all the replies.
> 
> ...




Hi BC,

When I first started buying stocks (mainly medium to long term holdings) I did two purchases at $500 each. I quickly realised i needed a pretty big movement just to cover brokerage, at the time it didnt matter much as I was just buying and holding. I then bumped up my minimum investment to $1000 (only 1 transaction), again I discovered this really didnt cut it and bumped it up again to $2,500. The above amount were all for long term positions, you or others may feel a different amount is better suited for short term trading.

How do you currently identify your trades? do you use technical analysis (charting) or another method?

Also if you are trading you should probably work out a time frame for the trade to work. You dont want to buy something at say $1 and see it hover at that price for ages as your capital could be used better elsewhere.


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## bumclouds (6 May 2009)

^ I'm reading a book on technical analysis at the moment, and it looks very appealing.  However at the time that I chose these stocks, I had no good stratergy.  I simply just collected recommendations from people, and then did my homework on each of those stocks.  And then I just bought the ones that looked most undervalued to me.

That is a bit embaressing to say.


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## nunthewiser (6 May 2009)

bumclouds said:


> ^ I'm reading a book on technical analysis at the moment, and it looks very appealing.  However at the time that I chose these stocks, I had no good stratergy.  I simply just collected recommendations from people, and then did my homework on each of those stocks.  And then I just bought the ones that looked most undervalued to me.
> 
> That is a bit embaressing to say.





hey m8 .beats using a dartboard .well done on your wins , leave the loans be for now and buy a pen and paper to use instead

haveagooday


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## bumclouds (6 May 2009)

MS+Tradesim said:


> *Disclaimer:* I think learning to trade/invest with borrowed money is a big mistake but if you're going to anyway then......
> 
> 
> .......have a think about borrowing the Aussie equivalent of US$10,000 from them to open an account with Interactive Brokers (IB), and then give them back X to leave you with AUD$5000. You need US10,000 to open the account but you don't have to leave that much in there. With IB you will only pay the greater of $6 or 0.08% per side when buying/selling shares. And you won't get charged extra for setting stop losses/contingent orders.





Eek, but does that mean I have to deal with AUD/USD fluctuations in addition to stock market fluctuations?  I don't fancy myself as a currency trader!


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## MS+Tradesim (6 May 2009)

bumclouds said:


> Eek, but does that mean I have to deal with AUD/USD fluctuations in addition to stock market fluctuations?  I don't fancy myself as a currency trader!




Nope. You open an AUD denominated account and as long as you're only trading Aussie instruments there are no currency exchanges involved. But to open the account you need the AUD *equivalent* of US10k...whatever that is at the time you transfer in your inital funds. As an example you might need $13,000 to open the account but then you give 8k back to your parents if they're grubstaking you with 5.


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## investorpaul (6 May 2009)

bumclouds said:


> ^ I'm reading a book on technical analysis at the moment, and it looks very appealing.  However at the time that I chose these stocks, I had no good stratergy.  I simply just collected recommendations from people, and then did my homework on each of those stocks.  And then I just bought the ones that looked most undervalued to me.
> 
> That is a bit embaressing to say.




You dont need to be embarrassed.

Everyone starts somewhere and everyone learns lessons along the way. There will be some who "knock you" for your lack of strategy, but its only because they want to help and give you a chance at success.

No doubt you have been lucky with the market moving up 20%+ from its bottoms over the last 8 or so weeks.

I would recommend that you keep reading those books and more and try and apply what you learn to charts. You should at a minimum understand the basics like trends, support, resistance etc.

You can download a free charting package from incredible charts, just google it and it will pop up.

Also go to www.asx.com.au and under the education tab there is some further reading there which will help.

Finally dont worry if people tell you not to bother or that you dont have enough money for shares, because everyone starts somewhere and you have plenty of time ahead to invest/trade/learn


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## Mr J (6 May 2009)

Everyone has been there in some way or another.



> I simply just collected recommendations from people




You'd probably be better off fading their recommendations :.


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## beamstas (6 May 2009)

MS+Tradesim said:


> Nope. You open an AUD denominated account and as long as you're only trading Aussie instruments there are no currency exchanges involved. But to open the account you need the AUD *equivalent* of US10k...whatever that is at the time you transfer in your inital funds. As an example you might need $13,000 to open the account but then you give 8k back to your parents if they're grubstaking you with 5.




If he is under 21 (like me)
He only needs $3000 US to open an account 
Cheers
Brad


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## MS+Tradesim (6 May 2009)

beamstas said:


> If he is under 21 (like me)
> He only needs $3000 US to open an account
> Cheers
> Brad




Even better!


