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[Must-See for Beginners] What is the cushion function of overseas FX bonuses? A thorough explanation of the difference between having it and not having it!

Posted by: MoneyChat Editorial Department

Overseas forex trading is known for its generous bonuses, isn't it?

When gathering information about bonuses, you've probably often heard the term "bonus cushioning function," haven't you?

However, many people may be having trouble finding the information they need on FX brokers' official websites

Therefore, this article will provide a detailed explanation of the bonus cushion feature in overseas forex trading

We also explain how it can make a difference in your trading, so please take a look for reference

The latest bonus information for all overseas forex brokers is updated regularly on the Overseas Forex Bonus Comparison Ranking website

About the bonus cushion function in overseas forex trading

The presence or absence of a bonus cushion feature in overseas forex trading is extremely important

The reason is that the remaining margin balance will be completely different

Since deposit bonuses also function as margin, you should actively use them

Conversely, without a cushioning mechanism, deposit bonuses will not function as margin, so caution is advised

The cushion function means that the bonus acts as a form of margin

The cushion function means that the bonus acts as a form of margin

Increasing your margin allows you to increase the size of your positions and raise your leverage, as well as making it easier to withstand unrealized losses

If there is a cushioning function, the bonus will not disappear even if the balance falls below 0 yen or a stop-loss is triggered. However, if there is no cushioning function, the bonus will disappear at the same time as the balance falls below 0 yen or a stop-loss is triggered

Bonuses without a cushioning function are intended to "increase leverage," making them more suitable for advanced players and less user-friendly

The term "cushion function" is a neologism and will not be understood by overseas forex brokers. When asking customer support about the existence of a cushion function , you will get an appropriate answer if you ask a specific question such as, "If my balance falls below zero or a stop-loss is triggered, will my bonus be forfeited?"

Comparing the presence or absence of cushioning function

We will compare how the presence or absence of a cushioning function differs under the conditions of having 100,000 yen in personal funds and 100,000 yen in bonus funds

If it has a cushioning function

    rn t

  1. Margin: 200,000 yen (100,000 yen personal funds + 100,000 yen bonus)
  2. rn t

  3. Lost 100,000 yen in trading
  4. rn t

  5. Because there is a 100,000 yen bonus, a stop-loss will not be triggered
  6. rn

Without cushioning function

    rn t

  1. Margin deposit of 100,000 yen (including a 100,000 yen bonus)
  2. rn t

  3. Lost 100,000 yen in trading
  4. rn t

  5. Stop-loss execution (trade termination or additional deposit)
  6. rn

As explained above, the cushion function allows the bonus to act as margin, meaning that even if your own funds reach zero, you can still trade using only the bonus to cover losses . In other words, it makes it easier to withstand unrealized losses.

Conversely, bonuses that do not have a cushioning function—that is, bonuses that do not function as margin—will disappear simultaneously when the account balance reaches 0 yen

Does a bonus without a cushioning function have any meaning?

A bonus without a cushioning function does not serve as margin and therefore does not provide any protection against losses

However, with a 100% deposit bonus, your trading capacity doubles , allowing you to increase leverage or expand your open positions.

Therefore, thorough money management is crucial to effectively utilize bonuses that do not have a cushioning function

The reason for this is that even if you increase your position using a bonus without a cushioning function, you will be immediately stopped out if the market moves against you

For beginner FX traders with negative annual profit/loss, using a bonus without a cushioning function significantly increases the risk of being stopped out. Therefore, bonuses without a cushioning function are more suitable for advanced traders.

Another option is to choose a provider that offers cashback

If you want to open an account with an overseas forex broker that doesn't have a cushioning feature, you can also consider using a cashback service

Cashback is a system where you receive money that can be used for further transactions after each transaction

  • $1 to $8 per transaction (100 to 800 yen)
  • Depending on the leverage, some accounts offer a cashback of around 5% to 30% of the margin

The details of the cashback offer vary depending on the provider and the type of account on the website, but they are as described above

In other words, even without a cushioning function, you can trade profitably by using cashback sites

You might also want to consider using cashback sites like MoneyCharger

Benefits of using bonuses with a cushioning function

Below, we will introduce four advantages of using bonuses with a cushioning function

  1. You can increase the number of positions you hold
  2. Less likely to trigger a stop-loss order
  3. Trading is possible using only bonuses

You can increase the number of positions you hold

The cushion function allows you to increase your margin by the amount of the bonus, enabling you to hold larger positions when trading

Because you can hold multiple positions, it 's easier to aim for large profits even with short-term trading such as scalping.

