How to Work with Forex Bonuses?

Hello, forex trader friends!

Earlier, we already wrote about various promotional offers from forex brokers, and what stands behind them. In short, bonuses are evil. In most cases, such bonuses are almost impossible to withdraw, because the terms require either a very large turnover or have other restrictions that do not allow you to make full use of the issued funds. The terms of the promotions are structured in such a way that the trader, in effect, pays for the bonus out of their own pocket, through part of the commission from executed trades. In addition, such promotions usually do not imply losing the bonus in case of a drawdown, or they provide for a significant increase in the stop-out level. In other words, the trader is given funds to open larger positions, but cannot use them fully.

But the years go by, traders get smarter, and more and more often companies offer bonuses and promotions from which you can truly get some benefit. Today we will talk about which bonuses are worth taking, what to pay attention to in the bonus terms, and how to use them PROPERLY in trading.

Gradually, companies are beginning to offer bonuses with more reasonable terms. If earlier it was almost unrealistic to get any benefit from such promotions, competition is forcing companies to create more attractive offers. Before choosing a bonus, you need to pay attention to some key terms by which you can assess the benefit of a particular offer for the trader and for trading itself.

Key points

Does the bonus participate in trading?

Most important of all is to assess the degree of the bonus's participation in trading. Does a tradable bonus not burn off when equity falls below the level of the bonus funds? If so, then such a bonus can be used both as margin and to pay for drawdown. That means it effectively increases your account balance.

Time to meet the requirements

As a rule, the terms specify the maximum time allowed to work off the bonus, after which the bonus burns in full. If such a restriction is present, it must be taken into account in trading.

Trading volume?

The main obstacle on the way to turning bonuses into "real money" is trading volume. The logic is simple: the more lots you need to trade, the harder it will be to withdraw the bonus. A big mistake is to make working off the bonus an end in itself. Nevertheless, if the trading system is designed for a high frequency of trades, a simple calculation will show over roughly what period this bonus can be recovered. When calculating, you should take into account the previous point, the maximum time allowed to work it off.

Partial release: is there such an option?

A major advantage can be considered the possibility of partial release of the bonus. In that case, the size of the bonus will directly depend on how many lots you have traded.

Withdrawal restrictions: are there any?

A bonus may either be withdrawable or not. It is important that the bonus in no way restricts the withdrawal of profit from the account. If any additional actions are required to withdraw profit, such a bonus should not be accepted.

Leverage restrictions?

Some types of bonuses may limit the maximum leverage. This is a very common trick because of which the whole point of using a bonus is lost, since using it gives no benefit to the trader. In such cases, it is better to give preference to a standard account type with higher leverage.

First of all, FORGET about trying to work off the bonus in full and withdraw it. This is unreasonable and absolutely not worth the effort, time, and risk involved.

In trading, a bonus can be used similarly to increased leverage. In essence, a bonus allows you to open a larger position size with the same amount of funds.

So, a bonus has been credited to your account. Suppose your deposit is 100, and the bonus is 30%. Now you have 130 in your account. What do you do? When opening a trade, calculate the trading lot as usual, for example based on a risk of 3% of the deposit per trade, but for the calculation take a deposit of not 100, but 130. In all other respects, trade as usual.

No huge lots, no extra trades to rack up turnover for working off the bonus; leave that nonsense to naive schoolkids.

When/if the bonus burns out, you need to recalculate MM taking into account the changed deposit size. That is all.

No-deposit bonus can also be used to your advantage. Despite the fact that it is even harder (practically impossible) to withdraw such a bonus than a regular one, it can be used to test order execution with the broker and to check simple trading strategies, and to train your trading skills. Here it is worth paying attention to the size of the bonus. If it is enough only to open just one position with the minimum lot, then it is unlikely that any practical benefit can be extracted from it.

How to rack up turnover?

If the bonus working-off conditions do not require some outrageous turnover, you can try to increase that very turnover. But do it wisely, without getting carried away with foolishness.

We trade manually as usual, without inflating risks. In the background on the same account, we run several advisors as well, also with reasonable risks. And we trade calmly. Worked off the bonus, good. Did not work it off, to hell with it.

This is the most adequate approach.

You should not make it your goal to fully work off the bonus. Strange as it may seem, this is not beneficial either to the company or to the trader himself. Any trading is associated with risks, and all bonuses are designed in such a way that they do not cover even trading costs. At the same time, proper use of a bonus can increase trading profitability. If the bonus implies full use of the funds provided, this should not negatively affect the trading process and may for some time help you earn a little more.

And how do you work with bonuses? Share tips with other traders in the comments!

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Respectfully, Aleksey Vergunov TradeLikeaPro.ru