The topic of forex rebates is widely discussed at numerous forums and portals. Is this another marketing trick or a real chance to earn more? Is it possible to build a trading system for earning on rebates? To better understand the essence of forex repairs and answer these questions, let's look at the problem in more detail.
In fact, forex rebates are just one of the types of cashback services that currently thrive in almost all industries, although the forms of their implementation may differ slightly. In the modern world, marketing is progressing, and manufacturers are constantly trying to introduce new marketing tools to attract customers. And the forex industry does not lag behind in this matter: brokers agree to share part of the commission with intermediaries for attracting new customers. In the process of development, some intermediaries turn into large rebate services, the main business model of which is attracting new customers for forex brokers. In turn, the services, in order to encourage customers to open accounts through them, agree to share part of their profits with customers. On this principle, a typical forex-rebate scheme works: you open an account with a broker through a rebate service; Broker to share with the service part of the commission earned on your transactions; service returns to you part of its share of the commission in the form of rebates.
Thus, rebates for traders are a real opportunity to improve their trading strategy a little. The only danger that the rebates may have is that many traders in their intention to earn more rebates tend to make as many transactions as possible and, as a result, may lose funds due to neglect of the strategy and underestimation of risks.
From the very appearance of the first rebate services, traders make attempts to use the rebates not only to reduce costs, but also as an independent source of earnings, namely: they try to develop systems that generate large rebate payments. Here you need to be careful, since many inexperienced traders, without understanding the issue, offer, as they think, working systems that are inherently unprofitable. For example, quite often on forums it is suggested to simply make a large number of short transactions (bought and immediately sold) with a large volume to earn good rebates. At the same time, many authors of such "grails" forget elementary that the rebate compensates only for a part of the costs (commission or spread), while the remainder will still "eat" the deposit.
Let's look at the question of which trading systems can be used to earn money on rebates. First, the ability of the system to repay costs: a spread and a commission is a prerequisite, only in this case the rebates will give a net profit. Secondly, it is desirable that the system makes short transactions, because in this case the risk of drawdowns decreases. More details about which systems are best used can be found in the detailed article on earnings on rebates. Here we only point out that arbitrage and scalping systems are most suitable for such earnings.
In conclusion, we note that when choosing a forex broker and rebate service, you should not blindly rely only on the size of the rebate. You should always start from the final costs of the deal, since for allegedly profitable large rebates the broker may conceal a high spread or commission. For example, trading with a broker returning 25% and offering a spread of 1 point will be more profitable than with a broker returning 50%, but offering a spread of 2 points. Since the final costs (spread per minus rebate) at the first will be 0.75 p., whereas for the second 1 p. More information about other interesting trading strategies can be found here: megatrader.org
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