Day trading with bonus funds will help improve your account. We explore the promo and bonus deals at a variety of brokers from no deposit bonus programs to discussing why free things are typically not free at all. We detail available kinds of bonus, why fx trading rewards can vary, and which strategy will optimize bonus returns. We also show that the secret to rewards is to always read the terms and conditions.
What is a Bonus?
A bonus gives you free trading money and is usually given as an opportunity by a broker to draw in new customers who can then seek to transact with little to no risk.
There are various kinds of bonus packages and conditions to get the incentive paid out to your account. Those are listed below.
No Deposit Bonus
The “no deposit incentive” is the most lenient of them, because it does not allow you to deposit any funds until you collect the bonus. Normally a broker needs you to deposit some funds with them at least until you can get your bonus, but with a “no deposit” bonus they encourage you to get the bonus after a new account has been established.
Note that conditions will also have to be met before you can get your trading gains paid out, and those criteria may be more rigorous for this kind of incentive than for others. You usually have to exchange some total amount before you can remove the gain from the bonus money.
This makes a lot of sense, given how generous it is to give out free money to new traders. Before you sign up make sure you’re in agreement with those criteria.
A “welcome bonus” is a way of rewarding new traders who sign up for an account, making them feel comfortable and making it easier for new customers to start trading immediately. A welcome bonus can require that you make a deposit, so be sure to agree to the bonus requirements before signing up.
Deposit Match Bonus
The “deposit match bonus” refers to a percentage of your deposit, up to a certain limit.
For example, if the bonus is a match of 30 percent up to $5,000, and you deposit $1,000, you will receive an additional $300 from the broker ($1,000 * 30%). The highest you will get is $5000 with this example bid, which you can get when you deposit at least $16,667 ($16,667 * 30 percent = $5,000). But if you make more deposits than that, you’ll still just get the $5,000 limit.
Note – we’ve seen alternative interpretations of the maximum sum, where 30 percent match up to $5,000 would just mean that even though you deposit more than $5,000, you’ll only get the 30 percent paid out on $5,000. In other words, the maximum amount pertains to the max deposit from which you can earn the bonus of 30 percent, and NOT how much bonus you will get at most.
OBS! The distinction between the two maximum sum concepts can make a major difference for a serious trader, so make sure you understand the criteria before you sign up and deposit.
Most forms of bonuses have criteria on how much to trade before you can remove profits. This is okay for some traders, although it is a source of irritation to others.
Since many unscrupulous traders misuse bonuses, the criteria have inevitably become so stringent, that you may be better off without one. However, since you have to count in how much money you want to trade and how long you will wait before you make a withdrawal, it is difficult to provide individual advice.
A bonus will not make a big difference to many traders in the long run, and could make things feel more complicated and thus ruin the fun of trading. Just use a bonus if you actually believe it makes sense.