Forex Brokers Bonus – Everything you Need to Know
Many Forex brokers offer bonuses and promotions in order to attract new customers. Forex bonuses come in many types and forms and the most common promotions are trading rewards and deposit bonuses.
What is a Forex Brokers Bonus?
A forex bonus is an incentive for customers who decide to engage with a particular broker. This is one-off campaign which aims to familiarize traders with the broker’s services, attracting their attention, getting them more involved in trading and helping new deposits.
Typically, these benefits are available only for a limited time and traders do not have any obligations. Therefore, if traders complete the requirements in order to get the forex deposit bonus, they will received an amount of money.
Types of Forex Bonuses
The most common types of bonus offer brokers tend to run are the following:
– Welcome Bonus
– No Deposit Bonus
– Deposit Bonus
– Rebate Bonus
#1. Welcome Forex Bonus
A welcome bonus is probably the most popular bonus used by Foreign Exchange Brokers. This type of bonus is very effective when it comes to attract new clients and is simple to run. Majority of brokers offer new clients the opportunity to open and trade with a demo account while this practice usually lasts 30 days, and then it expires. During those 30 days, clients practice with the demo account with the idea to convert from demo accounts to live trading accounts.
#2. No Deposit Bonus
This bonus is special because it gives you the opportunity to trade without depositing any money as the broker will fund your account with the amount of no deposit bonus offered. This type of bonus can benefit market participants who are hesitant to put their money at risk and would like to test a trading account. Lastly, they are only offered as one-time reward.
#3. Deposit Forex Bonus
Another popular type of forex bonus is the Deposit Bonus Promotion. This type is eligible for new customers and as a follow up step, traders should fund their trading accounts with a deposit. For instance a broker can give new customers 20% deposit bonus of up to $500 for their first $500 deposits. This kind of bonus campaign is an effective tool to move clients to higher account levels. In addition, there some additional fees especially for traders who need to convert their currencies to the account’s base currency.
#4. Rebate Bonus
This is a cash-back bonus which returns a specified percentage of the money invested. Traders get a part of their investment back, regardless of the trading outcome. Payment methods may vary among the Forex Broker. Some of the options is monthly cashback where payments are credited and sent automatically by the 12th of the month, following month rebates are earned in. There is another option spread or commission reduction. The trader receives reduced commission and/or spreads. Lastly, paid directly to the trader’s brokerage account, which typically is between 1-7 days after the trade is closed.
Terms & Conditions
Although forex bonuses can benefit forex brokers by acquiring new clients and enhance your capital you should always check for Terms & Conditions.
Terms and conditions reagrding the forex bonuses program it is around transcation size requirments. Brokers apply terms for leverage, trading instruments and strategies allowed. For example, a broker can promote “$30 welcome bonus” with the following requirments:
– Only XAU/USD and EUR/USD positions will be accounted for.
– Account leverage is set to 1:100
– No scalping and trading during the news.
Therefore, you will need to read them carefully as if you miss any of the conditions you can have serious consequences. For example, if you found that you violated the rules the broker can block your account and put you o their blacklist.
Bottom Line
Forex bonus programs have its pros and cons. You may receive some margins or free money however there are requirements as well as restrictions to think before you join. You need to understand carefully every rule of the bonus program as it can be very tricky at the end. It is better to avoid bonuses with terms and conditions that you cannot afford.
