When choosing a broker, there are a lot of factors to consider, from available account types to deposit/withdrawal methods, commission fees, and so on. There is also a lot of competition out there, as the number of available brokers continues to skyrocket. In an attempt to stand out from the competition, many Forex brokers offer extra perks to attract new customers, with many of those perks being related to deposit bonuses (or welcome bonuses, re-deposit bonuses, etc.), and promotions. Today, we will cover the various types of promotional opportunities that are out there and how you can get the most out of those offers while avoiding scams.
Through referral programs, trader A refers trader B and earns some type of reward for doing so. Sometimes, even trader B gets rewarded, although it always as much. Usually, the reward is a cash amount ($5 or more) that is added to the trading account of the referring/referred traders. There might be requirements for the referred client to deposit a specific amount for these rewards to be credited, so be sure to check for any conditions. In other cases, the referring trader gets to collect commissions from the referred trader’s trades. The second example is usually more of an IB account situation, but we have seen this setup before with partner programs. There are often limits on the number of traders one can refer, or there may be limitations on the maximum amount one can earn through this program.
Rebate programs are often labeled as ‘cash back’ promotions. Both adhere to the same concept, where traders would earn back some of the spread costs from trading through rebates. Volume is usually the requirement for earning these rebates. Fortunately, this means that one can simply trade as normal and earn money back by doing so, with high-volume traders seeing the most benefit in this situation.
Through these promotions, brokers offer a free prize that can be earned by meeting certain requirements. Offers can vary widely, although iPhones, cash prizes, laptops, and paid trips to different locations are some of the most common rewards. Of course, it usually isn’t easy to obtain any prize with a cash value of $500 or more. Requirements generally revolve around depositing a certain amount of money into the trading account, trading a certain number of lots, etc. Many brokers change up their offers every so often, so be sure to check for specials, like holiday promotions.
Loyalty programs typically reward traders with cash prizes, bonuses, points that can be used towards different rewards, and so on. Points are usually earned by making deposits and trading in general. In some cases, one might advance to a new tier with better rewards as these tasks are performed. This is one of the areas that varies more widely, as each broker comes up with their own loyalty reward system.
Many Forex brokers hold contests that reward the winners with prizes, which can include cash money, prizes, trips, and other rewards. One of our favorite types of contests involves demo accounts, where the person(s) who make the most profit trading on a free demo account are awarded a real cash prize. Contests are often held on real accounts as well, and many of them reward 1st place with the best prize, 2nd place with the next best prize, and so on. Many contests revolve around who can make the most profit, or other criteria.
Here are a few tips for avoiding promotion-based scams in the Forex industry:
- Always read the terms & conditions for any promotional opportunity before participating.
- With Refer-A-Friend programs, you’ll want to check to see if there is any limit on the number of people you can refer. Also, brokers often require the referred client to make a deposit into their account before you will be credited with your reward. Check and make sure that said person plans to meet that deposit requirement.
- Remember that no broker is going to give an expensive item away for free. There will always be conditions that have to be met before you will be able to earn “free” items like iPhones, laptops, etc.
- If the broker holds a reoccurring contest, check to see if previous winners are announced on the website. This is a good sign that things are genuine.
- Don’t assume that you are automatically in the running for any contests without checking to see if you need to email support or enter the contest on the website.
- Remember that if something sounds too good to be true, it probably is. Many brokers make it sound quite simple to earn rebates and rewards when the terms & conditions reveal that it is more difficult than it seems.
- Check to be sure that your chosen account type is eligible to participate in certain promotions. Some brokers offer all bonuses and promotions to everyone, while others only offer the best options to those with higher-tier accounts. In other cases, VIP account holders may be excluded from certain contests, rebates, etc.
There are many different promotional opportunities out there, and most fall into one of the categories we’ve outlined above (Refer-A-Friend, Rebates, “Free” Stuff, Loyalty Programs, and Contests). However, each broker offers its own promotions, so offers can vary significantly. As always, read through the terms & conditions for each promotion before participating in any contest or attempting to earn any rewards and check for signs that the advertised rewards are legitimate.