Top 3 Forex Deposit Bonus issues - secrets you are not told!


Many Forex brokers will offer you very enticing Forex Bonuses. However, not many of these offers are from Reliable Forex Brokers and have conflict of interest. Today, we talk about Forex Deposit Bonus issues!

AtoZ Markets "Deposit $500 and we will provide you with 50% bonus!" "100% Cash Back Bonus on your first deposit!" "100% Supercharged Deposit Bonus Promotion!"

Have you heard these lines? We bet you did if you are trading in Forex. Taking Forex bonus from your broker might sound not so harmful, however, there are some things we want you to know. And these "MINOR" points may break or make your Forex trading career.

Top 3 Forex Deposit Bonus issues

I would like to warn you in advance. Some of the Forex Deposit Bonus issues may arise immediately, some of them may appear even after 3 years.

The below is the opinion of Forex experts and it is in no way intended to distort your Forex bonus vision. However, I suggest using these points as the guideline for keeping your funds safe. It is better to be safe than sorry.

Want to trade Forex with a reliable broker? Open an account with any of the below AtoZ Markets approved forex brokers:

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Multibank Review
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Capital.com Review
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xm.com Review
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Forex Bonus withdrawal issues

Forex Deposit Bonus issues

Before I even start talking about  Forex Deposit Bonus withdrawal issues, let me mention something called "Terms and Conditions." These magic words appear everywhere, however most traders, I mean over 80% of traders will never read these conditions. What if the T&C is claiming that you are gifting your deposit to some charity? So, start reading your T&Cs.

Now back to Forex Deposit Bonus withdrawal issues. Of course, money does not grow on trees. So, if you are offered some bonus, the other party wants to get something in return. What is that "something"?  Let’s suppose you are about to deposit $1000 with a particular broker with 30% deposit bonus, and you would get $300 for this. In total, this would give you $1300 in your account. However, you cannot withdraw this amount.

WHY SO?

The broker won’t allow you to withdraw the funds now because now your money is mixed with broker’s money. Moreover, they have a contingent interest in keeping your capital in the account, since it acts as a cushion for their funds. But what if you want to change the broker? Nope. Not going to work – your funds will keep you stuck with this broker.

What to do if you can’t withdraw the funds?

The only way to actually withdraw the funds is to trade enough so the full Forex bonus is released to you. Normally, you would need to trade something like $10,000 or higher for each $1 of your Forex bonus. In the end, you would need to trade $3,000,000 or higher in order to get the $300 bonus. Needless to say, this is not a pleasant situation if you did not plan it.

However, the conditions vary from broker to broker. Moreover, some of the brokers actually allow withdrawing funds while you are in the "bonus accumulation” process. Yet, often you can lose the accumulated bonus. Also, your bonus can be pro - rated to the withdrawal amount.

Want to trade Forex with a reliable broker? Open an account with any of the below AtoZ Markets approved forex brokers:

98/100
Multibank Review
Visit Site
96/100
Capital.com Review
Visit Site
95/100
xm.com Review
Visit Site

 

Is it worth it? The value of the Forex Bonus

Forex Deposit Bonus issues

Let’s return to our example. We stated that you would need to trade $10,000 for each $1 of the bonus. However, where this already seems a bit too much, some of the brokers would set the amount of $100,000 (!) value of trading per $1 of bonus. This means, with your $1000 account you have to trade 300 lots, to unlock your account.

Now, let’s imagine that you are holding a mini lot of EURUSD, which accounts for $10,000 worth of currency, and the pair moves 1 pip. This would account for $1 increase or decrease in your account equity, depending on the direction of the move. So, we can assume that Forex bonus is only worth 1 pip of the mini lot trade. Taking the potential withdrawal issue into account, does making $1 per mini lot trade really worth it?

See also: How to find a reliable Forex broker in 10 steps

How long will it take you to get your Forex Bonus?

Forex Deposit Bonus issues

Following on the previous point, it is important to note that usually Forex Bonuses are aimed at the Forex Beginners. Another goal for Forex Brokers proposing Bonuses – traders with small capital accounts, who normally deposit $5000 or less. This leads us to the next point in our discussion about Forex Deposit Bonus issues - time...

In case you have a $1000 Forex account, even with leverage, it will take you a long time to trade $3,000,000 in order to withdraw your $300 bonus. If you manage risk properly and don’t risk more than 1 percent of your account balance on any trade, with $1000 account ($1300 with bonus) that means you can risk as much as $13 per one trade. In case you are trading a mini lot, you would want to take trades with an 13 pips risk (or less). You need to make 300 of these trades to make the bonus yours. Roughly speaking, these would take you as much as a year, if you place one trade per day. Coming back to our first point, what if you want to make a withdrawal in this period?

Want to trade Forex with a reliable broker? Open an account with any of the below AtoZ Markets approved forex brokers:

98/100
Multibank Review
Visit Site
96/100
Capital.com Review
Visit Site
95/100
xm.com Review
Visit Site

 

Moreover, what if you would want to make a 39 pip stop loss? In this case, you would be only able to trade a 1/3 of a mini lot, which is 3 micro lots, in order to manage your risk. Like this, you would spend much more than 1 year to make the Forex bonus yours. Do you still want to take this bonus?

The bottom line here is the lesser the amount you deposit with the broker, the longer it will take you to withdraw it. For instance, if you open an account for $10,000 and get the $300 bonus, you would be able to get back the bonus in just some month. However, we don’t say that if you are depositing more, the Forex bonus is beneficial for you.

Forex Deposit Bonus issues conclusion…

Forex Deposit Bonus issuesOne more time I want to highlight that we do not say that Forex Bonus is bad. Indeed, there are some traders with strategies built around bonuses. Especially, Japanese and Vietnamese traders are very good at this.

However, I believe that a number of Forex traders, especially beginners, are poorly educated about the mechanism of Forex Bonus. Thus, it is crucial to enlighten Forex traders about the realities of Forex Bonus. Looking back at the three points we have discussed, can you say that your opinion about Forex Bonuses changed?

In this last point, I want to tell you that not all of the Forex brokers that provide cash bonuses are bad. There are some reliable Forex brokers out there, you just need to be very careful. You can also see AtoZ Forex Approved Reliable Forex Brokers here.

Do not believe in “FREE CASH” bonuses that some broker offer – there is never anything free for you. In order to make sure you understand the conditions of a certain Forex Bonus, check the small print carefully. Moreover, some of the brokers might use sophisticated legal terms in the ‘conditions’ text in order to make the client confused. We suggest never disregarding such kind of things and using the help of professionals.

In case you are certain you don’t want to take a Forex Bonus, make sure your broker knows about your intentions.

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