Forex brokers often offer a welcome bonus to their newly registered clients. This is a sign of gratitude for the choice of their particular company. The bonus is usually reflected as a percentage of deposited funds. 10, 20, or even 100% of the money that a client transfers to the newly registered trading account get added to the main deposit with some special conditions applied to the usage of these extra funds.
Typical trading bonuses
The problem with sign-up bonuses is that they usually can’t be used for trading immediately and can’t be withdrawn along with the primary deposit at once. Typically brokers let you trade with the real money deposited and get the bonus funds activated only if a trader has lost all of the initial deposit. In this case, bonus serves for margin maintenance purpose only and prevents margin call under significant drawdown circumstances. If a trader manages to restore the account using bonus money, all the profits generated using this method remain on the account. They can be used for further trading or withdrawal.
AAFX Trading withdrawable bonuses
However, some forex brokers use a different welcome bonus policy that is much more beneficial for traders. They offer a withdrawable bonus, which means that every trader who makes the first deposit gets the chance to get a sufficient gain on the account. Sure enough, the bonus money can’t be released for withdrawal at once. This would have opened an opportunity to fund the account and cash it immediately, taking the broker’s bonus and giving nothing in return. No company can afford such generous giveaways, so they set conditions for the welcome bonus to get released.
These conditions are rather traditional. They include the minimum deposit size and a specific trading volume target to be reached for the bonus release. For example, the AAFX Trading welcome bonus is set to 35% for all the initial deposits starting at $500. The broker gives 60 days to complete the trading volume requirement. This volume equals the bonus size multiplied by 20 000. So when the trader funds the account with $1000, he gets a chance to get an additional $350 to account in case he trades $350 x 20 000 worth of assets during the first 60 days.
Bonus requirements explained
Seven million dollars worth of trades may seem to be an enormous volume for inexperienced trades. Yet, this is necessary to understand that leverage lies in the essence of forex trading. 1:50 or even 1:100 leverage for day trading most professionals would find appropriate enough. This means that one can trade up to 0.2 lots of the most liquid currency pairs per trade with only a $1000 deposit.
For example, if you trade 0.2 lots of EURUSD, you get $20 000 of a trading volume per trade. Considering that AAFX Trading counts both entry and exit for volume, just one round-turn of 0.2 lots for EURUSD will generate $40 000 worth of a trading volume. This way, a 7 million dollar volume requirement can be fulfilled with only 175 round-turn trades.
As long as the forex market is not open on weekends, this will leave a trader with only 40-45 working days to complete the withdrawable bonus trading volume requirements. Nevertheless, only 4-5 trades per day with moderate leverage can be enough to generate the necessary turnover on the account. This is important to note here that these are the average numbers, and they can vary depending on the trading style of a trader and his personal risk management strategy.
Having all the doubts about the trading volume requirements on withdrawable bonus release being realistic enough, let’s move on the 5 tips that can help you complete this challenge.
- Read the rules carefully.
Apart from the basic conditions, brokers might add some additional requirements that you must pay attention to. For example, they might ask you to do the first withdrawal no earlier than 60 days to be applicable for the bonus program.
This is also important to note if there are any limitations that may apply to generated trading volume. AAFX Trading asks the customers to close their trades no earlier than 60 seconds since the entry. The volume generated by Expert Advisor automated strategies does not count as well.
Rules like these are necessary to follow to avoid misunderstanding and disappointment, so read the agreement carefully and follow the instructions to get the welcome bonus safely.
- Calculate the risks and potential profit
Every trader has got an individual approach to markets. Some people open trading accounts for investment purposes. Others want to follow some trading signals from other traders, and manual intrusion into these systems can be undesirable for potential profits. Discrete traders may also have their unique trading style and approach to risk and money management.
The desire to get a welcome bonus creates the urge to break own trading rules, so that broker’s bonus withdrawal requirements get completed. It is important to understand that getting an extra 35% to account from AAFX Trading is impossible for long-term investors and algorithmic traders who use EA’s. The attempt to start trading more frequently or aggressively than your initial strategy suggests may lead to sufficient trading losses, which may not be covered with the size of a bonus.
However, as it usually happens in the markets, this is worthy to take the risk in some cases. For example, if the 60 days trial period is nearly over and you’ve got almost done with the necessary turnover requirement, you can take a 5% risk in some non-systematic trade to get a 35% withdrawable bonus. This is what’s called an excellent risk to reward ratio. It might be wise to do one or two aggressive trades in this case.
So from the very beginning, do you best to trade as you usually do and interfere in your system for the sake of the bonus only if the potential profit significantly exceeds the risk.
- Keep emotions under control and trade as you normally do
The best idea would be to consider a welcome bonus to be nothing but a potential surprise from your broker. Manual trading involves a lot of emotional pressure as it is. Chasing a welcome bonus can increase this pressure, which is important to keep in mind from the very beginning, as it can influence your trading results.
Try to forget all about the bonus. At least at the beginning of the trial period. Trade as you would normally do. In the end, trading is not a sprint but a marathon. Long-term results are much more important to focus on. The habit of trading systematically is worth much more than +35% or even +100% to account.