Spread rebates may be very lucrative and exciting for traders. The hint of something that traders can get for "free" by trading, can make heads spin and fingers 'trigger happy' (a.k.a. taking many trades). A spread rebate represents a great opportunity for each and every trader. To make the journey safer, a trader can employ several useful tactics and best practices to improve their success rate with Spread rebates – this article outlines them.
Why a Spread Rebate?
Many companies choose to endorse famous stars or teams, but others prefer to follow a more direct approach, a spread rebate for you - the loyal trader. In fact, by accepting the spread rebate offer, you are, to some extent, accepting a kind of marketing offer; very much similar to celebrities getting a sponsorship.
Brokers also offer spread rebates to traders as a method of improving the odds of their Forex traders' success. The longer a trader is active, the more commission a broker can earn. It is in their own interest to see traders not only survive but thrive. Why? It is a simple mathematical idea: the more capital a trader has, the bigger the lot size of the trades will be; and the larger the lots, the more commission can be made. This is a win-win situation and helps both brokers and traders alike. Simply put, brokers have a vested interest in a trader's success.
Forex rebates are a win-win situation for both the broker and the client. The broker receives its fair share of revenue, the affiliates earn their commissions, and the traders can recover a part of their trading costs.
Forex rebates are one of the compensational options that brokers can offer their faithful traders. Simply put, it's a simple commission sharing scheme between yourself and your broker. For example, if you trade 1 lot of EUR/USD with the spread of 3 pips, you end up paying a sum of 30 USD to the broker. While many brokers keep the funds for themselves, there are some brokers – like Admiral Markets, with this Christmas Comes Early campaign – that will give you a 100% rebate, as a part of their loyalty program. You will still be trading with the spread but, if you meet certain requirements, your spread costs will be returned to you.
Conditions for Getting a Spread Rebate with Admiral Markets
To receive the Christmas Comes Early with Admiral Markets spread rebate, you – the trader – should choose up to three of your favourite instruments on which you might be eligible to receive a 100% typical spread rebate – if all conditions are met and fulfilled.
Keep in mind that a typical spread represents the typical value of the floating spread in normal market conditions. For cash Indices the typical value of the spread is represented during trading hours of the underlying stock index, expressed in pips.
The instruments included in this spread rebate campaign, include:
AUD/USD - Australian Dollar vs. US Dollar
EUR/GBP - Euro vs. Great British Pound
EUR/JPY - Euro vs. Japanese Yen
EUR/USD - Euro vs. US Dollar
GBP/AUD - Great British Pound vs. Australian Dollar
GBP/JPY - Great British Pound vs. Japanese Yen
GBP/USD - Great British Pound vs. US Dollar
NZD/USD - New Zealand Dollar vs. US Dollar
USD/CAD - US Dollar vs. Canadian Dollar
USD/JPY - US Dollar vs. Japanese Yen
Cash Indices CFDs
[DAX30] - DAX30 Index CFD, cash (EUR)
[DJI30] - Dow Jones Index CFD, cash (USD)
GOLD - Gold Spot (100 oz) vs US Dollar CFD
BRENT - BRENT Crude Oil Spot (100 barrels) CFD, USD
WTI - WTI Crude Oil Spot (100 barrels) CFD, USD
In order to apply for the spread rebate you need to:
- Read the full details and apply on the campaign web page;
- Have an existing Trader's Room account, or sign up for one on the campaign web page;
- Deposit a minimum of 200 EUR into your Admiral.Markets or Admiral.MT5 Live trading account, which is associated with the email address used to apply for the spread rebate;
- Make your deposit between 21 November and 22 December, 2017;
- Wait for Admiral Markets to contact you by email, confirming your eligibility to participate. This confirmation email will be sent to the address which you used to apply for the spread rebate.
Take a look at the table below, which explains how long your spread rebate will last.
From 200 to 1,499
10 calendar days
From 1,500 - 4,999
20 calendar days
From 5,000 - 19,999
30 calendar days
(We'll make you a personal offer!)
Please bear in mind that funds deposited through internal transfers from other live trading accounts will not be considered as a deposit.As you can see, the larger the deposit, the longer the duration of the spread rebate. Only confirmed Live trading accounts – with funds deposited in a single transaction and not fully or partially withdrawn within the periods that are shown above – will be eligible for the rebate.
Traders tend to jump in head-over-heels the moment they see that their spread rebate is available, which usually leads to the predictable outcome of traders crashing their account. By maintaining the same risk discipline as usual, trader's can ensure that the spread rebate leads to benefits for their account, such as the availability of more margin and also the potential to unlock the full trading potential. As a standard rule-of-thumb for proper risk management, traders should not risk more than 2-3 percent per trade setup.
Stick to Trading Your Favourite Instruments
Many traders are fully engaged in a quest to receive the spread rebate as quickly as possible. This quest may lead to unneeded and dangerous risk-taking. Spread rebates offer the possibility to reduce the overall cost of trading. Yet, spread rebates also provide another advantage – they give an incentive towards trading your favourite instruments. This can be particularly useful when the market accelerates in its price action and suddenly offers the trader more opportunities.
Diversified Risk Strategies
Forex rebates are certainly valuable and consistent and they can supplement as an additional income source for high-frequency traders – such as scalpers – who depend on fractions of profits they make on every trade. Depending on market volatility, traders might opt to use either a low volatility or high volatility strategy, especially during the Christmas and festive season.
A Low Volatility Strategy
A low-risk strategy involves using between 0.5% - 2% of risk per trade. Usually, traders trade within H1-H4 time frames, as the best compromise between intra-week swings and intra-day positioning. The suggested timeframe for trading is M15. The trader could opt for a combination of scalping and intraday positioning.
Find out more about this low volatility strategy in our Trading at Christmas article.
A Higher Volatility Strategy
A higher volatility strategy involves taking trades with a 2% - 5% of a risk. The strategy is a form of an intraday strategy that may present a trader with good trading opportunities. If a trader wants to use a higher volatility strategy, then the suggested method would be this strategy on an H1 and H4 timeframe.
Find out more about this high volatility strategy in our Trading at Christmas article.
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