Bonuses from forex brokers are quite common nowadays. Some are temporary, some are continuous. They are provided, first and foremost to attract more clients since there are extra benefits that can be obtained by signing up for a bonus.
Who isn't interested in extra deposits? Who would refuse a free prize?
No one would miss the opportunity to get bonuses for free. Unfortunately, they are always accompanied by terms and conditions, which, if carefully considered, can make the bonus no longer attractive.
But actually, there are several tips to help you optimize profits from forex broker bonuses. But before discussing the tips, let's get to know the most common types of forex broker bonuses offered today.
Welcome Bonus
As the name suggests, this bonus is a "gift" for clients who have just opened an account. This kind of bonus can be a very effective tool to attract newcomers.
The welcome bonus can be in the form extra first deposit or a no-deposit bonus. Whichever it is, the bonus only applies to the first deposit from a newly opened account.
Welcome deposit bonuses are usually offered in percentages, such as a 50% bonus, 30% bonus, etc. For example, Admirals offers new clients a 100% deposit bonus of up to $5000. Apart from that, there is also XM broker which provides a two-tier 50% deposit bonus plus an additional 20%.
On the other hand, FreshForex is a representative broker providing a no-deposit bonus. With this offer, you can open a Classic/Market Pro/ECN account without having to pay a single penny.
Deposit Bonus
Deposit bonus claims not only apply to the first deposit but also to subsequent deposits. This means that you can re-apply for the bonus in every deposit you make.
XM Broker is one of the brokers that regularly provides various deposit bonus schemes with the conditions above. This bonus is often promoted as an opportunity to double client deposit funds.
Trading Bonus
This type of bonus can bring in extra income just by trading as usual. Yes, there is no deposit to make or a new account to open. You just carry out trading as is, and the bonus will increase by itself.
This bonus looks very interesting because for every lot traded, you not only get the opportunity to profit but also get an extra bonus. One example is loyalty program. XM, which provides this bonus, allows every new client to immediately get "Executive" status and is entitled to a bonus of 10 XMP on each trading lot. This status can be upgraded so that clients can get more bonuses accordingly.
The basis of the trading bonus is actually to increase the client's trading activity. Therefore, using this bonus can be quite tricky especially if you are a conservative trader.
Other Bonuses
Extra profits are not only obtained from deposit and trading bonuses. You can also get more advantages from special promotions that do not directly provide bonuses in deposits or trading credits.
Fixed rate promotions are one such example. With this kind of program, you can always deposit and withdraw at a fixed rate. Octa and FirewoodFX are some brokers that have been offering this benefit for their clients.
How to Take Advantage of Forex Broker Bonuses
Don't the bonuses above look attractive? It will be even better if you can make the most of these bonuses, whether to increase profits or as extra credits. In reality, we cannot just get these bonuses because there are conditions to consider.
For example, InstaForex deposit bonus can only be withdrawn if the lots traded have reached a certain amount.
Does this diminish the forex bonuses value? For some traders, it may be so, but quite a few will still be interested to try them.
Even with the terms and conditions, you may still get the benefits if you pay attention to the following matters:
1. Be Smart in Choosing Bonuses
At a glance, it will be easier to distinguish bonus benefits from the size of the amount. A 250% bonus, for instance, will seem more attractive than just a 30% bonus. However, due to their requirements, forex broker bonus benefits cannot be seen from the amount alone.
You must be able to understand the conditions proposed to compare the two bonuses properly. If the withdrawal requirements for a 250% bonus turn out to be much tougher than the 30% bonus, which you still choose it?
The most important thing is that you need to ensure getting more benefits from the bonus after fulfilling the specified requirements. Therefore, don't just choose a bonus on the large amount. Understand the terms first, calculate the pros and cons, then determine which bonus is more profitable for you.
2. Consider Your Trading Strategy
Your account will be activated with special conditions if you apply for a bonus. These provisions are usually included in the bonus terms. As such, pay attention to any points related to trading conditions. Bonus conditions should not interfere with your trading plans, so choose a forex broker bonus whose conditions do not burden your trading strategy.
For example, check whether the conditions for getting a bonus allow scalping, hedging, or EA. If you have been using hedging methods for a long time, restricting the strategy can certainly harm your plans.
In addition, leverage for bonus accounts is generally limited. 55% InstaForex Bonus for example, only allows you to use a maximum leverage of 1:200. When compared with the highest leverage for non-bonus accounts in the broker which can reach up to 1:1000, the difference is of course quite glaring.
3. Focus on Profit, Not Bonus Withdrawals
This suggestion applies specifically to bonuses that require a certain amount of lots trader to withdraw the "bonus" itself. For example, you participate to get a 250% bonus at a broker. Trading profits from this bonus can be withdrawn without conditions, but not with the bonus. To realize the bonus amount, your lot must meet the lot requirement.
If you deposit $50, you will get an extra $125. The calculation to be able to cash out the bonus is $125 x 3 = 375.
So, to withdraw the $125 bonus, your must first trade 375 lots.
Instead of focusing on meeting that quota, it's better to try to turn the $125 credit into an additional margin. Remember that profits from the bonus can be withdrawn, so you can try to maximize the bonus by trying to trade as best as possible, not as much as possible.
4. Consider bonus as an extra feature, not your main target
Forex broker bonuses also have specific requirements on trading frequency. For example, loyalty status at XM broker will increase if you continue to have open trades for a certain period of time. This may not be a problem for active traders, but it's a different matter if you only consider confirmed signals before making a trade - they won't appear all the time.
In the situation above, what you need to do is keep following your trading plan. There is no point in violating your trading rules just to meet the bonus requirements. Keep the bonus as an extra credit, not something you have to earn. In this way, trading bonuses would bring you benefits, not a condition that drives the way you trade.
Conclusion
From the recommendations above, there is actually one common notion when it comes to dealing with forex broker bonuses: be careful with all the bonus conditions. If something is still unclear, you can ask the broker directly. This is important to ensure that you will not be disadvantaged by the requirements of the forex broker bonus.
When observing bonus conditions, also pay attention to potential profits and limitations. Make sure the terms won't change any of your trading plans or limit your strategy. There is no need to chase the bonus blindly. It's better to keep the risk of loss lower than the bonus number itself. Remember to always adjust the risk below the profit potential.
After learning how to use forex bonuses properly, you can confidently choose the best bonus from any broker that provides it. You can check the list of the latest forex broker bonuses here.