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## bumclouds (6 May 2009)

is it 21 and under?  or just under 21?

>=( because I just turned 21!!!


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## MS+Tradesim (6 May 2009)

bumclouds said:


> is it 21 and under?  or just under 21?
> 
> >=( because I just turned 21!!!




"Individuals age 21 or younger	USD 3,000 (or USD equivalent)"

http://www.interactivebrokers.com/en/accounts/fees/minimumDeposits.php?ib_entity=llc

Also check out their fees....
http://www.interactivebrokers.com/en/accounts/fees/commission.php?ib_entity=llc

Only downside for you is you won't get market data with them. That costs $37.50/mth. One way around that will be to use the free basic market depth you'll get with an Aussie broker and just execute the trades through IB.

But this is getting ahead of the game...first work out a game plan.

One beauty of IB is when you fund a real account with them you can then open their paper trading account which lets you "trade" the way you would but without risking any dollars.


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## beamstas (6 May 2009)

bumclouds said:


> is it 21 and under?  or just under 21?
> 
> >=( because I just turned 21!!!




Take a look at the interactive brokers site and you will find out! 

Just kidding, here you go buddy







Cheers
Brad


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## bumclouds (6 May 2009)

^ lol, thanks!



MS+Tradesim said:


> But this is getting ahead of the game...first work out a game plan.





Eep.  A game plan I'm not sure about.  I was hoping you guys could help me with that ^_^.

I was thinking that borrowing from the M&D bank (mum and dad, lol) combined with a fixed fraction risk management technique might be okay.  If combined with low brokerage, how do you think this might play out?

For instance, say I set my FF at 10%.  Then when i have 8k i will put $800 into each stock.  And if things go bad and I get reduced to say, 5k, then I will put $500 into each one. 

At at 500 dollar investment, the stock would only have to go up by 2.4% to cover the $6 x 2 brokerage fee involved in that trade.

If things went well from 8k and it turned into 10k, then I would be putting $1000 into each stock.  

I would like to put the FF below 10% but at 8k, it doesn't look feasible to me.  Thoughts/flames?


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## beamstas (6 May 2009)

bumclouds said:


> ^ lol, thanks!
> 
> 
> 
> ...





Don't know how this would work
People normally used fixed fractional to determine position size based off risk

For example $8000
Risk = 1% of account per trade
Risk = $80

Entry Price = $10 per share
Stp Loss = $9.50 per sare
Risk per share = $0.50

Therefore you can buy $80/$0.50 = 160 shares
Which works out to be 160*10 = $1600 position

Another stock you are looking at is $0.50 per share
And you want the stop at $0.48

So you can buy $80/0.02 = 4000 shares
Which costs 4000*0.5 = $2000

As you can see both positions are the different dollar amounts, but you are risking the same. 

This helps even out volatility between higher price and lower price shares. $1000 worth of 10cent shares will react very differently to $1000 worth of $50 shares

Cheers
Brad


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## jono1887 (6 May 2009)

http://www.interactivebrokers.com/en/general/education/highlights.php?p=a

which account do you guys have with IB... i looked at their site and theres like 10+ different accounts to choose from


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## Mr J (6 May 2009)

bumclouds said:


> Thoughts/flames?




Yes, you don't need all of your balance split among x amount of stocks. Don't force your money out there, just wait for good opportunities.



> If combined with low brokerage, how do you think this might play out?




Anyone's guess. Nobody knows your skill, how it will develop, and more importantly, how favourable variance will be.


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## kam75 (6 May 2009)

bumclouds said:


> Hey guys,
> 
> I started trading about 3 months ago.  I have been reading these forums, and I read a book which is suggested often on here - Adaptive Analaysis by Nick Radge.
> 
> ...





I'd probably first try to hone my skills to the point where I'm making money consistently, even if its just betting lunchmoney.  Read some good books and craft your system of rules.  It ain't dumb to use OPM (other people's money).  But first you gotta get to the point where you ain't losing your own. 3 month is nothing dude.  Do it for a year or two and if you're well ahead, then consider borrowing.


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## Sir Osisofliver (6 May 2009)

Hey Bumclouds (Great name by the way),

In my mind trading is a very different animal from investment. For trading you need to have a system of rules in place that incorporate some risk management techniques. Investigate things like trailing stops (they help you have your winners run longer and stop out the poor choices early), Optimization reserves (sums of cash or unused borrowing capacity squirreled away for a rainy day) and figure out what style of analysis (technical/fundamental) works for you *within your framework*.

