There are two kinds of welcoming bonuses that brokers suggest to its customers, one is no deposit bonus when the broker is giving away free money to those who open an account with them, and the other is a deposit bonus. While the no deposit bonus is popular among traders because it does not require to deposit any funds, Forex deposit bonuses are popular due to the high amounts that you get in comparison to no deposit bonuses. The deposit bonus can be from 30% to 200% of your initial deposit or even more, it can be measured in USD as well, for example when you deposit a certain amount of money, the broker can offer up to $5000 as a bonus. This is a great opportunity for traders to have more money to trade with and many of them decide to go for it. However, everything comes with its terms and conditions and so does the deposit bonus. Unfortunately, the offering of deposit bonuses looks so good, that not many people are giving time to see what are the actual conditions of getting it. Hence, Forex bonus can become a curse as well as a blessing. I am not saying that bonuses need to be avoided at all costs. The opposite – deposit bonus is a great tool to elevate your trading if you know how to use it and if you choose one correctly. Therefore it is very important to know what is behind the attractive offerings of doubling your initial deposit.
Forex bonus on deposit – as the name suggests itself is a bonus that is added on your account. Let’s see an example. The broker is offering a 100% bonus. You open an account with the broker and deposit ZAR 7000 on it, you can apply for the deposit bonus and get another ZAR 7000. Now you have ZAR 14,000 on your account to trade with.
The rules and conditions of deposit bonus are different and depend on the broker, however, there are some general rules that are applicable to almost all of them. The bonus can be given to anyone, but you need to be eligible to receive it, there are not many requirements – first and foremost you need to be 18 years old and more to be able to open an account and receive the money. Second – your trading history needs to be clean, meaning no violations and funny business. The bonus can be applied only on one account which is connected to the IP address and household. Therefore you cannot receive two or more bonuses. If you try to trick the broker however, the bonus amount will be nullified and your history will be tarnished.
When applying for the bonus on deposit you should keep in mind, that the bonus money may look like a gift, but it is more of a favor from the broker. You cannot just have the money on your account, you need to trade with it. And here comes the conditions that can turn a blessing into a curse. Unfortunately, many traders get excited when they see the opportunity of receiving money on their account and do not read the terms and conditions thoroughly. Although the conditions may be 20 pages long, it will take you a lot more time and energy to repay the broker afterward, if you don’t read them. Therefore here are some of the most important things you need to pay attention to when it comes to knowing how Forex deposit bonus works.
Once you have received your Forex welcoming bonus you are required to trade with it. The broker sets the minimum trading volume. Let’s see an example. Remember when you deposited ZAR 7000 and received an additional ZAR 7000? Let’s continue from that.
Now you have ZAR 14,000 on your account. You need to trade on a scale that for every ZAR 14 that broker gave you, you are trading with ZAR 14,000.
For ZAR 7,000, total trading volume will be ZAR 98 million (7,000×14,000= 98 million)
Please note, the required trading volume can be more or less depending on the broker. It does not mean that the broker is trying to trick you into trading, the deposit bonus itself is for this purpose, and you can always say no.
Now as you have ZAR 14,000 on your account and you know you need to make the trading volume of ZAR 98 million. The broker cannot wait forever. You will be given a certain time to reach the trading volume. It can be from 90 to 180 days. The time factor is very important. You need to make sure you are selecting the bonus that gives you enough time in order to avoid stress.
As deposit bonus comes with certain requirement it has advantages and disadvantages as well. The main advantage as you could guess is, of course, the money. More money means that you can make more trades and get more profit from it. Moreover, the money given is not so small. Another great advantage is that you can control the amount of bonus money you get.
So additional money is great, but there are reasons why you should not consider taking Forex deposit bonus. While many brokers will make the deposit bonus a great idea for any trader – it is definitely not the case. The main disadvantage, of course, is trading requirements and the time limit. If you are a beginner trader it would be better for you to say no to this bonus for a while and try other means that don’t come with such strict requirements – for example, the no deposit bonus. While applying for the bonus you need to be sure that you can reach the needed trading volume in a given time.
Trading with Forex bonus on deposit requires devotion from the trader’s side. If you do not have enough time, will or any experience of active trading it will be better for you to either go for a small bonus or avoid it completely.
However, if you are confident in your skills, have some experience at your back and are willing to devote the time, then you’re good to go. But, before you rush in, you’ll need to find a bonus with the best conditions and requirements. Let’s determine that shall we?
No matter what you require from the broker, be it demo accounts, trader benefits or high leverage, you still need to choose the best one. The same can be said about the bonus, in order to get your hands on the best deposit bonus in South Africa, you need to consequently, choose the best broker available. Therefore, when you are searching for the best bonus conditions, its best to search for a good broker first. There are a lot of scam brokers that will make bonus offerings as attractive as possible to make you open an account with them. Therefore it is recommended to ignore the amount the broker offers as a bonus. In most cases, scammers are always trying to one-up their competitors by offering huge amounts like 500% or so.
My second advice is about the trading volume and the time that the broker gives you to reach it. Don’t worry if you see that a bonus has this requirement, it is common and nothing to consider as dangerous. However, some brokers might set simply unreachable trading volumes. If you see that the trading volume is so high that it is virtually unreachable, then naturally it is not the Forex bonus you want to take. The other thing is the time, usually, the brokers are offering up to 180 days, some might be offering even more. If the days you are given to trade with the bonus is less than 90 days while a bonus amount and trading volume is high – simply walk away.
Now we are down to one of the most important things you need to consider when taking the bonus – deposit bonus withdrawal conditions. This is something you should never miss when making a choice. Do you want to trade for 180 days and never get the profits? I am sure that it’s the last thing you want. Therefore check the withdrawal terms very carefully. With a deposit bonus, there can be three cases when it comes to the withdrawal – good, bad and ugly.
Good brokers logically offer acceptable withdrawal conditions. But first things first, you can’t withdraw the bonus, that’s a rule every broker has, you can only withdraw the profits made by that bonus.
Now let’s go back to our example, you have ZAR 17,000 on your account, your trading volume is ZAR 98 million and you need to reach it in 190 days. Good brokers make it possible for you to withdraw the profit you are making before you reach the trading volume, however, any withdrawal of your profits will result in a decrease of the bonus money. If you take all profits out of the account the deposit bonus will be nullified.
So for example, if you take out ZAR 1,000 from your initial deposit, an additional ZAR 1,000 will be subtracted from the bonus you were given.
Some brokers have really bad withdrawal conditions for the bonus, you need to stay away from these kinds of brokers as they are most probably scammers. Sometimes the broker does not give you any possibility to withdraw the profits from your account before you fulfill the trading volume. So imagine if for, 190 days you’ll struggle to meet the quota, to have it just taken away from you in the end if you don’t reach it. And even if you do, there is still a chance that they will just simply refuse your request. This is why it is very important to read the terms of using the deposit bonus Forex brokers are offering.
One of the worst conditions of withdrawal is the lack of said conditions. Yes! Many brokers just don’t tell you the conditions, or even if they do, it’s an entanglement of law and finance. If it is not understandable for the trader then someone is trying hard to keep it as complicated and tricky as possible. Hence, it should be a really huge red flag.
You should definitely take the bonus on deposit as it is the greatest opportunity that the broker is offering. However, you should take it when you are ready to devote time to trading and when you feel like you can benefit from it at most. Choose the best South African Forex deposit bonus with the best broker available in SA. Make sure you read the terms and conditions and understand it completely. Remember, the trading volume and time should not make scared of losing all of your bonus and initial deposit, it should be reasonable and achievable for you. This way, you will be able to make the best out of Forex bonus on deposit and make great profits.