You’ve heard about Forex trading, and you’re now excited to get into the trading world. Upon starting the activity, you might notice that you’ll encounter deposit bonus offers from different brokers. It’s easy to get overwhelmed upon receiving all those offers. One thing’s for sure, however, s you’d certainly get some value for your buck while being rewarded after making deposits.
How does this work? For example, if you were to deposit $1,000, then some brokers allow you to trade with as much as $1,500. Nonetheless, not all deposit bonuses are the same. Even the most experienced trader might seldom forget about the existence of these bonuses.
Understanding the Forex Deposit Bonus
Upon opening an account with a broker, you’ll most probably acquire a certain amount of bonus. The Forex bonus is a way for brokers to increase trading volumes, attract more clients, and maintain a high retention rate for existing clientele.
This bonus helps compensate the expense that occurs when trading with a broker. Brokers make money by either on commissions or spreads. Furthermore, once you’ve provided the broker with a certain amount of income as your deposit, then the bonus becomes a present from the broker.
How Does the Forex Deposit Bonus Work?
To get the bonus, you need to make a deposit, and this part is pretty much obvious at this point. However, it is important to know about the bonus before you go through with any deposit. The mechanics of the deposit bonus are reasonably simple as it allows you to deposit money before you’re provided with the bonus. After which, you’re required to accomplish a certain trading volume to withdraw the bonus given to you.
The bonus also acts as a failsafe so that new Forex traders won’t withdraw the extra amount of money right from the beginning. In many cases, there are brokers who offer huge bonuses from the start. So the question floating around your mind right now is, “what is the trading volume required for me to withdraw the deposit bonus?”
The trading volume is measured in Lots, especially when you’re dealing with MT4 brokers. Common trading occasions require trading of about one lot for each $5 to $10 of the money found in the bonus.
This bonus acts as a stimulant to let new and veteran traders continue trading. It also inspires individuals to trade as often as possible. Many brokers can provide bonuses upon certain periods of completion. For example, a broker might require you to complete 25 lots within 180 days.