{"id":87922,"date":"2016-04-10T10:28:30","date_gmt":"2016-04-10T14:28:30","guid":{"rendered":"http:\/\/countingpips.com\/?p=87922"},"modified":"2016-04-10T10:28:30","modified_gmt":"2016-04-10T14:28:30","slug":"how-to-trade-bonus-with-higher-risk-vs-reward","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2016\/04\/how-to-trade-bonus-with-higher-risk-vs-reward\/","title":{"rendered":"How to trade bonus with higher risk vs reward"},"content":{"rendered":"
April 10, 2016<\/div>
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By Admiral Markets<\/b><\/p>\n

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Dear Traders,<\/p>\n

You have probably heard that many brokers offer a deposit bonus. <\/p>\n

And you may be wondering what advantages brokers get from giving these bonuses? <\/p>\n

Well, they do it for various reasons including for example to:<\/p>\n

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  1. locate more traders – who can then check-out their trading platforms and trade with them<\/li>\n
  2. increase their current customers’ trading volumes<\/li>\n
  3. replaces buying costly advertising space to reach new or existing customers.<\/li>\n<\/ol>\n

    However, brokers also offer deposits to traders as a method of improving the odds of their Forex traders’ success:<\/p>

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    Free Reports:<\/p><\/div>\r\n

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    <\/a>\r\n\t Get Our Free Metatrader 4 Indicators<\/u><\/b><\/a> - Put Our Free MetaTrader 4 Custom Indicators on your charts when you join our Weekly Newsletter<\/p>

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    <\/a>\r\n\t Get our Weekly Commitment of Traders Reports<\/u><\/b><\/a> - See where the biggest traders (Hedge Funds and Commercial Hedgers) are positioned in the futures markets on a weekly basis.<\/p>

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    …the longer a trader is active\u2026<\/p>\n

    …the more commission a broker can earn. <\/p>\n

    Aiming for win-win<\/h2>\n

    Mathematically speaking, the more capital a trader has:<\/p>\n

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    1. the bigger the lot size of the trades will be; and <\/li>\n
    2. the larger the lots, the more commission can be made. <\/li>\n<\/ol>\n

      This is called a win-win situation because it helps both the broker and trader.<\/p>\n

      Simply put, brokers have a vested interest in a trader’s success.<\/p>\n

      In fact, the deposit bonus offer can generally <\/em>be viewed as a fair marketing offer or sponsorship.<\/p>\n

      After all, it would not be in a broker’s best interest to squander such a useful and strategic offer by not playing fair.<\/p>\n

      Sponsorship, really?<\/p>\n

      Well yes. By accepting the deposit bonus offer, you are accepting a kind of marketing offer – much like a celebrity getting a sponsorship.<\/p>\n

      Do a reality check<\/h2>\n

      So before I get into the strategy specifics, it’s important to note that I mentioned these bonus offers are generally <\/em>fair i.e. not always. <\/p>\n

      It is therefore always important to check the history of the broker offering the deposit bonus and whether they are licensed to operate in the markets. <\/p>\n

      Choosing a regulated broker ensures your deposit money is safe and that the broker will play fair.<\/p>\n

      After all, not playing fair raises alarms for the regulator and no broker wants that. <\/p>\n

      See my previous blog for more info on how to know your broker<\/a>. <\/p>\n

      Now let’s look at the higher risk vs. higher reward trading strategy. <\/p>\n

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