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Crowdfund a trading account?
- Thread starter FXforex
- Start date
You cant raise enough money through crowd funding. You will have to borrow it, apply for a loan, or try an angel investor web site, or apply for a small business loan SBA 7 (a).
Quote from cmb:
Prop firms do search out capital or training fees from traders. But you do use quite a bit of the firms money to trade. The former firms known as Echo Trade sent me an email that said I could get as high as 30:1 buying power after trading was watched by the Risk department.
someone is giving you 30k to trade with for every 1k you deposit....even if they are taking a deposit, you are still trading a Sh*tload of their money
30k = 1K from trader + margin leverage (such as portfolio margin). Since not all traders use the leverage at the same time or since they could take positions that cancel out, a SPAN margin could get similar leverage if not higher leverage.
If there is a trader here who has 100K with a prop firm, I would be interested to read from him. I doubt such trader exists because he could use the portfolio margin to get the leverage.
For a reason unknown to me, I do not know why traders seem to think they can seek capital from prop firms, when it seems to me it is the business of prop firms is to seek capital from traders.
If there is a prop firm that does something different from my understanding, let them show up here and confirm it. I doubt anyone would show up, which would support the validity of my analysis.
Quote from simpletrade:
You cant raise enough money through crowd funding. You will have to borrow it, apply for a loan, or try an angel investor web site, or apply for a small business loan SBA 7 (a).
Why would SBA give a loan for trading, if it is viewed as a zero sum game that does not provide benefit to society and does not create jobs?
You set your trading up as an investment firm or hedge fund.
Quote from tradingjournals:
30k = 1K from trader + margin leverage (such as portfolio margin). Since not all traders use the leverage at the same time or since they could take positions that cancel out, a SPAN margin could get similar leverage if not higher leverage.
If there is a trader here who has 100K with a prop firm, I would be interested to read from him. I doubt such trader exists because he could use the portfolio margin to get the leverage.
For a reason unknown to me, I do not know why traders seem to think they can seek capital from prop firms, when it seems to me it is the business of prop firms is to seek capital from traders.
If there is a prop firm that does something different from my understanding, let them show up here and confirm it. I doubt anyone would show up, which would support the validity of my analysis.
You are mistaken there are many prop traders with over
$100k accounts, it seems you are thinking trading as just scalping. Scalping is just one small facet of trading and increasingly lesser so. Successful traders have multiple positions and those who trade pairs especially need larger accounts.
No prop firm will open you an account with just a $1k or even $5k, its just not worth their time. I am referring to those based in US, who issue K1 and are not sub entities.
Quote from tradingjournals:
Why would SBA give a loan for trading, if it is viewed as a zero sum game that does not provide benefit to society and does not create jobs?
The SBA doesn't lend money. The SBA guarantees 80% of the loan amount approved by private banks, under the aegis of being backed by the US Government.
Private banks like Chase, BoA, Citi, Podunk Federal, etc won't lend to individuals or businesses w/o sufficient liquid & real estate assets (read 100% of loan amount) to collateralize the loan. Collateral they can file a UCC-1 against. Collateral they can seize via court order. No collateral, no loan. SBA or no SBA.
For all intents and purposes, unless you operate in the *right* industry, have 100% collateral, have 2+ years operating history (and turned the corner into profitability), and/or are *bankable* (i.e a dentist looking to start/expand a practice, for example), you can forget about getting a business loan.
Getting a bank loan to fund a trading business w/o 100+% collateral - keep dreaming.
The reason being - the bank actually wants its money back.