What is the catch with all these "bonus" deposit brokers?

I noticed lately there is more and more brokers which give equity deposits anywhere from 10-50%. I know these are all bucket shop brokers.

I know that its almost impossible to withdraw the bonus due to the required turn-over however I must be missing something here because can't someone just deposit $1000, get $500 in risk-free money. Trade and if they lose that $500 just withdraw their original deposit. So pretty much trade risk free?

Most of these bonuses are just an eyewash and fool clients , the bonuses are removed once the your own equity falls below zero , e.g you get deposit 500 USD you get e.g 100% bonus therefore for Credit + Equity = 1000 USD , now you make a loss of 500 USD , the bonus will be removed and you balance is ZERO . Very Very few brokers have genuine bonus scheme which support draw downs , again they can conveniently say that you have abused the terms such as arbitrage , hedging all that stuff and refuse your withdrawal and give back only your original deposit .

I say again , bear in mind that your money is lost first not theirs, they will remove their bonus once your own money is ZERO .

These scheme are only designed to encourage traders to trade large lots thinking the extra bonus will support the draw down , but it does not and you bust your account directly to zero and fill their pockets with your money.


Best is to NOT TO GO FOR ANY BONUS . Stick to an ECN/STP broker trade small lots and build your equity over time NO ECN or STP can ever accuse of any manipulation .

Good Luck.

Well Said

May be a way to attract new clients, don't be so biased

Just keep in mind that the free margin is 50%. I know it's hard but , I'm sure some people are actually leveraging less with extra balance.

Well, basically a bonus is like an extra leverage. Just as Ganesh said, and I fully agree with him, when a broker gives you a 100% bonus, you basically increase your leverage twice:

Leverage: 1:500
Deposit: 1,000$
Bonus: 1,000$
Total equity: 2,000$
Effective leverage: 1:1000 on your equity

So you just wipe out your equity twice faster being able to take larger ticket sizes. Remember, you can only lose your equity, not the bonus.

On another note, all the bonuses came from the 2010s, when the US illegalized the online casinos, and the people behind them found out about Forex, how profitable it is, how easy it is to set up a shop, and just poured in with their marketing knowledge, i.e. bonuses, prizes, competitions, and other marketing gimmicks.

Plus, the Market Makers can afford to give you the bonus, they know that eventually you will loose, and they will get everything back. Because, by the book, it has to come out of the companies capital (but just by the book). ECN/STP brokers cannot give you a bonus anyway, as if you loose the equity, and let's assume the bonus as well, it will go to the banks and from the broker's pocket.

Bottom line, stay away, unless you really want to gamble big time, while not standing a chance.

You rightly said some people ....most are fooled

My Learning till date
more to come on my thread |

http://www.forexfactory.com/showthre...53#post8318753