With the development of Forex trading, a lot of brokers emerged in the financial industry. They differ from each other in numerous ways. Bonuses are an important factor, which a lot of traders pay attention to before choosing a brokerage company. Without them, in the ruthless competition, it is difficult to attract more customers to your platform. Because of that FX brokers try as much as possible to come up with original ideas and promotions.
However, not every bonus can be trusted and either they are hard to meet or are scams. Some of them are only aimed to drain money from customers. In this article, we will tell you how to distinguish trustworthy bonuses from scams.
What is a Forex Promotion?
Forex bonuses and promotions are well admired by all kinds of traders. Basically, this is an offer, which grants individuals additional funds that they can use later for trading. The types of Forex bonuses vary from each other: these could be deposit bonuses, no deposit ones, contests, temporary promotions, etc.
Tips to Consider to Distinguish Bonuses
Before you go claiming any kind of bonus you should take into account several factors. Let’s have a look at some important details.
Check the Authority of a Broker
This is the first and most important aspect of any broker. When you decide to register on a broker’s website and check bonuses, always find out more information about a broker’s authority and license. Generally, trustworthy brokers will always offer good promotions to clients and fraudster ones will either have no license or no tangible experience working in the FX industry.
Read Turnover Conditions
Beginner traders tend to be inadvertent and not pay attention to the details of turnover. Sometimes these conditions are so high that it is impossible to turn the bonus money into cash and withdraw it later. This is another factor, differentiating reliable bonuses from scam ones. Sometimes you need to turn the money over 50 times, which is unrealistic. Normal brokers rarely set a limit above 10x.
Wary Minimum Deposit Requirements
Brokers that are fraudulent and want to drain money from their customers always set minimum deposit requirements for claiming bonuses. Basically, deposit bonuses require you to fill a certain amount of money on your balance to get the bonus. With suspicious brokers, the deposit requirements are too high sometimes. If you think that the amount of money is not normal, do not claim the bonus and leave it.
Forex bonuses and their disadvantages
As we have been talking about Forex bonuses and how to distinguish them from fake ones, it is necessary to have a look at other details as well. Since the advantages of special offers from brokerage companies are obvious, it makes sense to talk about the disadvantages of Forex bonuses, as well. According to experts, Forex bonuses available on brokers’ websites has the following disadvantages:
- The bonus reward cannot be used as a margin. The fact is that as soon as the balance falls below the critical level, the brokerage company will cancel the bonus payment
- Brokerage companies that provide a no deposit Forex bonus to an account usually put forward serious requirements for trading volumes, it is usually very difficult to satisfy them.
- In some cases, the requirements for wagering a bonus may be unclear, which can cause a beginner trader to lose not only the bonus but also his own funds.
- These disadvantages are precisely the bridge over which a trader can move from expected success to financial losses. Therefore, before using a Forex bonus, it is very important to carefully study its conditions.