If you are into forex, you have most probably seen a lot of flashing ads with 20%, 40%, 60% and even 100% Bonus. Should you go for it or stay away?
Some brokers do not offer any deposit bonus. Such brokers usually try to provide you with superior service, great & custom trading platforms and amazing opportunities to become a fund manager. Conversely, there is a type of brokers that are trying to lure you into trading with them by offering a deposit bonus deals.
An average bonus for 2014 has remained to be around 30%, while there are some brokers that are offering 100% deposit bonus or even more. In this article we will uncover the truth about deposit bonuses, explain how they really work and tell you the best practices when it comes to forex bonus trading!
Deposit bonuses have different types, mostly you can differentiate the bonuses into:
Equity bonus generally becomes your own property, which cannot be withdrawn before a certain amount of trades is completed or cannot be withdrawn at all. However, this type of a bonus can be used to cover trading losses.
Credit bonus simple lets you use funds as a part of your margin and lets you trade higher volumes. In other words, it provide you with higher leverage and gives you stop out level somewhere around 0%.
As a rule, bonuses could be divided into withdrawable or non-withdrawable. First type of bonuses can be transferred to your ownership, while the latest is just staying on your account.
This way you get to choose the most suitable offer for yourself.
So what bonus is right for me?
If you are planning to make disciplined trading with strong money management, then you should calculate your expected monthly volume. Then you should look for a withdrawable bonus, no matter it is balance or credit. As you will be using money management rules, you would not need to care much about stop out levels. The main idea is to get a bonus offer under favourable conditions.
It is important to get the maximum % of the bonus, yet it should be achievable easily with your current trading strategy. It is much better to cash out 25% bonus than to let go a 60% because you haven’t completed a minimum required volume. Best practice is not to get a bonus where trading volume exceeds 80% of your expected maximum trading volume. Generally, the size of the bonus matters a lot. If you are looking to become a forex pro, then the smaller the bonus is, the better.
Is it applicable to everyone?
Not really. As there are some people that are trying to use very risky strategies, like gambling on NFP or market opening prices, large bonuses can get quite useful here. However, for simple traders large bonuses are not recommended.
This article is supplied by Forex Bonus Lab. Visit forexbonuslab.com to find out more about forex brokers, trading tips, bonus trading strateguies & more!