There is a cloud of uncertainty over whether bonus forex will be banned in Europe or not. Owing to a recent crackdown by European brokers which curtailed large amounts of gains large number of brokers were put out of business. And even though some of them did manage to survive the purge, the fate of forex bonuses seems very gloomy in Europe.
Bonus forex as an effective marketing tool
Brokers offering forex with bonus offerings is a market norm. It is a popular mode of enticing traders to come and start trading with them and avail their services. Majority of these incentives are mainly offered to new traders.
However there are some forex with bonus offerings which pay attention to the needs of traders who have been associated with the broker or cyber trading platform.
The main criterion which is needed to be eligible for these bonuses offers is to open an account with the brokerage. Also traders have to constantly refill their accounts with real money and the bonus amount is added to their depositions. This gives them more money to trade and the profits which are availed are calculated over the total amount.
Bonus forex offers vary from trader to trader and there are separate terms and conditions which are applicable for it too. For proselyte traders who are a bit thin in their investment, these bonus packages are the best option to step into a real where they can trade and stack up a substantial amount.
The controversy regarding their terms and conditions
Even considering its perks in mind, there have been huge controversies surrounding the important strings which are attached to these bonuses. European regulators tracked down the dodgy retail forex brokers to protect investors.
The main complaint against bonus forex is that they mainly serve the interest of brokers in contrast to traders.
In simple words, the bonus amount which is presented to traders cannot be withdrawn until a particular number of trades are executed. These are pointers which are rarely stated to traders or investors when they sign up for an account.
The point which regulatory bodies have made is- they have ordered to delink these offerings and make it accessible to traders whenever they want to withdraw it.
As a result of all these happenings, Cypriot securities has dispatched an order to forex online brokers emphasizing that they should lay down the terms and conditions more transparently.
Owing to the recent turmoil in forex bonus sector, Belgium financial regulators have issued a temporary ban on leverage assets namely forex, binary options and also CFDs. The same is seen in other parts of the globe namely- Germany, Denmark, France and Netherlands. These countries have also tightened their forex industry regulations and broker activities.
The toughest impositions have been made by Israel.
The future of bonus forex
European regulatory bodies have clearly stated that as long as the brokers maintain transparency regarding forex bonuses with their clients, it still has a glimmer of a hope.
This ban could cause some alterations in the forex market as brokerage companies will find it a bit more daunting enticing new traders.
A word of advice for all novitiate traders is to go through all terms and conditions of whichever bonus forex they plan to use. If details are not clear, they should contact the customer service and enquire about it. Trading with the right broker matters!
Happy trading and safe trading!
The content of this article reflects the author’s opinion and does not necessarily reflect the official position of LiteForex. The material published on this page is provided for informational purposes only and should not be considered as the provision of investment advice for the purposes of Directive 2004/39/EC.