What I see about bitcoin is its gonna bounce between 100-110k to 80-90k for a long time (at least until Trump takes over). I have an option to take a 2.8k $ loan from a bank and pay 3.4k $ in 8 months. (I'm gonna start paying it after 2 months so you may assume its 6 months). Should I get that loan and make 3x - 5x margin trades on Bitcoin with this strategy? I really appreciate your help. Take Care.
Securing a loan for trading is first of all a very bad investment. From my personal experience, 2020 when I was introduce to trading, after seeing all the opportunity in trading after 3 months of learning I loaned money from my elder brother and promise to pay back is 3 months time. I loss all the money. And I was not able to pay back. I have to look for another means to pay back the money. Considering the emotional and psychological aspects of trading it is not advisable to take a loan for trading.
when you're using loan for trading, you're essentially in minus APY, there's the need to pay the loan on time as well so there's additional burden meanwhile trading requires you to not be under pressure to prevent you from creating desperate decision that can lead to disaster.
basically using loan for trading = doomed to lose, especially for retailer, unless you're intending to take the loan because the price dipped so hard its the best chance ever for making an entry and you don't take too much loan that you can't afford, so it's true, basically it's a recipe for disaster, though not as bad as looping position or other word, leveraged position.