All bonuses come with a little T&C warning (terms and conditions). Brokers are required to explain all the terms that come along with getting the bonus and under which conditions you are allowed to use the bonus and withdraw your profits. Make sure you know what the terms and conditions are before you’re in it. Even if the terms are strict, knowing what they are ahead of using the bonus will make the process smoother.

Considerations with Bonuses

It goes without saying that when choosing between different brokers, the decent bonus is a plus. However, it is important not to make this the only decisive factor in the decision-making process.

A bonus cannot help you if the trading conditions are not in your favor. A free $50 or an extra 50% isn’t enough if the leverage is low and the spreads are too high, and you don’t have risk management tools. Understand the bonus correctly and make sure the broker you choose meets all your trading requirements before being engulfed with bonus-excitement.

1. Leverage :

A bonus will be of no use if the leverage provided by your Broker is extremely low. Leverage multiplies the value of every dollar of the traders own money they invest. Leverage increases the financial capabilities of traders and, as a consequence, the trading results. With extremely low leverage, traders fail to enjoy this advantages of leverage.

2. Commission if any :

The fact of the matter is that there are several other factors that can have a sizable impact on the trader’s earnings. Firstly, one thing traders might want to avoid is the commission per trade. The standard fee typically ranges from $5 to $10. However, if the market participant makes even a moderate amount of trades per day on a regular basis, then this expense can eventually add up to a significant amount.
 
Therefore, earning a $500 as a deposit bonus is helpful; however, if it ends up consumed by the trading commission in a month, then this might not be that useful. Luckily, there are plenty of commission free trading accounts which traders can make use of.

3. Spread :

Another major consideration here is the size of the spreads. Obviously, this is an unavoidable expense, since the brokerage companies also need to earn some income. However, the reality of the matter is that brokers have their own policy on spreads. Consequently, spreads with some brokerage companies tend to be more competitive than others.
 
It is a relatively less visible expense for traders; however, just like in the previous case, it can make a significant difference in the long term. This is especially true for scalpers and day traders, who typically execute the large volume of trades within a short period of time.

Therefore, when you make a choice between a broker with tight spreads and meager bonus, and the one with wider spreads and high deposit bonus, it might be a good idea for traders not to rush into favoring the latter category. It is a better idea to choose the one with meager deposit bonus, but with much more favorable spreads.

 4. Quality of the service :

Finally, it is also helpful to be mindful of the fact that the difference in the quality of the service, as well as the reliability of the broker, is important. If a broker has poor quality service, with slow execution of trades and dealing desk, it can create a lot of problems for traders.
 
For example, traders might find some good entry or exit points for their trades, but they might get rejected by the dealing desk, or the platform might not execute the trade soon enough. It is understandable that a couple of seconds worth of delay, might not pose serious problems most of the time.

The quality factor should never be underestimated. If there is a choice with a broker with a sizable deposit bonus, but with poor execution of trades and a dealing desk, and the broker with less deposit bonus, but high-quality service, then it might be a worthy decision to favor the second option.

The fact of the matter is that traders sooner or later will spend their bonuses; however, they will still have to deal with the poor quality of trade execution by the broker. Consequently, it makes sense to make the quality a priority over the size of the trading bonuses.

Advantages of a Bonus

• Forex bonuses increase your trading equity and giving you greater control over your account
• You are able to trade with higher leverage
• Margin Bonuses allow you to trade with the broker’s funds and also can be used at times of margin call
• Rebates help you to increase profits
• It gives newbie traders a chance to test the experience of real Forex trading

Disadvantages of a Forex Bonus

• Apart from margin other bonuses cannot be used as margins. If the equity goes below your deposited funds then bonus will be removed automatically by the brokers
• No deposit bonuses have high volume requirements by some brokers which are really hard to meet

Sometimes the requirements of bonuses are not clear and you may end up losing equity. So every time it is important to read the terms and conditions of all bonuses