Leverage vs. bonus is a most vital things in Forex trading. Leverage vs. bonus what you chose for you? When you willing to decide you are going to trade in forex than you need to open Forex account in broker. There is many broker option. We first chose those broker who give me lot of things. Broker also intentionally create option for you that you must contact with them to open account in their house.

By the broker option there is most valuable things are leverage and bonus facilities. Most of the account holder like you sometime confuse what to do. For that let’s go to find what is that what we do for that.

                                         Leverage vs. bonus

Though most people addressed leverage as a two edged knife I do not find anything negative in leverage or high leverage. Leverage may work for you and also against you. It is also true for your trade. Trades may go in your favour or against you. Trades and leverage both have the same condition. As doing good by the trade depends on you, so doing good by the leverage is also upon you. How can you blame knife, if you hold the knife the other end and cut your hand? It is also very much true that if the knife is in doctor’s hand he cuts off the bad part of the body and cures patient but when it is in robber’s hand it takes life. You are a bad trader, do not know enter and exit points, place orders too frequently, beating the bush, what good can you make from leverage?

But if you are Forex doctor surely you can make the best use of leverage. And, only a Forex doctor can gain here. If you are not so, surely you will lose now or later. When this is a must to happen, of course, you can transfer your lack to leverage’s shoulder to reduce or cover your lack or responsibility.

I say, you take the highest of the highest leverage – no problem. Where there is no point to gain unknowingly you cannot save account going nil at any point – no matter the leverage is high or low. Rather leverage has a very good point to work for a good trader. Leverage strengthens your account as your money gains the strength equal to the sum of the multiplication amount.

If your deposit is 100 dollars and you take leverage of 100, your money gains the strength equal to the sum of 100 X 100 = 10,000 dollars. Now as the amount is 10,000 surely you are safer than 100. Of course you can place trades with big volumes and gain more. As there is no chance to gain without knowing what’s the point of taking low or no leverage or blaming leverage as a bane? You just cannot trade, and surely your account will go nil if you trade capriciously and unknowingly.

It is like the same you cannot drive a car, therefore, had an accident and you blamed the road or the vehicle. If you call leverage a two-edged knife then all things in the world that have both good and bad are two-edged knives. Also Forex trading itself is a two-edged knife. What do you say?

The dangerous thing is BONUS from the broker. Broker gives you money not to take home. Rather it is their investment in your business. Broker does not agree to lose at any point, where you agree to lose in all points. As soon your account reaches to margin level of 35% to 40% broker takes off its invest from your business. When you need more money to support your business broker does the opposite, it takes off.

When your account goes RED and you need more money the broker takes off its investment and account goes nil. But this could not have happened if broker did not do so or you did not use broker’s money. I ask HAVE YOU LEARNT ENOUGH LESSONS when your account goes nil on taking broker’s money? Or, do you still need more to learn? And also, you must fill up the amount if you lose from the bonus.  And if you continue to lose and cannot fill up the amount the account will end up with going nil.

And also that, when your account is in loss you must fill up the loss from two sides 1) the loss on your own money, 2) the loss on broker’s money. When you fill up both two losses (your money and broker’s) a penny is added to your account. It means, by taking bonus you are only adding DOUBLE dangers and difficulties towards your gain. Understood or not?

Remember, BONUS INTENSIFIES DANGERS FOR YOU WHEN YOU NEED HELP. But, if broker had an option to support your account during crucial moment you could turn positively towards bonus. So far it is a very negative thing.

So for us it is better for not to take more leverage. As much as possible avoid leverage. Also as well as not to run away for bonus taking. Think deeply what you do before open your valuable Forex trading account.

Happy Trading…………….. 

                        Written by

Tareq Amar

Forex trader & analyst