Anyone who’s ever taken interest in Forex has certainly seen promotions of the so-called “no deposit bonuses” (occasionally referred to as “welcome bonuses”). The premise is virtually irresistible: “Simply open an account and your first deposit will be on us!”.

As tempting as this offer sounds, many are still hesitant to take it. After all, whenever something seems too good to be true, it usually is, right?

Well, in this instance the answer isn’t quite straightforward. There are definitely benefits to Forex welcome bonuses, just as there are undeniable drawbacks. So let’s take a look at both sides of the argument and figure out if a no-deposit bonus is actually worth it and how other types of bonuses (i.e. those offered by Olymp Trade) line up to it.

Forex No Deposit Bonus: How Does It Work?

The general terms are as follows: once a trader opens a new account with the Forex broker, they will receive a fixed amount of money for trading. In most cases the amount of money offered as a bonus is rather small, typically ranging from $5 to $100.

The trader doesn’t have to deposit any money whatsoever to take advantage of the offer, however the bonus does usually come with strings attached. To be able to withdraw the funds, one has to fulfill some strict conditions. The exact terms may vary from broker to broker, but generally speaking the trader has to execute a large number of trades, tallying up what’s called a “turnover”.

The required turnover amount is usually hundreds of times larger than the size of the bonus, making the task extremely challenging if not impossible. At least without supplementing with personal funds, which goes against the very idea of a “no-deposit bonus”, but plays right into the hands of deceptive brokers.

 

Benefits of the Forex No Deposit Bonus

Let’s start with the obvious: a no deposit bonus (at least in theory) gives you a chance to experience trading without investing any of your hard-earned cash. There’s even some potential of making a real profit, which certainly feels more exciting than any profit made on a demo account with virtual currency.

Since no personal funds are involved, traders can walk away from the broker any time, if they decide they don’t like the platform or the terms of service. No harm, no foul. And if they do end up loving what the broker has to offer, the bonus will serve as a good introduction and an auxiliary to their first deposit.

 

Disadvantages of the Forex No Deposit Bonus

First of all, it bears mentioning that no deposit bonuses are only offered to new clients. A trader does not have the luxury to choose if they want to take advantage of the extra funds right off the bat or down the road. “Take it or leave it” is all you get.

Secondly, the size of the bonus is usually quite small. This presents a problem in several ways. Firstly, the amount is hardly sufficient to make a meaningful impact on the trader’s earnings. Secondly, it does not allow for any sort of risk management strategy.

The golden rule of risk management most traders try to abide by is to never invest more than 2% of the total balance. But the minimum investment amount for most Forex brokers would pressure the trader to forego that rule.

Even if they were to make use of the 1:500 leverage, a $100 deposit would still only buy them about 5 trades, all of which would have to be high-risk. Alternatively, one could go all-in, but that sort of approach most likely would not get them far as it’s more akin to gambling than proper Forex trading.

And then there are brokers who do offer sizable no deposit bonuses, $500 and even larger in some cases. Are those legit? The rule of thumb is this: if the broker is licensed and regulated, then they will honor their side of the bargain, but you will have to jump through a bunch of hoops before you see the profit. If the broker is not regulated, it’s best to stay away.

Whichever way you slice it, it doesn’t seem like a no deposit bonus is worth it if your expectation for it is to get a well-rounded (or even profitable) trading experience.