Do You Think Only Bad Brokers Give Out Bonuses?

I invited some friends and students of mine to join two brokers that offer fabulous deposit bonuses but few of them quickly declined.They maintain that any broker offering bonuses is not real. Do you agree or disagree that only bad brokers hand out bonuses? Do you have a first-hand experience to establish your argument.

Personally I disagree that any broker that offers bonuses is bad.Giving out bonuses to traders is just another way of advertising or attracting traders.Every broker advertises.Some even sponsor football clubs in Europe for that matter. You can imagine the cash involved in doing promotions.I think where problems come up is when traders are carried away by the huge magnitude of the bonus and ignored the strong terms and strict conditions that apply.
Always read and understand the terms and conditions, and if you think that you are not comfortable with the conditions then ignore the bonus immediately. I found that it is easier to ignore a bonus than to opt out.
Why some brokers do not promote any kind of bonuses, there are tons of good brokers that promote fabulous bonuses.Therefore, I think the argument that bad brokers are the ones that offer bonuses cannot be generalised.

You maybe should clarify the term "bonuses" a little bit more.

In case you refer to the bonus deposit some brokers are offering you might already gave the answer by yourself. A broker has to be measured by its performance, its costs, its customer service. Luring people into opening accounts by offering extra or even free cash distracts from beeing able to evaluate on these points.

Yes, I refer to bonuses given to traders on the deposits they make. For instance, FxGlory gives 50% deposit bonus. This means if I deposit $100, they will give a bonus of $50 which is exactly 50% of the deposit.

Absolutely yes.

Absolutely???

Yes, absolutely.
A bonus is a source of margin call that ends up as broker revenue.
Joe retail opens an account with the bonus
Joe retail "uses the bonus" i.e. over leveraged
The broker takes the other side of the trades
Margin call ensues most of the time.
Obscene profit to the broker.

Yes, 100% true, deposit percentage bonus= scam MM broker.

life-pro-tip: if someone wants to give you something for free, run.

First of all brokers don't give you anything for free. They just give you a couple of bucks with a very strict terms and condition. 99% of people would lose that money for several reasons. First, you trade with the money that is not yours and the terms are in a way that you should trade with a high risk to meet the condition. Second, most of the traders who use that bonus are newbies so they are already going to lose the money even if it would be their own money let alone free one.

This kind of advertisement is one of the most effective methods because people are inclined to keep their current situation and resist against any change in their lives. For example if you buy your groceries from a place, after a few times you get used to that place and a behavioral pattern is formed in you that you always follow that except you come across a problem otherwise you don't wanna change that. Brokers use this behavioral pattern very well because you either are in those 1% that they don't lose the money and win a few bucks but keep trading and give their share (spread) to brokers and maybe face margin call and deposit it even with larger money and even for several times, or you lose the money at first and if you are going to trade, the probability that you change your broker is very low, according to what has just been said, so you'd deposit and so on. So they are neither generous nor crook nor unreal etc. they just use a very useful and powerful method for advertising their brokers. I speak from my experience. I've used several of these bonuses in both playing poker and trading and I've made big money (compare to the small bonuses ofc) from a few dollars and both of the poker rooms and brokers were absolutely reputable and I didn't have any important problems with any of them although all their terms in both groups were ridiculously hard to achieve and aren't worth trying unless you have a specific goal which is another subject to discuss.

Anyway, there is nothing unreal at least in most of them except their stupid terms and condition, so if you wanna use the bonuses, first read the condition and then choose those that are more realistic and achievable. Some of them are better than others.

TD Ameritrade gave me $600. Maybe I'm naive but I'm pretty sure they're not a Bucket Shop. It's routine for businesses to give cash incentives to attract customers and clients.

Absolutly not. I played online poker for a long time and bonuses are pretty normal in the buiz.

Most only brokers offers two kind of a bonus:

- Equity bonus - wich you never can withdrawal, only for trading purposes.. Its a trap for newbies to open orders that are to big.

- Bonuses wich you can withdrawal when you have reached the needed condtions (x turnover etc.).

Only because you get a bonus DOESN'T mean they make a loss...

And now more and more brokers offers some kind of "cashback".

Thats the buiz.

Brokers that offers bonuses does not mean automatically that they are crook or scammer, the competition is tough in the brokerage business and it is understandable that there are some brokers that lure customers by offering deposit or no deposit bonus, but traders must be aware though that these bonuses has an attached conditioned that must be fully evaluated before you availed such offers.

Right, they give you $600 if you deposit $250000 or more, so it's good deal for them It's only 0,24% of your deposit, typical marketing gimmick to attract new clients. Think how big commission you can make for them in the future from $250000 Scam market makers give 50% deposit bonus or even more. Actually, they can take your deposit faster thanks to stop out.

Usually bonuses are linked to some conditions, like number of trades, or volume of trade you have to make during some period of time, before bonus will be withdrawable ..

that means, they want you to trade as much as possible, which is not normal behavior of trader. It is directly opposite of it. It forces you trade more, not waiting for good trade.

I would say any bonus is just psychological play with user, which brings more profit to broker.

I don’t think that the brokers which give out bonuses are necessarily all bad, but I do think it is a form of unethical advertising. There’s a reason why both the FCA and CySEC recently banned this practice, apart from their larger rule change about the leverage cap for CFDs. Not to mention that bonuses often come with the caveat of some rules and conditions the trader must meet in order to use them, and those rules tend to be designed in a way that is very hard to meet, especially for a newbie.

Do you really mean $600 bonus on $250,000?

As some of you mentioned above, there are different types of bonuses that brokers offer. I experienced two types. Doesn't necessarily mean that they are provided from scam brokers.
1. No deposit bonus. Practically give promotional money for nothing and letting you trade (you cannot withdraw until you have traded enough lots). This type can be described as fishing bonuses. In other words, it will attract people that have no experience with trading by giving them money to see how everything looks like with real money. After newbie trader have lost his bonus, newbie trader becomes interested in forex and everything that comes with it. They deposit their own money. Pure advertising.
2. Deposit bonus. While give the trader the opportunity to over leverage his account and purchasing power, this bonus can have some nice kick back. Again you cannot withdraw this. What I mean is that for every lot that you trade, a broker give away a small portion from bonus to your balance. So let's say you deposit $1000 and get another $500 bonus (50%) and trade regular and don't overleverage your account, you'll be safe. You have traded 1 lot today and for that 1 lot you will get something from that $500 bonus to your balance, a small portion like $0.40. That doesn't look like much, but that is money that you earn by trading regular, like you would trade without bonus.

The conclusion - Broker would never give you money for free, they can give you a chance to earn that money by trading. This is purely for advertising, as we all know that the competition is harsh and every broker seek their place under the sun. I agree that there is a bunch of scam brokers, but bonus isn't the merit that you should look for.

Yes, I checked it on their website

According to point 1, it's true, it is small bonus like $50 just to make someone interested in trading forex. It's marketing gimmick use by some ECN brokers. 50% or biggest deposit bonuses are used only by market makers that want to take your deposit. I don't know any reliable broker with that kind of bonus. Even FCA regulation doesn't mean that it's good broker.