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Should You Take a Deposit Bonus From Forex Brokers?

Everywhere you go, brokers are giving you a forex bonus. But before you take them up on it, consider the following factors. "Put down $500 and get $100 back." "We'll match your deposit dollar for dollar up to $1,000!" After all, a little more income may go a long way in your fledgling trading career. Refuse the FX broker's incentive. There are many explanations for this.

If you accept a forex broker incentive, you run the risk of having trouble withdrawing your winnings.

bonus forex broker

So, let's suppose you deposit $1000 into your forex account and get a $200 welcome bonus. While you'll have $1200 in trading money, you won't be able to take it out. 

The forex broker is unlikely to let you withdraw $300 for unexpected expenditures even if you have $1200 in your account. Why? Due to the fact that their money has now been included in yours. Your money is safe with them as long as you maintain it in the account.

"For each bonus dollar, you'll need to put up $10,000 in trades." Even while this statement seems to be widespread among the sites, some need as much as $100,000 in trades before even a single dollar of the bonus may be withdrawn!

What's the point of trading a small lot for $1 if you're worried about withdrawal issues? Gaining $20 by making 20 pip on the real (1 mini lot) transaction. With few exceptions, novice traders will swing trade to try to make a profit of at least 100 pips on a position. 

The difference between making $120 and losing $120 on a transaction is the number of pips you made or lost on the deal. It's easy to see how a $1 incentive on every $10k in transaction quickly adds up.

Even if it's only a tenth of a percent, just thinking about it may lead you to engage in more risky trading. As a result, the bonus isn't only worthless; it may really hurt your trade.

Why You Shouldn’t Take A Deposit Bonus?

For the most part, forex broker incentives are geared at novice traders or traders with modest deposits, such as those investing $5000 or less, more often than not. Even with leverage, trading $2,000,000 to withdraw (their own money plus) a $200 bonus would take most traders (who aren't full-time) a long time if they just have a $1,000 account.

If you're careful with your risk management and never trade with more than 1% of your account balance at a time, you can afford to risk $12 each transaction with a $1,000 account ($1200 with the bonus). In order to trade a small lot, you must take positions with a risk of no more than 12 pips (difference between entry price and stop-loss order). 

In addition to that, Forex bonuses are yours if you make 200 of these deals before the deadline. That's almost a full calendar year's worth of trading if you do it once a day. Now, if you create a $10,000 account and get a $200 bonus, things go a little more smoothly. 

The more money you have, the bigger the bets you can take while still keeping the overall risk of each transaction under 1 percent. You'll get your bonus a lot faster, perhaps within a few months. 

Traders who take advantage of this incentive, on the other hand, seldom invest $5,000 or $10,000; instead, they often deposit $100 to $1000. If you deposit $200 and get a $200 forex bonus, you will very certainly never be able to withdraw any of your money from the trading account. 

Trading the $2,000,000 in currencies will take so long that the learning curve will have depleted the initial investment.

So a bonus is beneficial if you make a larger deposit? No!

A forex broker bonus is probably a fraud now that you've read the preceding information. Not a dishonest one, but one that falls into the ethically murky middle ground. By offering a forex bonus, your broker ensures that you can't withdraw any cash, which forces you to trade with them until you're profitable or you lose your whole deposit.

Bonuses with fewer conditions may be available; they are the best of the best. These kinds of forex broker incentives are very hard to come by. The small print may vary depending on your circumstances and the broker you choose. However, as a matter of thumb... Take it or leave it!

When you sign up for a new account, be sure to specify that you do not want the welcome bonus. If you must, send an email or telephone the person. 

Having their money end up in your account will make things more difficult. And, in the end, the bonus is typically so tiny (in comparison to the possible profits or losses from trading) that it's not really worth it. Small traders benefit the least from bonuses since it may take them years of trading before they see any of their money.