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Think twice before you borrow money to trade Forex

forex loan

Recently I have been analyzing sources of traffic to our website and I found out that a big chunk of it comes from search phrases like:

– forex loans
– borrow money for forex trading
– loan for forex trading
– forex investment loan
– online forex trading loan

and similar….

That reminded me my first steps in forex trading and big mistakes I made. One of the biggest one was taking a loan to trade forex which complicated my life for next 5 years. I do not want you to make the same mistake so I decided to write this article.

But let´s start from beginning

It has already been more than 10 years since I got attracted to forex trading for the very first time. You know it, internet articles promising easy double or triple digit profits per annum or even in couple of months. So I learned basics of forex trading, created my first trading strategy and rushed to test it on a demo account.

Of course I had a beginner´s luck and after 2 months I made a very nice profit. That was the worst thing that can happen to me! I did not need more, everything looked good, forex trading seemed easy and future looked bright. So I opened a real money trading account and started to trade. All went well again. The problem was that I did not have a lot of money to trade with so I was trading only microlots.  Unfortunately I wasn´t one of the most patient traders in the world. I wanted to get rich very quick, if possible overnight, so I needed a bigger trading capital.

My only option was to take a loan from bank. So I did borrow $10,000 to trade forex market. For many of you that might not be a lot of money, but for me it was. I transfered the money to my trading account and started to trade.

And that was the beginning of the end

Demo trading with virtual money was easy and stress free. But once I put my own (borrowed) money in line things have changed. Trading became a real pain for me. My emotions started to affect my trading decisions, I could not sleep, my eyes were glued to the monitor. I did not want to miss a single tick movement. When my trade became a loser I immediately wanted to recover my loss and jumped straight into another trade. I was altering my trading system all the time, chasing non-existing holy grail.

Simply said, I was making mistake after mistake. More losers I had more mistakes I made. My trading capital was shrinking and I could not think about anything else but how to recover fast and repay my forex loan.

To make the long story short, as you may already guessed, I have lost all borrowed money and had been repaying the loan for next 5 long years.

Conclusion:

If you are a successful forex trader with long enough track record and need more trading capital go ahead and take forex loan. Just make sure your gains are bigger than interest you will pay on the loan.

On the other hand if you are a novice dreaming to become a professional forex trader I do not recommend you to borrow money to trade. Take it step by step, learn to trade on demo, then test your skills on a small real money trading account. If you can tame your emotions and trade profitably for couple of years, only then you can start thinking about taking any investment loan. Not sooner.

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