Advantages and Disadvantages of Taking a Bonus From Your Forex Broker

Losing money in currency exchange is actually quite easy.

Since there is little to no regulation and it can be taken on by anyone of any age who has less than $100 online, it is easy to get involved. More so, that ease of access and a false sense of security in the success of trades (bets), can lead one to blow through a lot of money relatively quickly. From that vantage point, whatever the best forex bonus is, is not going to matter. To correct that situation one needs to become a disciplined trader and get rid of any pretense for emotional investing.

For currency traders unaware, forex bonuses are simply gifts given to account holders as a way to drum up business with a particular broker. It is not unlike the good old days in which opening a bank account got the account holder a toaster or a rifle. Even today, a number of banks will give away freebies such as iPads or similar tablets for opening an account with them and using their services. However, just like with day-to-day banking, read the fine print and remember why they are giving away the freebie.

In currency trading, initially signing up a customer can be a huge financial windfall for the broker. The loyalty, familiarity, and ease of experience all come into play in securing that relationship. The trading platform and all of the bells and whistles will be a factor. However, imagine going to two different local banks, all else equal between their account offerings, one is offering a toaster and one is offering a tablet for opening a free account. You would probably take the tablet. Forex is no different.

In a world where all is equal in the currency markets, one could just take the best forex bonus and there would be no need for competing sites constantly updating users on the best forex bonus available at any given moment across the web. That’s not the case. Not all brokers are created equal. An initial bonus, often of $100 or more is nice. However, making sacrifices in regards to the reliability of your broker and their transparency for a little extra cash is not.

Taking a Bonus From Your Forex Broker

Therein lies the hook, line, and sinker. Most forex brokers know that most of their users are not going to think twice about signing up with them if they offer a great bonus. If you are still reading this though, you are not the average account holder.

First and foremost, look for transparency with your potential broker. How do others view them? What are the majority of reviews, long term? A variety of brokers can be fly-by-night businesses so avoid the hype with new companies. Reviews aside, check to see if there is any accountability or third party regulation. General speaking, forex is an unregulated market.

Brokers can choose though to enter into regulation through any number of regional or national organizations that will have oversight on their operations. A great broker would be happy to provide that. After making the list of potential brokers who meet those demands, then start looking for the bonuses.

With that in mind, what makes the best forex bonus? No deposit bonuses could be a great option for someone who is not a seasoned trader. This gives the option of practice trading, but with a very small amount of real money provided exclusively by the broker.

The trick is to stay within those boundaries though as losses in currency trading can exceed initial investments. Another great bonus to take advantage of would be the refer-a-friend or affiliate bonus option. Since forex is so unregulated and just about anyone can open up an account, it is worth mentioning to friends and readers of your blog or friends on social media.

A few new account sign ups could lead to flat out cash bonuses as well as percentage bonuses based on their subsequent deposits.

You may want to avoid certain forex bonuses. A good example are those freebies that many brokers throw in while opening an account that are hardly worth anything to anyone. They are usually a variety of ebooks or ‘courses’ filled with strategies and gimmicks. These are available all over the internet at no charge and to be honest, they’re not all that helpful.

Another bonus I would avoid are contests in which those with the best predictions are rewarded. Yes, traders should be trying their best to beat the market and place profitable bets, but these bonuses are hardly significant for the amount of trading and capital they require. Remember, whether or not we make money, as long as we trade, the broker makes money.

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