As an example let me tell you how I *invest* my hard earned.

Over the long term my investments are 50/50 equity and real estate. As the economy cycles between boom and bust I will vary my focus between these two asset classes. At present I am investing heavily into equities and topping up my long-term buy and hold portfolio.


1) Investment - I have a core portfolio of stocks that are designated as long term buy and hold stocks. I create this portfolio by looking at the ASX 200 stocks and applying some parameters both technical and fundamental so that I end up with the highest quality stocks I can find.  This makes up around 80% of the capital I will invest into equities.

2) Trading - The remaining 20% of my equity is placed into a leveraged trading portfolio. (Lets call this $100,000 for ease of calculation - 50k of my own money and 50K of borrowed money). I then have a system or framework that I use to do trades within this portion.  On any particular trade I will risk *no more than* 5% of the portfolio, no more than $5,000.00 per trade and I will have a stop no greater than 7%. I rank my selections based upon a number of factors and come up with 5 to 10 targets per week, higher ranked selections get wider stops, lower ranked selections get smaller stops and entries.

You also need to have a clear understanding of which part of the market you are investing in and what drives that market. I follow a broad approach across the equity market using a system I devised over five years.  Many others specialize within a particular type of trading, eg Currency, CFD's, Futures, or specific sectors of the market or market capitalizations. So it's important to find your niche and have a good understanding of what is going on that can affect your niche.

Paper trading is your friend whilst you set up your framework and system. It will help you build your skill set until you can be consistent.

Cheers

Sir O,


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## alwaysLearning (6 May 2009)

MS+Tradesim said:


> And for the opening post, the worst thing that can happen to a newbie is for your first trades to be profitable. You'll think it's easier than it is, and you won't appreciate risk until you've been burnt.




OMG that is so true. It happened to me and it wasn't long before i was  constantly lol. Fastfoward a year of full time simulation and live trading and I am still  but getting closer to being profitable i think.


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## alwaysLearning (6 May 2009)

i feel the need to say this from experience.

open a demo account if possible. If you can't do that then write your trades out on paper.

Your aim should be to double your demo account.

Then open a small live account and double it.

Then trade with a more moderate amount in your brokerage account.

And by double I mean doing it properly and risking no more than 1-2% per trade. If you can do that then you have enough skills to trade profitably over the longer course IMO.

hah, and I'm still not profitable after almost a full year of full time trading study. Getting there as mentioned in my previous post. This stuff is not easy.


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## bumclouds (7 May 2009)

Sir Osisofliver said:


> You also need to have a clear understanding of which part of the market you are investing in and what drives that market.




So would an example of a "part" be like.. Info Technology?  or Health Care?


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## >Apocalypto< (7 May 2009)

bumclouds said:


> Hey guys,
> 
> I started trading about 3 months ago.  I have been reading these forums, and I read a book which is suggested often on here - Adaptive Analaysis by Nick Radge.
> 
> ...






Could be extremely dumb and painful!

As a Newbie you have enough problems with emotions with out having the added pressure to perform so you can make/meet the repayments.

I am not licensed to give any financial advice but Andrew I strongly advise you don’t do it. The potential downside far out weighs the upside.

Good luck.


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## Aussiest (7 May 2009)

bumclouds said:


> If my portfolio value kept declining...




You need to read some more about stop losses. The idea is not to let your portfolio decline (too much, would that be right everyone?), but to cut your losses *short * to preserve your capital (starting amount).

The other thing i've learned is that it is sometimes good to go in with small positions in order to get used to holding (not saying to hold into a loss, just saying to hold when your position looks good).


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## jono1887 (7 May 2009)

bumclouds said:


> So would an example of a "part" be like.. Info Technology?  or Health Care?




I personally find it easier to keep track of finance and materials/resources sectors... the main industries for the asx are Finance, materials, Consumer, Industrial, Energy, Telco, Healthcare

Theres a description of each sector here on the right of the page
http://www.asx.com.au/research/industry/index.htm


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## Kryzz (22 June 2009)

I have been looking into taking out a student deferred loan payment (NAB) to fund a trading account in the near future, no repayments of interest or principle would be required until completion of my studies (by which time i would hope i would have turned the a/c into somewhat of a profit , to cover interest + principal when the loan is payable)  

I suppose i would still consider myself somewhat a novice trader (maybe a step up from novice, whatever that may be), have been burned on a few options and stock plays and understand the importance of cutting losses short, and have paper traded on and off the last couple years and it is wearing thin now and am really eager to begin live trading properly. Would taking out such a loan seem like a stupid idea still?

