Australian (ASX) Stock Market Forum

Borrowing - a dumb idea for a novice trader?

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jono1887 said:
I'm sure trading doesn't fit into any of those categories... even the last one :p: Do you have someone to guarantee the loan for you? and how do the interest payments get calculated?
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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
 
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
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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.
 
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.
 
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.
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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).
 
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.
 
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.
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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?
 
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
 
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
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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
 
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
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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?? :confused:

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"
 
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:eek:
 
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
 
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.
 
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.

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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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 ;)
 
Kryzz said:
Ah too easy, i better get to work then!:D
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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 !! ;)
 
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 ----

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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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
 
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?
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if you are TH you can do it in a day :eek: --- 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,
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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 :p:

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

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