How Do Forex No Deposit Bonuses Work And Should You Really Spend Time On Them?

How Do Forex No Deposit Bonuses Work

Brokers, especially when they are young and want to attract new traders to their platforms often offer various bonuses and promotions. While some of these promotions are a great way for beginners to jump into the world of financial trading, other bonuses make no sense and are totally useless. In this guide, we are going to discuss in detail one type of bonus called no deposit bonus and define if it's worth your time and effort. So, stay tuned.

What is Forex No Deposit Bonus?

If you are new to the FX trading world you may have come across enticing offers such as Forex no deposit bonuses. Put simply, a no-deposit bonus is a form of promotion that allows you to open a trading account and start trading live without depositing your own funds. When you set up an account, the broker deposits funds into your account automatically, and you are able to start trading on a live market with the broker’s funds. This sounds very appealing and exciting, but it is essential to understand what the terms and conditions of this bonus are and if it’s worthy of claiming. To gain a comprehensive understanding of these bonuses it is critical to consult reliable sources and this guide to how FX no deposit bonuses work will provide you with the must-know insights to make well-informed decisions. No deposit bonuses are a great way for beginners to start trading with no budget, but depending on your broker it may become impossible to withdraw your profits and make your trading experience frustrating. This is why you should be aware of the pros and cons of no-deposit bonuses and know the exact red flags to avoid getting scammed.

No Deposit Bonuses Pros and Cons you have to know

Let's consider the exact pros and disadvantages of no-deposit bonuses and define if they are of any use to beginners.

Pros of No Deposit Bonus

  • Allows newcomers to start trading on live markets without spending their own money.
  • Is great for gaining live trading experience and developing proper trading skills.
  • Promotes development of healthy trading psychology skills and shows real market experience to newbies.
  • Offers the ability to test the broker’s trading services, execution speeds, spreads, and commissions in a live environment.

Cons of No Deposit Bonus

  • Some brokers may impose extremely difficult withdrawal requirements including large trading volumes and trading restrictions.
  • The account type on which the bonus is applied may not be suitable for all trader's needs and styles. Imagine you have a great scalping strategy that relies on many small profits during the day, but the no-deposit bonus is only available on a trading account with large spreads. This may be frustrating and not useful for your trading goals.
  • No deposit bonuses are known to be less than 100 dollars which makes it difficult to really make money with trading. As you will highly likely blow up an account if you are inexperienced and trade with a large lot size. To really make money in FX it is necessary to have a trading capital that enables you to trade with enough lot size to make a living. No deposit bonus is not suited to make a living and should not be used for this purpose.
  • Brokers who offer more than 100 dollars are usually scammers or fraudulent players who won’t allow traders to withdraw money.
  • Trading without the risk of losing your own money may promote low discipline and consistency.

Tips on how to use Forex No Deposit Bonuses properly

How can you use the no-deposit bonus properly? You will have to use it as a way to get into live trading and try to learn risk control and develop trading strategies and test them. Since No deposit bonuses often are lower than 100 dollars it is extremely hard to make money using them and will require you to deposit your funds. This may be the main goal of the broker who offers you no deposit bonus and it is critical to research the broker’s legitimacy first before you try anything real. The most important aspect of these bonuses every trader must know is that the broker is legit and well-regulated. Regulations are key in the FX world as they define which brokers are to be trusted and which are highly risky. Other important factors are spreads and commissions. Depending on your trading strategy and style low spreads may be a critical part of trading and if the bonus is offered on the trading account with high spreads you could be going nowhere by using this bonus. If you are trying to use day trading or swing trading strategies then lower commissions are a higher priority.

The importance of Demo trading before using no deposit bonus

No deposit bonus can be a great accelerator to help you become a better trader, but using it without prior knowledge and practice won’t give any results. The first type of account used by newbies is called a demo account which offers live market trading with fake funds. Trading on Demo will enable you to learn basic trading skills and will teach you important basics about the trading platform. During the demo trading phase, you will be developing and testing your trading strategies which are crucial in FX trading. Only after these basic steps are mastered will it be useful to start searching for no-deposit bonuses to further develop your trading skills. With a small trading account, you will be able to put your strategies to the test and develop the strategy you can use later on in your live trading account with more capital than the bonus.

Key Takeaways

  • Depending on your trading strategy some no-deposit bonuses may be suitable or not.
  • The vast majority of FX no-deposit bonuses are lower than 100 bucks making it almost impossible to make a living using them.
  • Bonuses are not for making huge money and should only be used for gaining practical live trading experience.
  • The broker offering the no-deposit bonus should be well-regulated and legitimate.
  • Beware of brokers who offer more than 100 dollars as a no-deposit bonus, they may be scammers.
  • Register and trade on a demo account first and start developing and testing trading strategies.
  • Familiarize yourself with the trading platform and only after a demo trading switch to a live trading account with a bonus.