Forex trading is one of the most popular activities that attracts a lot of people. Whether we are talking about newbies or experienced investors, this is something that promises to earn a lot of money with proper knowledge and determination.
The most popular criteria when newbies choose a brokerage company are Forex trading conditions and bonus policy. Bonuses represent an increase in the balance of a trading account. At the same time, newcomers often do not take into account the company’s experience in this area, and do not check whether it has a license.
Types and classification of bonuses
When we talk about Forex brokers, there are various types of bonuses that users choose upon registration. We will have a look at some of them. While the concept of bonus itself is pretty broad, some bonuses may not be present below.
No deposit bonus
No deposit bonus is rare, but it is one of the most attractive types of promotions. The investor trades, but does not invest his own money. These are profitable bonuses of Forex brokers for beginners, as there are no risks in this case. You should find out the features of the withdrawal of funds, the possibility of withdrawing money without depositing personal finance. Normally, the amount of initial funds is small.
Welcome Bonus
After the investor makes the first deposit, the welcome bonus is credited. Any Forex broker with bonus that allows users to claim additional money for trading, sets the size of the incentive up to 100% of the amount of the deposited money. The disadvantage is that it is very difficult to cash them out since you need to make a certain volume of trades in order to be able to withdraw funds.
Bonuses for every deposit
The size of such bonuses is no more than 25% of the invested amount of money. After you have made the first deposit on your account, a particular broker will allow you to earn additional money for subsequent deposits. This one like no deposit bonus is rare too and has specific requirements before you can withdraw money.
Special offers
These bonuses are limited in time. So, if, for example, an investor makes a deposit on a specific date, then in the following months, the spread or commission will not be debited from his account. This is a fairly profitable type of bonus, with practically no risks.
Compensation for incurred losses
The investor receives a certain percentage of the lost money. Sometimes, in this format, brokers award loyalty bonuses. For this, you need to be an active client on the broker’s website and conduct trades regularly.
What are the disadvantages of brokerage bonuses?
There is no “free money” in the field of online trading. The bonuses listed by Forex brokers represent special investments by companies. They are designed to increase the target audience, increase popularity among investors.
The overwhelming majority of newcomers do not familiarize themselves with the user agreement on the subsequent development of the received bonuses. The funds received will need to be traded, otherwise, it will not be possible to withdraw the funds. This is the disadvantage of brokerage bonuses.
It is necessary that the trading volume of the account exceeds the bonus amount by several tens of times. For novice traders, this condition is impracticable, for experienced traders, it is difficult to implement.
As a result, investors either stop trading or drain the deposit in their attempts to quickly increase the trading volume to the set level. Do not flatter yourself if an additional profit of 200% is spelled out in the bonus column. No brokerage company plans to donate money just like that.
If a broker offers bonuses, first familiarize yourself with the terms of trading, and then think about whether they are really needed. Then you should decide whether to accept the bonuses. The most common reason for rejecting withdrawal requests is a violation of the bonus accrual policy.
Summing up
The bonus policy attracts a lot of attention from novice traders. In total, there are several types of accrued bonuses – compensation for losses, special offers, bonuses for deposits, welcome or no deposit bonuses.
However, bonuses have drawbacks. Brokerage companies use them not to enrich the trader, but to increase their client base. Novice traders should carefully study the conditions for working out bonuses – if they are violated, the application for withdrawing funds will be rejected.