One great advantage of trading forex is the offer of bonuses on deposits by brokers. It can really give a very important boost to traders, regardless of the size of the deposit. A bonus is not only a token of appreciation for your business by your forex broker, but it increases the size of your portfolio and therefore the profit potential. What makes a bonus even more attractive is that once conditions are met, traders will even be able to withdraw the bonus. So it is not just a number added to your account after your deposit, but rather a loan which traders can earn full access to in the future or a reward for the loyalty to the broker by trading there.
Bonuses can range from fairly small amounts like 10% from your deposit amount up to 100% of it. In many cases the bonus for the very first deposit can be extremely high with some brokers offering up to 500% with follow on deposits less than that and usually below 100%. A bonus such as a 100% bonus will help out plenty of traders, especially new traders who make smaller deposits. There is a big difference if you start trading with $250 or with $500. The biggest difference is the lot size which a traders can trade with and therefore the profits which can be earned on each trade.
As a new trader reviews bonuses, nothing sounds better than a big bonus on the first deposit. There is almost nothing better than to be rewarded just for deciding to trade, almost nothing. The introduction of a no deposit bonus by plenty of brokers has taken the incentives to start trading to the next level. With this type of bonus, nobody has a reason not to consider forex trading as a serious income generating choice. Unlike a deposit bonus, where a trader will receive extra money on top of the deposit, a no deposit bonus requires no deposit at all, hence the name.
New traders can open a trading account, verify it and receive cash to trade in their new live account. This is not demo money, this is real money which traders can use to trade with. There are often limitations to the bonus, for example you can’t request a withdrawal of the bonus itself. You can withdraw your profits and in many cases you can even earn the bonus at which point you will be able to withdraw it. Losses are also kept in check and one fact which is almost certain is that at some point you will be required to make a deposit.
After the deposit is made, the broker will transfer all the profits into the account as well and they are the trader’s funds to keep. Regardless of how some trader’s approach a bonus, a no deposit bonus forex trading account is an account which should not be ignored. Even seasoned traders can greatly benefit from it. There is a saying that nothing is free which is true, this type of bonus should not be viewed as a free handout by a fore brokers in order to lure new account openings, but rather as an incentive to trade well and a chance to earn a loan given by the broker.
There are different reasons why and different ways to use such a bonus. A new trader may want to get more familiar with forex trading which makes such an offer a very attractive one. The new trader can start without risking any capital and trade in a live account. This is the best environment to gather knowledge which is very important for future profitability. It is similar to receiving money to attend university and earn a degree. No upfront expenses with all the upside benefits. What adds to this offer is not just the cash, but should a new trader perform well the earned money is the trader’s to keep which can be unlocked with a deposit.
Another way to make great use of a no deposit bonus forex account is testing a new strategy in a real account. The only way to make sure a new strategy or an adjusted strategy works is to trade the strategy in a live account which is also known as front-testing a strategy. This is much more effective than back-testing it which means applying it to historical data in order to see how it would have performed. A traders can take advantage of the offer and front-test the strategy without making a deposit. In case the results are positive, a deposit can be made and the profits received. Again this is a no risk and all reward option for new traders as well as advanced ones and should never be ignored.
Of course bonuses and incentives should not be the deciding factor as to where to trade or if to trade at all, but good forex brokers work hard in order to create the best possible trading environment. The better the conditions and assistance offered, the better the results for traders and this benefits the brokers as well. This is one reason why traders need to make the right choice when selecting a broker as the relationship will have an impact on results. With the great amount of offers available, there is really no excuse not to participate in the most liquid financial market and profit from it.