By James Woolley
The idea of getting cash back every time you trade the forex markets is a relatively new one, however it has proven to be a very popular idea because there are now lots of companies that offer these rebates. So why exactly should you consider joining one of these websites?
Well let me first of all explain how these forex rebate companies work. They are basically introducing brokers, so it is in their best interests to drive as many people as they can to the various brokers that they work with.
They attract new customers by offering rebates on every trade they place (that is opened and closed) and they are subsequently rewarded by also earning a small commission on each trade. Now you may think that because the broker has to compensate two parties, the spread may be higher if you join a broker through one of these sites.
Well that can indeed be true. You may find that instead of trading a currency pair with a spread of 3 pips, which would be the case if you had signed up with the forex broker directly, you are suddenly paying a spread of 4 pips after joining them through the introducing broker, ie the rebate company in this case.
However the good news is that some rebate companies do not charge any higher spreads, and they are in fact exactly the same. So you really can earn some extra cash just by opening and closing positions, as you would normally. You may think that the rebates may not amount to much, but you would be surprised. If you are a frequent trader or you like to trade relatively high stakes, you can earn quite a lot every month.
The great thing about these rebates is that it doesn’t matter if your trades are winning ones or losing ones. You still get the same amount of commission per trade. So you could potentially find yourself in a situation where you have finished slightly down on the month, but the combined sum of all your rebates pushes you into profitability.
So the point is that if you are looking to open a live trading account with a forex broker, you may as well do so via a forex rebate company. As long as the spread is still the same for all the various forex pairs, you should be able to earn yourself a nice little income on the side for every trade that you make.
About the Author
James Woolley runs a forex blog that provides information on all the major forex brokers and reviews various different products and services including CashBackForex, one of the leading companies that offers forex rebates.
