Before we begin explaining this bonus trading strategy, we would like to warn you that this article is mainly for informational purposes. We do not encourage you to participate in any illegal activities, act not in a good faith and violate terms of services and forex bonus promotions.
Having said this, we are still sure you will enjoy the article and find it interesting. If the bonus terms of the broker allow The Forex Bonus Hedging Trading Strategy, you will also be able to monetize ton his knowledge too.
What is Forex Bonus Hedging Trading Strategy?
It is a very simple trading strategy, which just works and brings money. The Idea of The Forex Bonus Hedging is to create 2 positions (Rail One and Rail Two), each of them on the same instrument, same time, same volume, but different directions. The Forex Bonus Hedge is as simple as executing a 1 lot BUY EUR/USD order and 1 lot SELL EUR/USD order in the same time.
But how can you make money on that? This is pure locking!
That’s where this best forex bonus trading system comes handy. Some of the brokers offer the bonus, which could be used for trading purposes. This means that a bonus can be lost in trading. In simple words, if you deposit 1,000 USD and get 250 USD of bonus, you can lose the whole 1,250 USD. Ideally a bonus should be not less than 25%. Sounds like a great bonus trading strategy?
Now let’s see Hedging Forex Bonus Strategy in action!
Step 1: Get two accounts
Account 1: 1000 USD deposit, 30% Bonus, Total Balance 1,300 USD, Stop Out level 20%
Account 2: 1000 USD deposit, 30% Bonus, Total Balance 1,300 USD, Stop Out level 20%
The accounts can be opened within the same or different brokers, but generally their bonus % can be different, the larger the better. Stop Out level should be as low as possible, don’t look for anything less than 30%. Now the FX Bonus Hedging magic will start.
Step 2: Open 2 Positions in the same time
Account 1: EUR/USD Long Position @ 1.25000 ← Rail One
Account 2: EUR/USD Short Position @ 1.24993 ← Rail Two
As you can see, we do not mention the position size, as it strongly depends on the leverage offered by a broker and the Stop Out Level. We should make sure that the required margin for the position is significantly smaller than the bonus value. In other words, if our bonus is 300 USD, we should open a position with a required margin of 300 USD or less. This is vital for this Hedging FX Bonus strategy.
Let’s assume we are opening 1.2 Lots Positions here, as the required margin will be 292.5 USD.
Step 3: Wait for Stop Out
If you are patient and the market is volatile, eventually one account will get Stopped Out, as the EUR/USD price will move.
If you Stop Out level is 20%, Let’s assume that Account 1 has been Stopped Out and now its balance is 58.5 USD. This is now a Dead Rail.
Consequently, Rail Two will be going the profitable direction. This is a Winning Rail. As it got the same market movement, the balance on this account will be:
Balance + Loss on The Dead Rail – Difference in Spread
1,500 USD + (1,300 – 58.5) – 8.4 USD (value of 0.7 pips on 1.2 Lot EUR/USD) = 2,533.1 USD
You should close the Winning Rail right after you got a Stop Out. For this bonus trading strategy, it is best to use TP at the price, at which the Dead Rail is expected to get Stopped Out.
Step 4: Collect The Money
You are left with 2 accounts:
Account 1: Balance 58.5 USD, Withdrawable 0 USD
Account 2: Balance 2,533.1 USD, Withdrawable 2,233.1 USD
By taking out the money on Account 2, you will get a profit of 233.1 USD straight away. Let’s assume you would have to cover deposit fees for 2 accounts and a withdrawal fee for 1 account, hence totally you could make around 200 USD. This are not big money, but if you make the same with larger deposits or with higher frequency, you can easily make good living.
Does it work that simple?
Not really. Brokers try to protect themselves from such a strategy, so in many cases you could be refused a withdrawal or have your positions cancelled. The way to protect against it is to open accounts with 2 different brokers.
In some cases you may encounter scam forex brokers. Such brokers may just refuse your withdrawals or prevent you from closing a profitable position. To avoid this, you should only open an account with a reputable top forex broker.
Keep in mind that you should totally understand the terms and conditions of the promotion and make sure you have a bonus that could become a loss. If you have a simple bonus that only increases your margin, you will not be able to execute this bonus trading strategy. Best way to stay protected here is to shoot an email to your client manager to make sure you can lose your bonus. Use email, as in case things go wrong, you would have a written confirmation. Brokers get mad when they see this bonus trading strategy, be cautious.
What to do now?
This is a proven winning forex bonus strategy and to execute it, you need some trading funds and some best forex deposit bonus offer! Start exploring the offers with us by clicking here!
Click to see best forex brokers and open an account with a secured and licensed brokerage house. Try this bonus trading strategy on a demo account or at a forex contest.
Forex Bonus Lab also recommends you to sign up with XM, as it offers suitable bonus for the Forex Bonus Hedge Strategy.