The main types
Bonuses come in four broad forms, and they behave very differently.
- Deposit bonus: the broker adds a percentage of your deposit as credit, often 20% to 100%. The credit can usually be traded but not withdrawn, and profit made with it can only be withdrawn after a volume requirement is met.
- No-deposit bonus: a small amount, typically $10 to $100, credited to a new account without a deposit. It exists to get you trading; the profit is withdrawable only after conditions, and the bonus itself normally is not.
- Rebate or cashback: a portion of the spread or commission returned to you per lot traded. This is the most transparent type because it is paid in cash you can withdraw, with no volume trap.
- Trading credit or margin boost: bonus funds that increase your margin but disappear if your balance falls below a threshold, which can make a losing account lose faster.
The conditions that matter
Every bonus has a volume requirement expressed in lots, and it is the number to read first. A $100 bonus that needs 10 standard lots of trading before withdrawal costs more in spread than it pays out for most retail traders. Look for the ratio of bonus to required lots, and check whether losses cancel the bonus, whether it expires, and whether withdrawing your own deposit removes it.
Bonuses also change how a broker treats your account. Some brokers restrict scalping, hedging or expert advisors on bonus accounts, and a breach can void the bonus and any profit made with it.
Why your regulated broker has none
ASIC, the FCA, CySEC and the other European regulators ban bonuses for retail clients because they encourage overtrading. A broker holding one of those licences simply cannot offer you a bonus under that entity. If you see a bonus from a familiar name, it is coming from its offshore entity, which carries different protections; that is a legitimate choice for some traders but it should be a conscious one.
Cashback and rebates sit in a grey area and remain available from many brokers through partner arrangements. FrugalFX lists them as cashback offers where they exist.
Where to go next
Trading forex, CFDs and other leveraged products involves significant risk. This guide is general information, not investment advice. FrugalFX earns affiliate commissions on some links.