Cheers, 

Shaun.


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## jono1887 (23 June 2009)

Kryzz said:


> I have been looking into taking out a student deferred loan payment (NAB) to fund a trading account in the near future, no repayments of interest or principle would be required until completion of my studies (by which time i would hope i would have turned the a/c into somewhat of a profit , to cover interest + principal when the loan is payable)
> 
> I suppose i would still consider myself somewhat a novice trader (maybe a step up from novice, whatever that may be), have been burned on a few options and stock plays and understand the importance of cutting losses short, and have paper traded on and off the last couple years and it is wearing thin now and am really eager to begin live trading properly. Would taking out such a loan seem like a stupid idea still?
> 
> ...




http://www.nab.com.au/wps/wcm/connect/nab/nab/home/personal_finance/21/71/2



> You can borrow between $500 and $20,000 for things like:
> 
> * Course fees
> * Text books
> ...




I'm sure trading doesn't fit into any of those categories... even the last one : Do you have someone to guarantee the loan for you? and how do the interest payments get calculated?

Its an interesting thought though.... if you can manage to get one, let us know. I woulnt mind getting one of those to trade.


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## Kryzz (23 June 2009)

jono1887 said:


> I'm sure trading doesn't fit into any of those categories... even the last one : Do you have someone to guarantee the loan for you? and how do the interest payments get calculated?




Haha true, maybe I want the money to buy a new car instead  lol, unsure if the loan needs to be guaranteed I would assume some security is needed, interest calculated from day loan taken out unsure if it's compounded monthly or daily

Shaun


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## ojm (23 June 2009)

Kryzz said:


> Haha true, maybe I want the money to buy a new car instead  lol, unsure if the loan needs to be guaranteed I would assume some security is needed, interest calculated from day loan taken out unsure if it's compounded monthly or daily
> 
> Shaun




I got the loan to get a car. Wasn't happy about getting it, but my circumstances didn't allow any other way (well, buying a different car and then changing it pretty quickly). 

You need a guarantor for the loan. If you are getting $10,000 or over, you need to see lawyers regarding the paperwork. If I remember correctly, interest calculated daily and added monthly. 

Also, if you say you are getting a car, they will only give you a bank cheque to the person/whoever that you are buying the car from. 

I paid mine back in 10 months, and it was a last resort. I wouldn't volunteer for it. And I definately wouldn't get it for trading. Seems like a bad idea.


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## jono1887 (23 June 2009)

why dont you apply for a margin loan instead? or a personal loan?
i dont think its a good idea to get a loan and let the interest compound daily against you with no repayments.... you could end owing a whole lot more than the initial amount.


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## ojm (23 June 2009)

jono1887 said:


> why dont you apply for a margin loan instead? or a personal loan?
> i dont think its a good idea to get a loan and let the interest compound daily against you with no repayments.... you could end owing a whole lot more than the initial amount.




You can make payments with the student loan. You don't have to NOT pay it. I paid mine off ASAP. 

Margin would be better than a loan (personally for me anyway).


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## Kryzz (23 June 2009)

Well looks like the NAB loan seems like it's out of the question atm then, I would have thought a personal loan for trading wouldn't be appropriate, just because the repayments aren't deferred and would simply eat into trading capital too quickly, havn't looked at a margin loan too closely at all, would of thought a student wouldn't have got approval for one anyway (assumption)


Shaun.


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## jono1887 (23 June 2009)

Kryzz said:


> Well looks like the NAB loan seems like it's out of the question atm then, I would have thought a personal loan for trading wouldn't be appropriate, just because the repayments aren't deferred and would simply eat into trading capital too quickly, havn't looked at a margin loan too closely at all, would of thought a student wouldn't have got approval for one anyway (assumption)
> 
> 
> Shaun.




You could still get the student loan if your looking to get capital somewhere between 5k-10k i suppose without them asking too many questions. I think its just when you go over 10k its when you need a guarantor ect...

How much were you looking to borrow?


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## prawn_86 (23 June 2009)

If you cant make money with your own money whats going to be diffferent with someones elses money? (Plus the interest you have to pay back)

Focus on building your wealth slowly and steadily, and if you use as little debt as possible while you are inexperienced you have less chance of blowing up


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## Kryzz (23 June 2009)

prawn_86 said:


> If you cant make money with your own money whats going to be diffferent with someones elses money? (Plus the interest you have to pay back)
> 
> Focus on building your wealth slowly and steadily, and if you use as little debt as possible while you are inexperienced you have less chance of blowing up




Was looking at borrowing somewhere in the vicinity of 10k.

