BonusIs It Your Interest To Have A Bonus?
The answer is simply and without doubts “NO”
You will find advertisements from all corners about the bonus you will get if you deposit money with a particular broker.
How exciting to find someone giving you money for making a deposit!
You find fantastic reviews about how the Broker is the best in the business and so sincere in his/her dealings. How wonderful the reviewer feels about getting free money in his trading account!
But beware traders! All bonuses are a real trap ,
There are strings attached to these glowing offers of free money!
A bonus may be offered to you in a leverage system where you will have to trade more money than is yours to trade in.This means that you deposit $100 in in your trading account and the Broker promises you that you will get 50% sign up bonus.
There could be an impossible condition you need to fulfill.You may need to trade 20 times your original deposit.Which means you need to trade $2000 and only THEN you will receive the $50.
The need of doing a fixed volume of trading can create a lot of stress in you, the new trader.
Often a Broker will put a limit of how much you can withdraw from your account.
This puts even more stress on you to perform.
You may also be contractually limited in how much money you can withdraw from your account.
So the important thing is to resist bonuses with undue contractual pressure on you to perform a certain volume which you have not planned for.
Also another psychological aspect to consider is what a great loss may seem small: for example, if we deposit in 1000 and receive a 50% bonus, the balance of the platform is 1500. if our trading goes wrong, and we'll see "halving" the balance of our account until 750, we will be deluded us to have halved the capital, while in reality we have almost zero because really we only have 250 (the 1000 deposit less loss 750).
We deluded to have something you really have not.
Traders who hold their emotions in check and follow a plan are the ones who will be successful.
Fear or panic is your number one enemy when it comes to trading.
So undue psychological pressure to do well can play havoc with your judgment.
Refuse a bonus that places undue compulsion on you to perform as a beginner.
“Go slowly and grow steadily”.
the Analyst's answerJean Grossett - Financial analyst
If you are not a gambler used to taking risks, any form of conditions or contractual obligations to perform certain volumes will definitely put you at a disadvantage.
– Mentally you are under stress to perform in order to take back your money.
– You should understand thoroughly all the aspects of the contract.
– Plan to use only the money you initially decided to use for Trading.
– Remember you do not even own the money that the Broker expects you to trade in.
– If you win you win big but if you lose you will lose a lot more money than you planned to.