How To Use Forex Bonuses
Understanding the fine print is the key to using forex bonuses
Competition for clients in the retail forex market is very high. Therefore, to entice new clients to sign up and trade, many forex brokers offer some type of bonus which typically comes in the form of bonus funds added to your balance.
This isn't uncommon and there's plenty to be gained but only if you take your time to read the specific terms and conditions that the bonus money is bound by. They can differ greatly between brokers and some require a lot more trading volume to actually claim, so let's take a look at a few of the offers to see what the typical restrictions are.
The Plus500 bonus comes in various levels, depending on your first deposit. You can earn a healthy $10,000 credited to your account if you deposit $75,000 but there are smaller bonuses available at lesser deposit amounts. All bonuses become "withdrawable" after you accrue a specified about of "Trader points" which are earned on every trade. If this isn't met inside 90 days, the bonus is withdrawn from your balance.
If you were to receive the maximum $10,000 bonus with Plus500, you need to accrue 10,000 "Trader Points". Now let's see in more detail what this exactly means. According to the terms, different instruments have different point values. Taking forex for example, the AUD/USD pair grants 0.22 points per $1,500 AUD traded. If you traded $100,000 worth of AUD/USD (1 standard lot) you would earn 14.67 points. In order to reach 10,000 points you would need to trade 682 standard lots. Since you have to do this within 90 days, you would be looking at 7.6 trades each day, from the very first day you open an account.
In our opinion, this is a fair way out of reach for most traders, especially if you are new. We can only see this particular bonus being useful if you are already an established trader looking for a new broker. If you fit this category, read up on our Plus500 review to see if they suit your trading needs.
Next let's take a look at the XM bonus offers which are a little more varied. First, they offer a $30 no deposit bonus where the bonus amount itself can't be withdrawn but any profits made from the trading of these funds can. Pretty straight forward and good for forex beginners looking to get started. Their next, bigger bonuses depend on your deposits but they don't have to be claimed on your first deposit which is a good thing. In total, you can earn up to $5,000 in bonuses added to your account. The difference with XM is that there are no points that you need to accumulate in order to make a withdrawal. On the flip side, the bonus amount you received can not be withdrawn. Essentially, the bonus is like a loan that you don't have to pay back, but you can only use to trade with.
Our opinion is that the XM bonus is far better than Plus500. It's not as complex, you aren't required to rush through an unreasonable amount of trading volume and there doesn't appear to be a time limit. Read the XM review for more and why we rate them as the #1 forex broker.
There are many bonus offers available that you can take advantage of. Don't be shy about taking them up because it's all part of a marketing strategy to get new clients and you are the one to benefit from the competition. Make sure you read the fine print carefully and if you are not sure about anything, make sure you send an e-mail with your questions so that you have answers in writing.
Our advice would be to take up bonuses where there are no time limits because you definitely don't want to be trading for the sake of meeting bonus requirements.