After learning forex trading, some people are still skeptical about trading with their money because they fear losing it. Many brokers offer these kinds of people and newbies many promotional offers, such as the deposit and no deposit bonuses. For example, MTrading, a popular forex broker offers newbies a 200% bonus after depositing a certain amount into their account.
Alternatively, a no deposit bonus is one of the best promotional offers newbies can benefit from since it does not require depositing money. However, before a trader can benefit from the no deposit bonus, there is a need to open an account with the broker. After opening the account and completing the registration, the broker funds the trader’s account with the no deposit bonus, usually a fixed amount. Although the no deposit bonus is free, there is a need to use the bonus responsibly. In this guide, traders that are new to forex and intend to benefit from the no deposit bonus will learn how to use it correctly.
What is a forex no deposit bonus?
Before discussing how to use the forex no deposit bonus effectively, there is a need to understand what the concept means. After registering with a broker, traders usually receive a welcome bonus which can come in a different form. One of the welcome bonuses is the no deposit bonus, in which traders receive money directly into their accounts without making any deposit. The bonus is only for eligible traders, and different brokers have their eligibility requirements as stated in the terms and conditions.
Brokers used the no deposit bonus as a promotion to get more traders to open an account with them. Thus, part of the eligibility requirements is to register an account. The no deposit provides an avenue for traders that want to trade forex but are not yet willing to trade with their money. Trading with the no deposit bonus comes with no risk since you can either make a profit with the money or a loss. Claiming the no deposit bonus is simple since all you need to do is input your details and verify the account you opened with any required document or information. No deposit bonus also gives traders leverage to leave the trading platform without losing their money if they are not comfortable with the setup.
How to effectively use a no deposit bonus?
Getting the no deposit bonus is easy likewise, losing the money thus, it is crucial to understand how to use the funds effectively. There are many ways of using the no deposit bonus correctly, and some are as follows:
The mistake some beneficiaries of no deposit bonus usually make is not shifting their orientation from when they are trading on a demo account to a real one. Since they are not directly putting their money into the trade, they tend not to commit themselves fully and do their research before placing a trade. The same principle applies in many areas of life as people tend to be less appreciative of free things until they lose them.
Although with no deposit bonus, you do not need to trade with your capital, thus enabling risk avoidance. Therefore, when trading with a no deposit bonus, you need to consider the money as if you invested the money yourself. There is the possibility of making a profit with the no deposit bonus and loss. Treat it as trading with your money when trading with a no deposit bonus. There is a need to fully commit to the trading and aim to make a profit from the no deposit bonus.
Remember the motivation behind your applying for the no deposit bonus, as it will help you stay focused and treat the account like a real one.
Know the payout system and utilize it
Whenever a broker offers traders a no deposit bonus, there are always terms and conditions attached, and traders must fulfill them before having access to the money. Likewise, some brokers conditioned their no deposit bonus such that when you trade and make a profit with it, you cannot withdraw unless you meet certain conditions.
Therefore, you need to familiarize yourself with the withdrawal rules to know when to withdraw your winnings and which requirements you need. After making a profit, ensure to remove the profit even if you are yet to meet the requirement to withdraw the bonus to avoid losing the profit altogether with the no deposit bonus in case of loss.
Read the bonus terms and conditions.
Some traders do not read the terms and conditions of the no deposit bonus before accepting. Every broker usually includes terms and conditions with any of their bonuses, which can influence the flow of trade. Therefore, ensure to read the terms and conditions associated with the no deposit bonus before claiming in case there are unique requirements you need to fulfill. Minimum lot size, leverage, and spread change are some conditions some brokers usually attach to bonuses.
Have long-term vision
Using a no deposit bonus to begin your real trading life does not mean you should not have a clear strategy and a long-term, a mistake some traders usually make. Trading on a demo account is different from trading with a real money account. You have enough in your portfolio that can make you take as much risk as you can in a demo account. However, you tend to lose money in a real-money account if you do not have a good trading strategy. Thus, when trading with no deposit bonus, ensure perfecting your technique and having a long-term vision or goal.
Receiving a no deposit bonus is quite simple; however, you will lose the money quickly if you are not careful. If you have a good trading strategy, you can claim the no deposit bonus and use it to build your portfolio without investing your own money. The eagerness to claim a free bonus makes some traders not read their terms and conditions. The terms and conditions of each broker of no deposit bonus correctly will determine if it is worth claiming or not, as some brokers do set unrealistic terms.
Also, there are specific requirements you need to meet before withdrawing the no deposit bonus. If it does not apply to the profit, you made with it, always withdraw the profit. Knowing how to use your no deposit bonus correctly can help you achieve a more extensive portfolio without investing personal money.