The Ins and Outs of No Deposit Trading Promotions

Despite the attractiveness of Forex deposit bonuses, some market participants might still be hesitant to commit their hard-earned savings to the trading account. In order to attract these types of traders, the brokers offer them so-called no deposit bonuses.
This means that once traders open a new account with the broker, they will receive a fixed amount of money for trading. The obvious upside to such offers is that traders do not have to deposit any amount of money to get access to this bonus.
On the other hand, in most cases the amount of money offered as a bonus is rather small, typically ranging from $5 to $100. It is also usually paid only once to new clients, consequently, the overall impact of this bonus on the trader's Forex trading account will most likely be very limited. Yet, it can be useful for those market participants who want to try out the real trading account, without taking any financial risk.
In this guide, we will discuss the viability of using no deposit bonuses, discussing whether they are worth using and how they line up with other types of bonus offers.

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Forex trading No Deposit Bonuses

It is worth noting that just like with any other types of bonuses, the no deposit bonuses do have their advantages and drawbacks. Firstly, let us list some of its benefits:
  • Unlike with several other types of bonuses, the no deposit bonus does not require anything from a trader, except for registration. So it is easy to secure and does not demand any financial commitment from a trader.
  • It gives traders some amount of money to work with, something they can withdraw from the account later if they do not lose it.
  • It gives the market participants an opportunity to make trades on the real trading account without depositing any money.
  • With no deposit bonus trading accounts, traders can test the platform, execute trades and if they do not like it, they can move on without losing any money.
Now, let us move on to the list of Forex no deposit bonus downsides:
  • Not all brokerage firms who offer no deposit bonuses are legitimate. Some of them might represent scams, so traders need to do their due diligence in order to avoid dealing with those.
  • The actual size of the no deposit bonus is usually quite small, ranging from $5 to $100.
  • The small size of the bonus means that traders can only execute trades with large amounts of leverage.
  • In order for traders to reduce their risk exposure and have a realistic chance of earning meaningful payouts, they usually have to deposit money on the trading accounts.
Let us now go through each of those factors, described above in more detail.

Benefits of Welcome Bonuses

It goes without saying that the no deposit bonus does have its distinct advantages. The fact of the matter is that there are many people who are interested in trading Forex and potentially earning some decent payouts from this market. However, for some of them depositing their hard earned money on the trading account represents a significant psychological obstacle.

During these times, many people are worried about losing money, instead of earning any amount. Consequently, some individuals do not take this ultimate step and as a result, never start trading Forex.
 Forex no deposit bonuses 2020
Now, this is exactly where the Forex no deposit bonuses come into play. It essentially gives traders some money to work with, yet it does not require from them anything except for completing the registration. The process is quite simple, the market participant has to fill out certain details about themselves and in many cases also verify the email and the phone number. Once the account is open, the brokerage company will make an initial deposit on the trader’s account.
After completing these simple steps, the market participants can start trading. This allows them to experience and test the real trading account, without taking any sort of financial risk. This helps those traders who had difficulty with depositing the money to overcome those psychological obstacles and get used to trading under real time conditions. They also have a wide range of Forex no deposit bonuses 2020 traders take advantage of, so there is no shortage of the available options.
Finally, if the market participants do not like the trading platform, spreads or commissions, then he or she can simply walk away and look for the better alternative elsewhere, without them having to pay any money. This means that unlike with deposit bonuses, there is no financial risk involved unless the trader for whatever reason decides to transfer money to the trading account.

