A Forex Deposit Bonus – A Great Way to Start Your FX Trading Adventure

Look at any one of the many Forex brokers trading in the market today, and it’s very likely they will all be offering various attractive bonuses. There will be bonuses for new customers, to attract their attention and encourage them to open an account. But there will also be a number of bonuses for regular traders, designed to encourage loyalty. Many people, in fact, decide on a broker by comparing various bonuses, but after reading some of our pages you’ll appreciate there is much more to choosing the right Forex broker.

Here on this particular page, we’ll be concentrating on Forex deposit bonuses. What they are. How to get them. And some advice on finding the best.

What is a Forex Deposit Bonus?

forex deposit bonusFrom time to time, most Forex brokers offer Forex deposit bonuses to both new and existing clients. The amount of the bonus is usually expressed as a percentage of the deposit you make, and varies across the board. It could be 5%, 15%, maybe even 50%, but you can be sure that most brokers will offer them on a regular basis. Say for example, the broker is offering a 30% deposit bonus. If you deposit $3000 in your account, after applying for the offer, you’ll have $3900 trading capital to work with. Sounds pretty good? Of course it is, because with increased trading capital your trading account equity is raised, thereby allowing you to hold your positions open with a higher margin level. This increased equity also allows you to trade with bigger lots/positions.

The deposit bonus should be seen as for trading purposes only, as it is added as a non-withdrawable credit which enhances trading ability or strategy. We’re not saying you won’t be able to withdraw the Forex deposit bonus, because there are some brokers who allow it to be withdrawn. However, many will have certain requirements in place. The most common being the need to trade a certain amount of lots before qualifying to withdraw the bonus.

But in this life, is there ever anything that’s completely free? Certainly not money!

How does a Forex Deposit Bonus work?

It is common practice for Forex brokers to use the ‘Margin Bonus’ or ‘ Rescue Bonus on deposits. This means that the bonus is used as trading equity. If equity is lost, the loss is deducted from the bonus as well. Let’s give you an example:

You deposit $100 with a broker that offers a Forex Deposit Bonus of 20% as a rescue/margin bonus. Your trading balance will now be $120. Say you make a loss of $20, 20% of that loss will be taken from the bonus. 20% of $20 is $4. The total amount now available will be $100 minus $16, which equals $84. It is worth mentioning here that the more you deposit the better your margin will be.

Brokers also offer a volume bonus on deposits. If you plan to trade in high volumes this is one bonus to look out for. Some brokers offer a Forex Deposit Bonus of as much as 100%. The bonus is added to your account, but a set volume of trades will have to be met before you withdraw the bonus. The set amount varies from broker to broker. Withdraw before the set volume is met and a large percentage of the bonus will be taken away as a penalty.

Forex Deposit Bonuses are aimed at active traders

When you’re an active trader it makes sense to get as much bang for your buck as possible. If you are currently trading with a broker that doesn’t offer a deposit bonus, you’re missing out on a big chunk of cash.

If you’re a newbie, and not really serious yet about Forex trading, a deposit bonus isn’t going to be much of an advantage. It’s likely you won’t be able to meet the requirements or use the rescue bonus in a big way. A Forex Deposit Bonus is really only for more experienced traders. Those who are active in the Forex market.

No deposit bonuses are a much better option for beginners. Or you could try and get a free demo account, which will allow you to get comfortable with the trading environment before you risk your own money.

Finding the best Forex Deposit Bonus

There are many brokers touting their wares online, and every one is different. The difference may only be slight, but picking the right one can make a big impact. It is very important that you understand how the bonus works before you sign on the dotted line.

A common problem is that people don’t fully understand the details of the bonus, and feel ripped off. All it takes is a few extra minutes reading the small print and reading as much as you can about the bonus before signing up. If you are at all unsure, or have any questions, contact the brokers support team who will happily explain all the details of their own deposit bonus.