No Freebies from Brokers

[Rambo35]

I keep reading how so many scammers and paid posters write about how their broker offers x-amount of money for free to new traders.I am always amazed how many new traders believe that this is true.

While I am not arguing against the fact that once you open an account that you will receive whatever funds were promised, but most don't bother to read the terms and conditions tied to it. You need to understand that no broker will take a loss on your behalf and that if you for example get $100 for 'free', that the broker does have a plan.

You will need to at least trade a certain amount of lots and plenty of those brokers who offer bonuses like that carry rather high spreads of up to 3 pips. This means that per 1.0 lot they make $30 in a standard account and often they ask you to trade 10 lots or more. This means they would make $300.

On the other hand there is almost no way you will trade 10 lots on a $100 account in the timeframe given which means that you get the $100, place a few trades and make the broker money without ever having the chance to withdraw. This is not a scam, it is legit and they mention it all in their terms and conditions.

I always tell new traders to trade their own money. Trade what you can afford to lose, but if you really insist in taking a bonus at least make sure you understand the terms and conditions 100% so you know what you are signing up for before you run around and scream scam after your withdrawal request has been denied or your profits cancelled.

Trading requires capital and while you may fund your account with $100 or less, you will never be able to actually trade with little amounts like that.

 

[Rockefeller]

I agree there are no free cookies out there. Very useful post to beginners.

 

[Fxpipper]

There's no such thing as a freebie, and especially in the forex market. To all the newbies, read the small print and believe me, every offer the broker makes comes loaded with a few surprises..

 

[Emibluz]

I have always thought about this. Especially about brokers that offers 100% bonus. There is no way the trader is going to benefit from that bonus. I think what really matters is not the freebies that a broker offers, rather their trading conditions. For example, if you want to trade with a very high leverage, you should be looking at a non US or UK broker. offshore brokers, though some of them are regulated by an unpopular regulatory body, offers high leverage for trading. However, they do not always give bonuses.

 

[ezrydn]

Anything "free" from brokers always has strings attached. Remember that!

 

[jessoreit]

Once you have promised to do whatever it is that you will get the funds to open an account, but most do not bother to read the terms and conditions attached are not arguing against that, though. You have a broker on your behalf and will not be at a loss to understand that the broker needs to have a plan, for example, that 'free' for $ 50, you get.

 

[Emibluz]

Once you have promised to do whatever it is that you will get the funds to open an account, but most do not bother to read the terms and conditions attached are not arguing against that, though. You have a broker on your behalf and will not be at a loss to understand that the broker needs to have a plan, for example, that 'free' for $ 50, you get.

This is correct. It is very important to read their client agreement file before trading with them. Bonus is just a trap that brokers use these days.