Disadvantages of Using No Deposit Bonus promotions

Now, despite all of the advantages we have described above, it is important to discuss some of the disadvantages of using no deposit bonuses as well. It goes without saying that there are many brokerage firms on the Forex no deposit bonus list, however, one thing we will likely notice straight away is that the actual amount they are offering is usually quite small. With the majority of brokers, the size of bonus typically ranges from $5 to $100.
This is problematic in several ways. Firstly, such a small size of the bonus suggests that most likely it will have very little impact on the trader’s earnings. Secondly, and more importantly, this does not allow traders to maintain any reasonable degree of risk management.
Here it is worth remembering that usually with brokerage companies, the minimum size of the opened trade is a mini lot. The standard lot represents 100,000 units of currency, while the mini lot is the equivalent of 10,000 units. This does not mean that a trader necessarily should have $10,000 at hand in order to open a single position. After all, they can always use leverage.
Now, here it is important to remember that there are at least 2 important rules for risk management. Firstly, not to risk more than 2% of the trading capital and also not to take on unnecessarily high amounts of leverage. So if a trader manages to find a broker with the $100 no deposit bonus and starts trading with this sum alone, he or she will be forced to ignore both of these rules.
Firstly, one usually can not open trades with $2 or even $5 for that matter. Even if the brokerage company offers 1:500 leverage, one has to invest $20 to meet the margin requirement. It goes without saying that in this case, the market participant will be taking on a huge amount of risk. After all, with this level of leverage, it only takes 0.2% adverse movement in the market for the entire position to be wiped out.
So, in the case of trading with just $100 no deposit bonus, traders essentially have two options. They can spread the risk by opening 5 trades with $20 each. Now obviously, risking 20% of the capital on a single trade is not the best option, but it is better than investing 100% of the amount in one position. However, the downside here is that by
Using 1:500 leverage, the risk of losing the entire capital is quite high.
 No deposit bonus for Forex trading
Alternatively, they can open a single trade at $100, using only 1:100 leverage. In this case, it will take a 1% adverse market movement for the position to be wiped out, which is considerably better than 0.2%. However, it is quite obvious that risking 100% of one’s trading capital on a single trade is far from being a wise risk management strategy.
Finally, it is important not to forget that in some countries there are limits in place for the maximum amount of leverage one can use in Forex trading. For example, in the United States, the maximum level of leverage with major currencies is 1:50, while in the European Union, this limit is set at 1:30 for the same category.
So as we can see in every scenario, the trader has to simply disregard the risk management rules. This obviously, does not necessarily mean that traders will always lose their no deposit bonus, but the chance of this happening is quite high.
The fact of the matter is that the only way traders can maintain sound risk management principles is to make the deposit of their own and increase the trading capital to a reasonable level. However, this defeats the entire purpose of no deposit bonuses. After all, if a trader has to transfer money to the account anyway, then why settle for $100 with no deposit bonus, where there are plenty of deposit bonuses available, offering $500 or even higher amounts to traders?
The alternative to doing so is to take the enormous risks with the no deposit bonus amount and raise it by at least 10 times. However, achieving a 900% return with trading is an unrealistic task for most traders. This seems much closer to gambling than proper Forex trading. Consequently, this is why no deposit bonuses are not that attractive to many traders.

Why FX no deposit bonuses are not available for EU traders

In Europe, the absence of no deposit bonuses in financial trading is primarily a result of regulations set by the European Securities and Markets Authority (ESMA), which serves as the regulatory authority overseeing financial markets in the European region. ESMA's core goals include protecting investors and maintaining the integrity of the market.

ESMA has implemented rigorous measures, including constraints on bonus offerings, to mitigate excessive risk-taking and shield inexperienced traders. No deposit bonuses, involving the reception of trading funds without an initial deposit, were deemed potential encouragements for speculative behavior, overtrading, and heightening the risk of financial losses for traders. While using the bonuses are risk free, terms and conditions of most bonuses encourage traders to take excessive risks, which can lead to developing gambling-like attitude to trading. Enforced since 2018, ESMA's regulations specify requirements such as leverage limits, standardized risk warnings, and an outright ban on bonuses.

The underlying rationale behind these regulations is to create a trading environment marked by transparency and security. By limiting the availability of bonuses, ESMA aims to discourage traders from taking risks beyond their financial capacity and to promote responsible trading practices. While these measures safeguard investors, they also restrict some of the promotional incentives prevalent in the industry before the introduction of these regulations.

In conclusion, ESMA's regulations in Europe restrict no deposit bonuses to protect investors and maintain a stable financial market by discouraging unwarranted risk-taking in trading activities.

Are Forex no deposit bonuses a waste of time?

Navigating the world of Forex no deposit bonuses requires a discerning approach, as these promotions can either be a blessing or a curse for traders. Understanding the nuances is paramount. It's crucial to recognize that these promotions are not altruistic aids for traders; rather, they serve as enticing mechanisms to attract them. Brokers often craft promotions to stimulate increased trading activity, enabling them to profit from trading fees and commissions.

However, astute traders can turn the tables to their advantage. Aligning your trading strategies, including frequency and trade size, with the terms and conditions of a particular promotion can render no deposit bonuses highly beneficial. Yet, this path demands caution. Traders must avoid succumbing to detrimental practices such as overtrading and neglecting essential risk management rules. The allure of no deposit bonuses should not lead to the formation of counterproductive habits.

For those considering participation, a meticulous evaluation of the promotion's compatibility with your trading approach is imperative. If the alignment is optimal, these bonuses can serve as invaluable tools in your trading arsenal. Conversely, adapting your strategy to fit a promotion's requirements necessitates a judicious assessment, ensuring that the pursuit of short-term gains does not compromise your long-term success. Approach Forex no deposit bonuses with circumspection, and they may evolve from potential pitfalls into strategic advantages in your trading journey.

How to find Legit No Deposit Bonus Offers

Another major concern with no deposit bonus offers is the fact that not all of them are legitimate. In fact, not all bonus offers are under $100. There are some brokers who offer $500 or even $2,000 as a no deposit bonus. Obviously, if these were legitimate, then they would represent quite an attractive offer. However, it is not surprising that some traders think that it is too good to be true.

