Should I choose bonus or leverage?

Currently, it is difficult to find a broker that does not offer a bonus when replenishing an account; the range of offers is quite wide and ranges from 10 to 100 percent.

That is, according to the terms of the promotion, if you top up your account with $500, you will receive up to another $500 as a gift. Are bonuses so important and necessary when replenishing an account , why are they better than regular leverage and is it worth contacting them?

First of all, let’s try to figure out what gives you a bonus in Forex trading.

1. Less risk?

Let's look at the situation using a clear example - you topped up your account with $1,000 and also received $1,000 as a gift, that is, we have $2,000 for trading.

Without applying leverage, this amount conditionally allows you to open a deal of 0.2 lots on the USDJPY pair.

in this case, one point will be equal to 2 US dollars, since in most cases the bonus is not involved in the drawdown, our position will be able to withstand a movement of 500 points until it is completely drained. Let's try to use 1:2 leverage instead of a bonus, although this option is practically not available; rarely does anyone provide leverage of less than 1:10.

if you nevertheless find a broker who provided you with this amount of leverage, then you can also open a deal of 0.2 lots on USDJPY. And your position will withstand a counter movement of 500 points. It would seem that in this case there is no difference between the bonus and leverage, but in reality this is not entirely true.

• First try to find a leverage of 1:2, and sometimes this is the size you need.

• Brokers often use margin calls and stop outs to close positions early.

When using leverage, your position will be forced to close when you have 10-30% of the amount left in your account; when trading with bonus funds, a complete loss will most likely occur, for some this is a minus, and for some, on the contrary, it is a plus if a trend reversal occurs at the last moment . In addition, there are promotions where the broker’s bonus also participates in the drawdown, which further expands the field of maneuver.

2. Additional earnings - this is perhaps the most powerful argument for using the bonus; by replenishing your account with only 1000 dollars, you get the opportunity to withdraw from 100 to 1000 simply by performing a certain volume of transactions.

On average, for 1 lot of volume they allow you to get 1-5 dollars, and a trader with 1000 dollars in his account most often opens trades with a volume of at least 0.5 lots, in a day a couple of transactions and that’s a lot, in a month 20-30 lots and an additional 5- 15% profit guaranteed.

For some, the sum will seem ridiculous, and for others, it will be considered money. In trading, everything is purely individual, but if you still decide to take advantage of bonus offers, do not forget to ask about additional conditions, which are often an unpleasant surprise.

You can find out which broker provides the biggest bonuses by reading the article “ Forex Account Bonus ”.