A cashback Forex broker is an account that allows you to receive a rebate on the spread that you pay on your trades. For example, if you trade $100 worth of EUR/USD with a broker that offers 5% cashback, you would receive $500. This is a great benefit that you can enjoy as long as you have a high enough trading volume with the broker.
In order to maximize your rebate, it is important to choose a forex broker with straight through processing and direct market access. Otherwise, you risk making losses in the forex market if you trade with a broker that doesn t offer these features. Also, it is wise to read customer reviews and look for warning signs before deciding on a forex broker. However, it s best to pick a forex broker that offers a cashback so that you can take advantage of a better spread.
The biggest downside to cashback Forex programs is that you may have to trade at a higher volume than usual to benefit from them. Many brokers require a certain minimum trading volume in order to qualify for cashback offers. Also, many of these programs only work for active traders. For new clients with moderate account equity, they may be required to go through a "cool-off period" before they can begin generating the points needed to receive a significant cashback rebate.
Another downside of a cashback forex broker is that it can encourage you to trade too aggressively. In other words, you ll be encouraged to trade too much, and you won t be able to properly analyze all of your trades. But it can help you earn extra money without compromising your trading strategy. If you re willing to take a risk and work hard to make your money, a cashback forex broker can make it possible.
A cashback forex broker program works by paying a portion of the spread you would have paid on each trade you make. This means that the forex rebate provider will share a large portion of their commission with you. This way, you ll be able to earn more money and not have to worry about losing as much as you thought you would.
There are three types of forex rebate programs. Some of these rebate programs pay out daily, weekly, or monthly, and you can choose which one works best for you. The rebate can be fixed in US dollars, or relative as a percentage of your trade turnover. They can be paid out via a bank wire, Paypal, or Skrill.
Another advantage of a cashback Forex broker program is the fact that you ll get money back on your trades even if you don t use their platform. In many cases, an ECN account can charge you a commission of $2 to $10 per round lot traded, and this can add up to a large sum over a period of time. This money can add up to thousands of dollars per month, and a cashback forex broker program can help you claw back some of that money.