WHAT FOREX BONUSES ARE REALLY BENEFICIAL FOR TRADERS?

More and more people are interested in Forex trading. And these are potential customers for companies that provide services to access the Forex market. Only in the Russian market of these services are hundreds of brokerage companies. Between them, there is fierce competition for attracting as many traders as possible since each client makes a profit. To win in the competition, Forex brokers try to offer the most favorable trading conditions, attract potential customers with various bonuses, discounts, gifts, prizes, and contests. All this is part of a marketing strategy. In each company, it is organized in its own way, but there are common signs. In this article, we will consider what bonuses brokers offer and what they give to the trader.

BONUS TYPES

A bonus from the broker is usually expressed in the amount of money that is transferred to the trading account of the trader. Bonuses vary in terms of receipt and methods of use. Often brokers provide a welcome bonus. Such a bonus is issued only once and only to new customers. Thus, the registration and opening of an account with a certain Forex broker is encouraged. The conditions for receipt may vary, but documented proof of identity is required. Welcome bonuses are accrued on the first deposit in a fixed amount or as a percentage of the account replenishment. Some brokers give a welcome bonus without a mandatory replenishment of the deposit. Usually, these are small fixed amounts. They are called Forex no deposit bonuses.

The bulk of bonuses is calculated as a percentage of the amount to replenish the account. Some brokers accrue a bonus only for the first replenishment, others for each replenishment of the deposit. The bonus percentage can be very different and ranges from 10% to 200% of the deposit amount. Often, a trader can adjust the percentage of the bonus on his deposit during a deposit. Each broker sets the conditions for using bonus funds at his discretion. Usually, a bonus cannot be withdrawn, but you can increase the margin at its expense and open additional positions. Although the bonus is not withdrawn immediately, usually brokers are allowed to withdraw part of the funds after performing a certain volume of trading operations.

There are two more types of bonuses that can be received without replenishment of the deposit. But for this, you need to fulfill certain conditions. Some brokers offer a bonus for attracting customers. This is usually called – “Bring a friend.” A company client who has invited a new trader receives a reward in the form of a bonus to the trading account. A more complicated way is contested for a demo. Winners of various contests on demo accounts receive prizes in the form of replenishment of a trading account. This money cannot be withdrawn but can be used for trading and withdrawing profits.

BROKER BENEFIT

What is the point of giving brokerage companies so many bonuses? Although, of course, no broker gives money that you can simply withdraw. For a no deposit bonus, the company simply buys a new customer. If a novice trader loses the bonus, the company does not lose anything, even if it does not continue to trade. If the trade is successful, then the client will increase the deposit and trade, making a profit. In addition, a no deposit bonus is usually given for a certain time, after which it is already necessary to deposit your funds to continue trading. Some brokers allow withdrawing income from a no deposit bonus only after replenishing a deposit.

Deposit bonuses, which increase the size of the margin, encourage the trader to open positions of a larger volume, that is, pay a larger commission to the broker. The system of wagering bonuses is also aimed at increasing the broker’s income. For each closed position, some part of the bonus becomes available for withdrawal. But this amount is much less than the commission paid by the trader. And in case of withdrawal of the deposit, the bonus amount is proportionally reduced.

TRADER’S BENEFIT

At first glance, any bonus is beneficial to the trader. But before accepting the bonus, you need to carefully study the conditions for its provision. Often the size and duration of the bonus are limited, and the withdrawal condition provides for a large number of transactions. In fact, this is just a discount on the size of the spread but organized in such a way as to force the trader to trade more actively. For example, if you look at the bonuses of the Forex club, you can find out that the welcome bonus, although it makes up 100% of the deposit, is limited to 10,000 dollars and is valid for 90 days. After this period, the bonus is canceled.

This is a typical case, such a scheme works in almost all bonus programs, differing only in the timing and size of the conversion. Typically, a trader is charged from 1 to 5 dollars for each full lot of trade. The broker receives from 20 to 50 dollars of spread from each transaction in one lot. There is little benefit for the trader here, but it can be lost if you withdraw the deposit before the bonus expires. In addition, there is a danger that the bonus will be canceled if the trader’s own funds drop to a certain level. In this case, bonus funds act only as an increase in leverage.

Really beneficial bonuses are those that do not need to be converted, have no expiration date and are involved in the drawdown. In other words, these are bonuses that have equal rights with the trader’s own money. This is extremely rare in the form of a welcome bonus. For example, Roboforex company gives each new client $ 30, which can be used in trade as your own. If you still accept deposit bonuses, then it is better to take a minimum that can be quickly converted.

FOREX BROKER SCORE ON THE BONUS PROGRAM

When choosing a broker, potential customers are not the last to look at what bonuses it provides. Interestingly, small and young companies offer the most attractive programs. At the same time, the Alpari promo system is limited to one or two bonuses. But this is the largest company in the Russian market of brokerage services. Instaforex, a large and well-known broker, provides a very wide line of bonuses and holds many contests. Therefore, one cannot judge the reliability or quality of the services of a broker based on his bonus programs. This is just a characteristic of marketing policy. Recently, bonus programs have been limited or simply prohibited by European regulators. Instead, brokerages are encouraged to simply provide customers with discounts on commissions.

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