Bonuses are quite popular in Binary Options trading, and as a trader, you will be offered a bonus from the moment that you register your account. They are used by CFD / Forexs brokers for various reasons including to attract new traders to sign up and start trading and also to encourage older traders to make more deposits and increase their trading activities. Many traders think that these bonuses are enticing but they are usually not what they seem. It is essential that you understand the terms and conditions of these bonuses before you begin to accept them. Knowing what they mean and how they work will save you from experiencing anguish as you trade or when you attempt to cash your bonus out.
Bonuses are not really free
It is the typical belief that a bonus is something that you receive for free. This is not the case with CFD / Forexs trading bonuses though. The bonuses often include significant terms and conditions. To begin with, there are bonuses which are only applicable once you have made a minimum deposit. These bonuses are often linked to your first bonus. Although a bonus may boost you to get started, you will find it difficult to cash out your bonus.
Withdrawing A Bonus
When you decide to withdraw your bonus, you will discover that the process is not simple or easy. Here is an example that explains withdrawals. Consider that you receive a 50% welcome bonus for opening an account where you deposit $200. This means that you can expect to have a total amount of $300 in your account available for trading.
If you decide that you want to make a withdrawal, including the bonus that you have received, you will find that you are expected to trade up to 30 times the volume of that bonus. This means that if you receive a bonus of $100, you must trade a total amount of $3000, and if your trades are successful, then and only then are you able to withdraw your bonus.
What most brokers do is to tie your profits to this bonus amount as well, so that if you make your profit on your initial investment of $200, you still need to trade up to $3000 to withdraw any profits. This forces you to keep trading larger amounts, even if you did not intend to in the first place.
Bonuses vary from one broker to the other
More than 90% of CFD / Forexs brokers will have bonuses available to promote the services on their sites. It is worth noting that bonuses, as well as their terms and conditions vary considerably from one broker to the next. Due to this you should not base your decision to use a broker on the bonus amount available, especially if the bonus is very generous. Instead, evaluate the terms and conditions. You would be better off finding a site that gives you a low bonus, but which allows you to withdraw with ease and on your own terms.
Bonuses can be scams or traps
When a bonus is so great, that you see yourself profiting tremendously by making a minimal effort, then it is likely that you are dealing with a scam bonus. Use your personal judgement to make an assessment and establish whether the bonus will lead you to a trap or not. Do not accept every bonus that is offered to you by your broker. Choose the lowest ones and focus on increasing your trading skills. Whenever you have any questions, take the time to communicate with your broker, preferably in writing, so that you can get clear information as to what to expect from the bonus.
Note that some brokers will not allow you to make a withdrawal once you accept a bonus, but a genuine broker will not lock up your funds in your account. Be aware that you may be prevented from withdrawal the profits if you accepted a bonus but did not meet the criteria required. Many brokers do not provide this information clearly, therefore, it is up to you to find out what conditions are placed on the bonus before you go for it.