For beginners and experienced traders alike, they all enjoy the bonuses offered by the forex brokers. Today, I’m writing this article to give you all a clearer understanding of forex account bonuses as well as how to make the most use of it. Our article today will be following these various points:
- Types of forex bonuses
- Bonus withdrawal
- Disadvantages of each type of forex bonuses
- Recommended brokers
- Popular bonus cheating ways
Experienced traders are often against bonuses as most brokers who offer bonus are usually small and untrustworthy, however bonuses are still too great of a perk to ignore and should be paid more attention to. To start it off, let us discuss the types of forex bonuses:
1. Types of forex bonuses
There are 3 types of bonuses total: the welcome bonus, the deposit bonus, and the lot back bonus.
Welcome bonus, is, well, the bonus that most brokers would offer when you first register your account. The bonus amount can range from $30 to $50 and is often quite hard to withdraw because of the strict policies that come with it. Nevertheless, this is still one of the first bonus that you can get and can be exploited.
Deposit bonus is the type of kind of bonus that is based on your deposition, usually only applied on your first deposition. The bonus amount is based on the percentage of your deposition thus the bigger your deposition is, the bigger the bonus. The bonus amount can vary from 20% to 100% of the total deposition.
Lot back bonus, or loyalty program, is the type of bonus that is based on your commitment/loyalty to the broker. This bonus is especially attractive to long-time traders as it reduces your trading costs greatly. The bonus amount is largely based on trading currency, account type and how old your account is.
XM’s spread for EUR/USD is 1.4 pip, and they will lot back $3 for each completed trading lot. It means you only pay $11 for each EUR/USD lot instead of $14 of the original spread.
2. Bonus withdrawal
Now that we’ve finished the section about types of bonuses, you might be wondering about whether or not you could just cash out the bonuses directly. Well, there’s a condition to it as explained below:
- Having completed a certain amount of lot trading
You must complete a certain amount of trading before you can actually withdraw the bonus. For example, to withdraw a $50 bonus, the broker would require you to have traded at least 10 lots. However, you shouldn’t be worrying that much as the bonus itself doesn’t expire and you can just withdraw it later on.
There are even brokers that would straight up forbid any kind of direct bonus withdrawal. However, they’d still allow their traders to trade using the bonus money and gain profit from it, and then you could still withdraw these profits. It’s a strict policy, but it makes sense since there are lots of traders who would take advantage of the bonus programs.
3. Disadvantages of each bonus type.
It goes without saying that there should be disadvantages to each type of bonus, for example:
- Limited amount. The maximum welcome bonus you could get is $50 and that alone isn’t a lot.
- Strict withdrawing policies.
- Mostly promoted by new, untrustworthy brokers
- Strict withdrawal policies.
- Direct deposit bonus withdrawal is not available in most brokers.
Lot back bonuses:
- Not as profitable or beneficent for new traders.
4. Recommended brokers based on their bonus programs
For those of you who’re still wondering about which broker you should choose based on their bonuses, here’s my recommendations:
- Best welcome bonus: $30 welcome bonus – XM
- Best welcome bonus: $50 welcome bonus – FBS.
- Best deposit bonus: 100% deposit bonus – XM
- Lot Back Bonuses: Rebate 2 – $16 per lot – Exness
5. Popular bonus cheating ways
I’ve partly mentioned earlier that lots of traders take advantage of the bonus programs, and by any chance should you want to learn about it, here’s a few of the cheating methods that I’ve gathered for you:
- The first cheating method is based on creating multiple accounts to take advantage of the welcome bonus. In fact, the second cheating method would be about taking advantage of the welcome bonus too, just in different ways. The main thing that you’d have to do in this first method is you need to hedge 2 new accounts together, which means letting 1 account wins and the other loses to balance out the win rate. This method should only be done on brokers with loose security and withdrawal policies.
- The second method is mostly the same as the first one, the only difference is that in this method, you’d need to take advantage of brokers with high leverages to open big trading positions. You’d also need to hedge 2 new accounts together, same as the first method, to ensure that your win rates stay at 50%. For this method, you’d want to pick a broker that offer high leverages.
In conclusion, I hope that I’ve offered you sufficient information about forex bonuses. Please email me if you need have any question and good luck trading!