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As with any financial service, forex brokers are no strangers to promotions meant to incentivize new traders to use their services. While most of these promotions aren’t really beneficial, one worth looking at is ‘no deposit’ bonuses. So, what is a ‘no deposit’ bonus? These are promotions (also referred to as a welcome bonus) typically offered to new users of a broker who can trade a live account without any of their money out of pocket.
Effectively, no deposit is required from the trader as the broker provides the live account and potential to make a capped profit (with terms and conditions). Though very few of these offers are reasonably fair, ‘no deposit’ promotions can be excellent for new traders transitioning from a demo to live account without the initial investment.
Benefits of ‘no deposit bonus’ offers
Firstly, we should appreciate that a ‘no deposit’ bonus offer is temporary seeing that there are restrictions and other Ts and Cs that apply. The whole premise is to allow new clients to test a broker’s live account in a risk-free, no-obligation way without committing any real funds upfront. These offers are mostly beneficial for new traders coming out of the demo stage who feel ready to ‘go live’. Most traders who trade a live account straight from demo sustain unexpected losses due to the psychological challenges between the two accounts.
It isn’t to say a ‘no deposit’ offer completely eradicates this possibility; however, it can help depending on how the trader treats the account. The limited profit potential could also be an added incentive, though the primary function is transitioning into a live account without using real funds initially. In summary, ‘no deposit’ promotions provide two main benefits:
- They are real live accounts. Although demo accounts strongly mirror live accounts, there is still a very subtle but notable intricacies between the two.
For example, numerous brokers have vastly different market conditions and liquidity at certain times, such as during high-impact news events and at the beginning of specific sessions – and this is something you cannot ‘feel’ in a demo account. You can experience whether the broker has little or no slippage at various times of the day, observe their average spreads, and just overall stability regarding their execution.
- One would treat the account as real money because it’s a live account. One of the fundamental flaws with demo accounts is the psychological differences of handling real and demo money. We can easily reset a demo account in most cases by adding or removing funds at will. This functionality eliminates the element of treating the trading account as real money.
Though a ‘no deposit’ bonus is not technically one’s real money, it is still a live account with some profit potential (limited for understandable reasons). We should consider the bonus can be lost if mistreated without any recourse as these offers are only limited to one new client. For newbies, it’s essential to grasp the psychological shift of demo to live as soon as possible.
‘No deposit’ bonus offers to stay away from
As stated previously, very few of these offers hold any merit that benefit the trader. This post has narrowed it down to just three, which is an accurate reflection of what’s worth seeing amidst the flood of other campaigns in the industry. The suggestions which we’ll consider have simple terms and conditions. New traders should stay away from the following type of offers:
- Offers requiring astronomically high lot sizes within a month or other defined period.
- Offers requiring deposits equivalent to a stipulated profit target.
- Offers with complex terms and conditions.
Top 3 ‘no deposit’ bonus offers
These individual offers may be unavailable in certain countries, and there are other more detailed terms and conditions traders should be aware of. The main ones concerning lot sizes, maximum profit, and validity period are listed here.
XM has been running their ‘$30 Welcome Bonus’, which provides new traders with a $30-funded live account. There are no deposits necessary from the client, truly making it a no-obligation ‘no deposit bonus’ offer. The only main requirements that exist are at least 5 round turn trades within 30 calendar days and a minimum total trade volume of 10 micro lots (0.1 standard lots). The maximum leverage available with XM is 1:888.
Roboforex has also been running their ‘$30 Welcome Bonus’, which provides new clients a $30-funded live account. Their promotion is a lot simpler since there are no lot requirements, periods that the live account is tradable or any restrictions with the profit withdrawable. The only requirement is the trader depositing a minimum of $10. Furthermore, they can open this welcome live account with leverage up to 1:1000.
Like both of the preceding brokers, Tickmill also runs a ‘$30 Welcome Bonus’ promotion, giving new clients a $30-funded live account. This bonus is tradeable for up to 90 days with a minimum of $30 profit and a maximum of $100 profit withdrawable. Tickmill’s maximum leverage is 1:500.
We should treat ‘no deposit bonus’ promotions should be treated as temporary measures since they do not take away that any new trader needs to invest their own money eventually. However, in that brief period, they can be great for new traders to ‘get their feet wet’, gaining a real feel of a live account right before committing their real funds.