This is a hotly debated topic in the forex world. Most forex brokers offer them and there are even no deposit bonuses. First let us take a look at what the difference is between a deposit bonus and a no deposit bonus. A forex deposit bonus is a bonus added to your account after your make a deposit, hence the name. These bonuses can be as little as 10% or as high as 100% and are at the discretion of the forex broker. A no deposit bonus is a bonus added to your account with a deposit so you can test the platform and place trades such as the $7 No Deposit Bonus offered by Paxforex.
Why are bonuses such a hot topic? The biggest reason may be the fact that they are misunderstood and this lack of understanding often leads to a false conception and sour relationship between trader and broker. A forex deposit bonus is not for the trader to withdraw after reception, but to assist the trading by adding capital which can increase profits earned. It can give new traders a much needed boost especially with smaller deposits and allow them to remain trading.
Are those bonuses legal? Yes, absolutely. A forex deposit bonus is legal and many take advantage of this bonus. Just because it is a bonus it should not be viewed as free money and strict risk management rules should remain in place. Some traders view this is a free run and place big trades based on hope for an increase in their accounts. Avoid this thinking at all costs. Take advantage of a deposit bonus and be smart with it. Traders who use those bonuses the right way can greatly improve their account performance with the added capital.
Are there terms and conditions? Yes, there are and before accepting a bonus make sure you read all of them so you know what you are adding to your account. Analyze the terms as you would analyze a currency pair before entering a trade. This will get rid of confusion and mistakes. Make sure you know what not to do in order to get your bonus cancelled by your broker which can happen if you violate the terms. Once you are aware and agree, get the bonus on your next deposit and enjoy added capital in your forex account.
When should you accept a deposit bonus? You should accept it after you read the terms and conditions, agree with them and want to grow your forex trading account over time. This means you do not wish to make withdrawals soon and are a series trader with a plan to grow. In many cases a withdrawal results in the cancellation of the bonus. In the beginning your goal should be to grow your account so you can trade larger lot sizes and make more money. Once you have achieved that you most likely have fulfilled the terms and conditions and can even withdraw your bonus.