Broker bonuses - watch out for promotions

Often, brokers tempt clients with their "100% deposit free" promotions. Of course, it is not so colorful and the phrase "for free" is associated with certain conditions that must be met. This marketing ploy is very popular and is caught by novice players. What are such forex bonuses related to and what should be done to get real benefits from it?

Forex bonuses. What does this promotion look like?

The client receives a percentage of the deposit paid by the broker. And in practice? After the funds are deposited, another item in the Terminal called "Credit" or "Bonus" is added to the platform. The funds are already available on our account and theoretically we can use them, but only to a certain extent. Such a bonus deposit can be used as an additional Margin, which can be used to open a larger one transaction volume. Even so, possible losses will be covered first from our original deposit and only then from the promotional deposit. If we lose our funds, the fun may still go on but we will not withdraw this bonus so easily.

What do you need to do to withdraw funds?

Usually, the condition is to work out a certain turnover. In order to be able to withdraw every $ 5 of the bonus, you need to open 1.0 lots, and to get the bonus of $ 500 - earn a turnover of 80.0 lots. Very often there is an additional time limit, where we have, for example, one month for the generated volume from the moment the deposit is paid. Of course, if we do not meet the conditions, the bonus will be withdrawn and finally the "Free 100% deposit" promotion turns out to "Free 0% deposit".

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There are also promotions where the bonus funds are insolvent. This means that we receive a free deposit, however, it is used only to enlarge the available margin for opening positions. Such a promotion actually gives us nothing. This is only an apparent illusion of benefit because it comes out to be the same as we would simply increase the lever on the bill.

Pure calculation

With such additional promotional conditions, it is worth recalculating whether we will profit at all by receiving such forex bonuses. For example, if broker And he is organizing a promotion giving $ 5 per trade of 1.0 lot on EUR / USD and offers a spread of 2.0 pips, this means that our transaction costs will drop to 1.5 pips. In such a situation, is it not better to open an account with the broker B, which offers transaction costs on EUR / USD at 1.0 pips, however, does not organize an additional promotion? The so-called the illusion of benefits and the willingness to receive some kind of gratuity will ultimately result in us still going worse and overpaying.

Therefore, before luring yourself to this type of promotion, carefully read its terms and conditions!