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Rebate and deposit bonus are two forms of rewards provided by brokers as a part of their promotions and special offers. How to choose the best out of the two?
Forex rebates enable traders to earn extra money from their trading irrespective of whether they close a position in a profit or loss. The cashback program can be made available by either the broker or a third-party provider that is linked to a trader's forex trading account.
To benefit from a forex rebate program, a trader needs to signup with a broker and open trades. But if the rebate provider is from a third party, they need to register from an affiliated link from said party. The trader will then begin to receive a cash rebate from the forex rebates provider for every trade executed by the trader regardless of whether the trader wins or lose. Forex rebates are counted after a trading position has been closed and are paid regularly, either on a weekly or monthly basis.
Forex rebates can be very beneficial as traders will be getting compensation for every single lot that they trade. Also, there is no complicated set of requirements that traders need to meet to qualify for rebates. In terms of bonuses and promotions offered by forex brokers, rebates are one of the most popular.
Meanwhile, a forex deposit bonus is a bonus that is closely linked to the deposits made by a trader and it is available to all clients of the broker offering such a promotion. However, there are certain conditions attached ranging from the amount of deposit to complex withdrawal policies. A forex deposit bonus is usually measured in percentage. For instance, if a client is offered a 50% deposit bonus and then makes a deposit of $500, the client will have $750 for trading.
Which One is Better?
In my opinion, a deposit bonus is much better because rebates are not of great use to traders. While rebates may look appealing, most times, they are merely proportional compensation for the expenses incurred when trading. Usually, the size of a rebate tends to be small which means trading with a broker that provides rebates allows the trader to essentially save just a small part of his/her funds.
On the other hand, a deposit bonus provides a much more significant benefit with deposit bonus offers ranging from 10% to larger figures of up to 100%, although with deposit bonuses, traders also have to be careful because bigger is not always better. In many cases, choosing a smaller bonus offer might be better than going for a large one.
When choosing a bonus option for depositing funds, traders should focus more on the reliability of a broker and less on the size of the bonus. Opening a forex trading account with a regulated broker that has a small percentage of deposit bonus is better than opening an account with an unregulated broker offering a large percentage of deposit bonuses, because it is highly likely the trader will experience problems when trying to utilize the bonus.
Summary
The high level of regulation that brokers are subjected to nowadays means there is a limit on the kind of bonuses and promotions that they can offer to traders. Still, traders need to carry out their due diligence before opening an account with a broker. Deposit bonuses are better as they hold more practical benefits than rebates, but traders should remain vigilant about brokers that promise large amounts of deposit bonuses as that might just be a ploy by an unregulated broker to get more clients.
6 Comments
Lora
Nov 28 2022
Yoga
Feb 27 2023
Lora: It depends on the particular broker you are dealing with and the terms of your agreement with them. Some brokers may require a bonus as a condition of receiving certain benefits or promotions, while others may not have such a requirement. But most of them, deposit bonuses must be deposited for free with a certain amount, but can be withdrawn if the bonus is unused or has a time limit.
It is always important to carefully review and understand the terms and conditions of any agreement you enter into with a broker, including any bonus or promotional offers. This can help you avoid surprises or unexpected charges later on.
Indra
Feb 27 2023
As the beginner, I think there is pros and cons about those two bonuses. Rebate can be the best, since it can reduce your trading fees with the cashback that give because the trading reach the certain amount. Meanwhile the pros of the rebate, you need to trade with certain amount. Meanwhile the deposit bonuses has pros that really easy to get and the cons is only can be use only to trade.
I am little bit confused then, I want to ask some question : Which is better for traders: a rebate or a deposit bonus, and what factors should be considered when making this decision?
Dest
Feb 27 2023
As the article said, a rebate offers traders a cash-back reward based on their trading volume, which can help reduce trading costs and potentially increase profits. On the other hand, a deposit bonus offers traders a percentage of their deposit amount as a bonus credit, which can be used for trading purposes.
When deciding which is better, you should consider factors such as your trading strategy, trading volume, and risk tolerance. If you are an active trader who makes frequent trades, a rebate may be more beneficial as it can help reduce trading costs over time. However, if a trader is looking to increase their trading capital and is comfortable with taking on some risk, a deposit bonus may be more suitable.
As the beginner, you need to learn Forex to in the demo account. Because to maximize the bonuses, you need to be ready at Trading.
Rashford
Feb 27 2023
Dest: As you said, you have to be prepared to trade Forex to maximize the bonus. What do you mean by this? I mean even brokers don't usually say that they have to be ready to trade Forex before using the bonus.
I think with bonus even deposit bonus can really be best for newbies as it can increase your deposit and I think I can even use deposit bonus for trading. In other words, I can first use the bonus to trade without risking my money.
Dest
Feb 27 2023
Rashford: When I said "you have to be prepared to trade Forex to maximize the bonus", what I meant is that in order to take full advantage of a deposit bonus or rebate offer from a broker, you will typically need to engage in trading activities that meet certain requirements or conditions.
So, to maximize the benefits of a deposit bonus or rebate offer, you should be prepared to engage in trading activities that meet these requirements or conditions. This may involve developing a trading strategy that takes into account the terms and conditions of the bonus or rebate offer, as well as your own trading goals and preferences.