What Is A Bonus?
The overall Forex industry is a highly competitive one with forex brokers struggling to gain as many clients as possible since a broker is gaining from commissions from the trades a client makes. One way to continuously attract customers is to offer them Forex promotions.
When it comes to the overall Forex trading industry, the retail part of it, this means ordinary traders, not institutions, represent only around five percent of the overall market. Forex broker is a middle man between the Forex market and the retail trader, giving him the possibility to access this huge market.
It is well known that the competition between brokers is an aggressive one as all forex brokers are struggling to gain as big a share of clients out of that five percent estimation. Therefore, they are competing in offering all kind of things to attract new clients, like forex bonuses.
A forex bonus represents an incentive for a retail trader to open an account with that specific broker that is offering it. There are multiple reasons why a broker wants to give you free money in your trading account, and before accepting a forex bonus, one should look for best bonus forex brokers available and chose from that list.
Free Forex Bonuses
Firstly, by giving you free money in your trading account, a broker knows that you will become familiar with the trading platform. Even if you will lose the amount offered as a bonus, it is more likely that you’ll continue to trade in the future or at least be interested in doing that.
If you already have an account opened at that broker, guess what will be the broker you’re going to deposit real money with? The one that offered the bonus in the first place, so there’s no need to waste time online searching for forex bonus deals anymore.
Secondly, by opening an account with a broker with the purpose of taking part in their bonus campaign, one gives the broker the opportunity to use his data for future marketing campaigns as it is clear that you have an interest in trading the forex market. This is a common practice among brokers that are offering a top FX bonus. This is why clients need to carefully read terms and conditions before accepting the bonus if they do not want to take part in future marketing campaigns.
If you are looking for the best free Forex bonuses, we advise you to put your attention on these ones:
Types Of FX Bonuses
Last but not least, if you search for the best FX bonus, you’ll find out that that are multiple types of bonuses a Forex broker can offer. Different types of bonuses are made since they appeal to different types of people. Since personalities are different and what works for someone is not working for another one, so a bonus may be appealing to a person while another person finds it useless.
What Makes The Best Forex Bonus?
When you look for the best Forex bonus a broker can offer, you have to know that the most unpopular one is the Forex pending bonus. This type of bonus cannot be used for trading right away. The one needs to trade with their deposited money first and complete the trading requirements for clearing the bonus before receiving it. For example, the broker will offer you a bonus based on the number of lots traded in a specific amount of time. After that trading volume is achieved, the bonus will be cleared, and you will be able to use the money as you wish, either further trading with it or making a withdrawal.
Such bonus means that a deposit is expected from the trader’s end, so this is the reason why they are not so popular.
One way to find out what other types of Forex bonuses are there is to look for bonus forex reviews and usually these are to be found on trading related forums. Human nature is very complex, and people have the tendency to look for quick earnings with as little effort as possible. Looking at forex related forums will give you an idea of what trading is and learning from other people’s experiences is a great way to form an educated guess regarding best bonus forex brokers overall.
Another appreciated forex bonus is the so-called forex instant bonus. Like the name suggests, a bonus is instantly added to your trading account, and you can start trading with it immediately, in the sense that you can use the supplementary leverage it offers.
It has a great appeal to traders as, for example, on a $5000 deposit, if the instant bonus is 20% of the first deposit, the trading account will be credited with $6000 immediately. The trading account at this moment of time will have 20% the broker’s money, and the rest represents your initial deposit.
However, it is not possible to withdraw the bonus unless a specific trading volume has been made. This, coupled with the fact that the bonus is attached to your first real-money deposit, doesn’t make it a best forex bonus type.
The no deposit bonus is indeed the one, and only bonus traders are looking for as like the name suggests, there is no need to deposit any money while taking advantage of the bonus. It has a great appeal to traders and as a matter fact to brokers as well as personal data will be used for future marketing campaigns as well as traders getting used to the trading platform and conditions the broker offers.
The biggest advantage here is the fact that if gives the experience of trading with real money, basically for free. There is a huge difference between trading on a demo account and trading on a real one as emotions are influencing the decision, and this is a good way to practice.
Last but not least, the reload bonus is usually being offered when the initial deposit and the initial bonus were lost, and the broker comes with this offer, basically offering another bonus if a new amount of money is going to deposit for trading.
It is a two-way street here as on one hand the trader should have already the experience from the initial deposit and this time definitely will trade more conservative, probably using money management rules that were not respected on the first attempt. If that is the case, then why not accepting the reload bonus?
Things To Look For
The brokers that are offering this kind of bonus are aggressive in selling but still good enough to fit in the best bonus forex brokers category.
Probabilities favour greatly that the first time a trader opens an account he/she knows little about trading and chances are the money will be lost. From this point of view, it is a wise thing to look for forex bonuses as it is like a free lesson offered by the broker and it is easier to access the market with real money and feels the experience rather than trading a demo account.
Not that trading with a demo account is wrong, no. It is a good thing, but at one moment of time one needs to make the move from trading a demo to a real account, and this is where best bonus forex brokers are targeting: to get these clients.
It should be mentioned here that the biggest hurdle in clearing the bonus is the trading volume needed for that to happen. That is not an easy task as the broker will make sure will have the minimum requirement quite high as if it gives you free money to trade with, then it should not be that easy for the bonus to be cleared.
But this should not be viewed as a disadvantage as the main purpose of the bonus is to have more leverage to trade and to attract traders to the real trading environment and leave the demo trading.
In a way, looking at the type of bonuses best bonus forex brokers are offering, one is seeing the type of trading personalities that are there. Aggressive traders can go as aggressive as they want with the no deposit bonus, as there is no risk of losing their money, while conservative traders have the opportunity to trade on the cautious side after accepting a reload bonus.
All in all, there is clearly a need for these bonuses when it comes to the offering of a broker and hopefully in time brokers will become more inventive, and other types of forex bonuses will be offered.
It will only add to the competitiveness of the industry and to the chase for the customer/trader that is going to trade constantly as the main bulk of a broker’s revenues is coming from commissions and these commissions are coming only if a trader goes on and trades on a constant basis.
There are of course many other areas forex brokers are competing for clients, but the bonuses arena is probably the most competitive one.