The fact of the matter is that there is no guarantee that a trader who makes use of the no deposit Forex bonus offer will definitely transfer funds to the trading account and start trading on a regular basis. It is highly likely that a significant portion of those traders will simply lose their bonuses and leave the trading platform altogether. On the other hand, with deposit bonuses, only those traders who transfer amounts to their trading accounts would get payments. Consequently, it makes very little sense for brokers to offer thousands of dollars as a no deposit bonus to traders.
 Forex no deposit bonus list
This is the main reason why some brokerage companies are more than willing to spend $500 or higher on deposit bonuses, however, they are reluctant to spend more than $100 on no deposit bonuses.
So the obvious question at this point is: what are the risks associated with those brokers who offer $500+ no deposit bonuses? Well, there can be several problems with them. Firstly, it is important to keep in mind that those brokers can always impose very difficult withdrawal requirements to the clients. They might require their customers to execute a very large number of trades.
However, this is not the most problematic aspect of those brokers. After all, if the broker is legitimate, then a successful trader can successfully fulfill those requirements and withdraw the money.
The obvious problem here is that brokers who are not properly regulated can use some dishonest methods to deprive clients of their ability to earn payouts and withdraw the funds to their personal accounts. Or alternatively, they might break their promise and not to give any bonuses to the new client. Unfortunately, these cases are still happening from time to time.
Consequently, one way to avoid this type of unpleasant experience is to check the regulatory bodies of the brokerage company before opening the account with them. It is indeed much better to get a small amount of bonus with a highly reputable company, rather than taking risks with the broker who offers the large bonuses but is not properly regulated.

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Forex No Deposit Bonus Promotion - Key Takeaways

  • The Forex no deposit bonuses offer traders some amount of money for trading, without requiring them to transfer any funds to their trading account. Traders usually only need to complete the registration form and verify their email or phone number in order to get access to this type of bonus.
  • The main advantage of the Forex no deposit bonuses is that it allows traders to trade on real trading accounts without risking any amount of money.
  • The size of the no deposit bonuses are usually quite small and typically range from $5 to $100. This means that unless traders add some funds to their trading accounts, they can not maintain the basic risk management standards, due to the use of very high levels of leverage and investing large portions of their capital in a single trade.

FAQ: Forex No Deposit Bonus Account

Are $500+ Forex no deposit offers too good to be true?

The general opinion of some of the experienced Forex traders is that brokerage companies who offer large no deposit Forex bonuses fall into two categories. Firstly, there are illegitimate ones, who are not properly regulated and who simply might not give traders the promised bonus, or alternatively do not let them withdraw their earnings.
There are also legitimate brokerage companies, who do not deceive their clients in any way and do offer one of the best Forex no deposit bonuses. However, they do impose very strict rules on when the trader will be able to withdraw funds.
Those requirements might include executing a large number of trades and some other conditions as well. So most likely it will take some skill and effort for traders to fulfill all of those requirements, however, it can be quite achievable. Therefore, those traders can meet all of the criteria of Forex no deposit bonus, withdraw profit, and spend those gains in any way they wish.
Therefore, one way to differentiate between these two categories is to check the regulatory bodies of the broker, as well as reading the reviews. This might give traders some idea, whether or not the brokerage company is reliable.

Can Traders withdraw their Forex no deposit bonus without verification?

Usually, the market participants can not withdraw any funds from their trading account without verifying their phone number, as well as one’s personal identity. The latter part involves scanning or posting of copies of the national identity card or passport.
This is mostly due to regulations, in order to avoid the use of Forex trading accounts for money laundering or other illegal purposes. Consequently, traders wishing to withdraw funds from their trading account, need to make sure they have the necessary documents in hand so that their brokerage company can meet those regulatory requirements. 

What should traders pay attention to when reading Forex no deposit bonus review?

When going through broker reviews who offer no deposit bonuses, there are several things one might look for. Firstly, it is important to know the identity of the regulatory bodies of the brokerage company. In many cases, this can be a crucial step in differentiating legitimate brokers from scammers.
Traders should also take into account the terms and conditions for withdrawing money, and whether the other traders have experienced any unexpected difficulties with this process.
In addition to that, it will be useful for traders to read about the degree of competitiveness of the spreads and commissions. After all, receiving a small bonus is relatively poor compensation for paying more money for spreads and other expenses, compared to other brokers.

Can there be cases when traders might not receive instant Forex no deposit bonus, despite the promotion?

These things usually happen under two scenarios. Firstly, the trader might have chosen a poorly regulated broker, who violates its own promises. So in the advertisements, the brokerage company might promise traders to give them some no deposit bonuses, but once they open the account, they might not provide them. It goes without saying that this is a very poor long term business strategy, but such things do happen.
On the other hand, there are also some legitimate brokerage companies who might deny their clients bonuses. The most common reason for this is that the client might have violated one or more rules from the terms and conditions. For example, the customer might have opened a second account under his or her name, something which is not permitted with some brokerage companies.

Why do Forex no deposit bonus brokers give money to trades who have not deposited any funds?

Here, the most important thing to understand is the fact that the no deposit bonuses represent just a part of the advertising budget. The majority of brokerage companies who offer promotions, do so with the Forex deposit bonuses. This is understandable since in this way they only pay money to those clients who have already transferred some money on their trading accounts.
However, the fact of the matter is that a significant number of potential traders might be at first too reluctant to risk their hard earned money on trading. Consequently, no deposit bonus Forex promotions exist in order to entice those clients to open their accounts and try out trading under real time conditions. Therefore, the hope here is that this could give a competitive advantage to the brokerage firm over some of its competitors.
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