Because i feel a primary reason for not being able money with my own money is due to a lack of it. I understand the idea of building wealth slowly and all, where do you draw the line though? Saving for a trading account for x number of years? to painstaking for me i feel


shaun


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## prawn_86 (23 June 2009)

Kryzz said:


> Because i feel a primary reason for not being able money with my own money is due to a lack of it. I understand the idea of building wealth slowly and all, where do you draw the line though? Saving for a trading account for x number of years? to painstaking for me i feel




No offense, but that makes no sense at all.

Your looking at borrowing 10k and paying interest on it, because you feel the thing holding you back is lack of money?? 

What happens if/when you blow up the account and owe more than that 10k?

Its like saying "I have only driven a couple times before, and dont have my licence, but im sure if i get an expensive car it will be easier to drive"


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## Kryzz (23 June 2009)

I was looking at stopping trading once a certain % of the capital is gone (which of course i will try not to do). Isn't a lack of capital a serious problem when beginning trading though? This is what i was trying to get around.

Haven't borrowed anything yet, and probably won't, just throwing ideas around. Just being impatient i guess, maybe thats a sign of my inexperience


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## prawn_86 (23 June 2009)

IMO you would be better working more and saving it up yourself and then proving you can make money in the markets before you go borrowing anything.

And practice practice practice in your spare time on a sim or paper trading


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## Ashsaege (23 June 2009)

If you are capable to make decent profits, then sure go for a loan.
If you can turn 15k into 30k, then i'd say go for the loan.

The time value of money concept is simple - 15k now is worth more than 15k in 2 years.

But if you don't have the experience and skill, then i wouldn't take out a loan.

IMO you do need adequate capital for trading. So if you got the talent, then take the loan. If you don't have the talent yet, then save and paper trade.


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## Cartman (23 June 2009)

Ashsaege said:


> If you are capable to make decent profits, then sure go for a loan.
> If you can turn 15k into 30k, then i'd say go for the loan.
> 
> The time value of money concept is simple - 15k now is worth more than 15k in 2 years.
> ...





thats about the size of it Ash! ---- 

Shaun ----  how good at trading r u ?  cause if u take the loan and stuff up, what then? 

seriously, if u reckon u r ok at trading, just open up a $1000 FX account and double it a few times --- if u stuff up u lose a grand --- if u r good at it u make 8-16 times yr initial investment ---simple


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## Kryzz (23 June 2009)

Cartman said:


> if u r good at it u make 8-16 times yr initial investment ---simple




Ah too easy, i better get to work then!


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## Cartman (23 June 2009)

Kryzz said:


> Ah too easy, i better get to work then!




lol --- if only it was that easy eh!!

the truth is though if u cant double a small account on a regular basis, having a large account wont help ---- 

skill first, capital second --- if u get the order wrong on those two u end up with *no* capital 

and ya cant play a piano concerto with no piano !!


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## Kryzz (23 June 2009)

Cartman said:


> lol --- if only it was that easy eh!!
> 
> the truth is though if u cant double a small account on a regular basis, having a large account wont help ----
> 
> ...




Cartman, appreciate your views and everyone elses also. How would you define regular basis, ie, double your a/c after a couple weeks/days? 

I was looking at opening a micro account, but chose not to after having some trouble with fx and position sizing (which i think i am starting to get my head around...just). Are u strictly speaking of FX?

 my main interest was in equities however, i have been mucking around with the oanda fx game for some time now and still getting a feel for it.

cheers, 

shaun


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## Cartman (24 June 2009)

Kryzz said:


> Cartman, appreciate your views and everyone elses also. How would you define regular basis, ie, *double your a/c after a couple weeks/days? *




if you are TH you can do it in a day  ---  i know ive *halved* a few accounts in a couple of days lol ---- 

Shaun, u have to forget about how quick yr gona make yr money ---  if u r new to trading, the only thing u need to concentrate on is how to *minimize losing* it  !!  ----- 

u have to become proficient at the trading "process" first --- 




Kryzz said:


> I was looking at opening a micro account,




good!

firstly though --- trade yr demo account till u get good at it

then trade yr micro account till u realise u r not really good at it after all :

go back to yr demo account and practice some more --- 

when u finally double yr micro account, repeat and rejoice 
(talking FX --- im not much good on equities) ---- good luck with it.


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