However, while it's easy to aim for large profits, the risk of being stopped out if the market moves against you also increases

Don't let your guard down just because your margin has increased due to a bonus; practice proper money management

Less likely to trigger a stop-loss order

One of the biggest advantages of the cushioning function is that it makes it less likely to trigger a stop-loss order

Without a cushioning function, a stop-loss order will be executed if losses equal to the deposit amount are incurred. (Assuming a stop-loss level of 0%)

However, with a cushion function, even if you incur losses equal to your initial deposit, you won't be stopped out because you still have bonus funds remaining, allowing you to withstand unrealized losses.

However, if you neglect fund management because you can tolerate unrealized losses, you could end up with your margin account reduced to zero before you know it

Even with a bonus, please trade with leverage and position sizes that are commensurate with your margin

Trading is possible using only bonuses

Bonuses with a cushioning function act as margin, so even if your own funds reach zero, you can still trade using only the bonus .

Furthermore, you can withdraw any profits you've earned using bonuses

A major advantage is that you can aim for high returns with low risk by utilizing bonuses with a cushioning function, even without having to prepare a large amount of your own capital

However, bonuses themselves cannot be withdrawn, and there are almost always conditions attached to withdrawing profits, so be sure to check the terms and conditions beforehand

Points to note when using bonuses with cushioning features

When using bonuses with a cushioning function, please keep the following points in mind

  1. Withdrawals and fund transfers will result in the loss of bonuses
  2. Most bonuses have an expiration date
  3. If a loss occurs, your own funds will be deducted first

Withdrawals and fund transfers will result in the loss of bonuses

you withdraw or transfer funds while there is a bonus remaining in your account

If you want to withdraw your profits, we recommend using up your bonus first

Also, be sure to check the conditions under which your bonus will expire beforehand

Most bonuses have an expiration date

Most bonuses offered by overseas forex brokers, including those with a cushioning function, have an expiration date

the bonus will automatically expire after the expiration date , be sure to check the expiration date in advance.

If a loss occurs, your own funds will be deducted first

While bonuses with a cushioning function can be used as margin, if losses occur, your own funds will be deducted first

Then, after your own funds have reached zero, the losses are deducted from your bonus

Therefore, the existence of a bonus does not mean that your own funds are protected. If you do not understand this characteristic, you will end up repeatedly making additional deposits once your own funds reach zero, and your available money will continue to dwindle.

Understand that if you incur losses, your own funds will be depleted first, not your bonus

Top 5 Recommended Overseas Forex Brokers Offering Bonuses with Cushioning Features

From here, we will introduce recommended overseas forex brokers that offer bonuses with a cushioning function

  1. Vantage Trading
  2. FXGT
  3. IS6FX
  4. HFM
  5. BigBoss

All of these services are easy to use even for beginners, so please give them a try

For a comprehensive evaluation of bonus conditions, please check the overseas FX bonus comparison ranking

Vantage Trading

Vintage Type

Vantage Trading always offers generous deposit bonuses: 120% for the first deposit, 50% for the second, and 20% for subsequent deposits.

Since the maximum bonus amount is a generous 1.5 million yen, those with sufficient personal funds can increase their margin by depositing the full amount each time, making it easier to trade advantageously

Regarding the first deposit bonus, there is a condition that the bonus will be 120% if the deposit is made within one week of opening the account, so it is best to deposit as soon as possible

Furthermore, Vantage Trading is also characterized by its narrow spreads, making it a recommended overseas forex broker for those who want to engage in short-term trading such as scalping

FXGT

FXGT offers multiple deposit bonuses depending on the account type

With a standard account, you can receive a 100% + 25% deposit bonus. Furthermore, there's also an account opening bonus, making it easier to aim for significant profits even with a small initial investment

Furthermore, FXGT also has strengths in cryptocurrency trading, making it a valuable resource for those interested in highly volatile cryptocurrencies such as Bitcoin and Ethereum

While it's possible to set high leverage up to 5,000 times, be sure to thoroughly manage your funds when trading using bonuses

IS6FX

IS6FX

IS6FX an attractive overseas forex broker that offers a wide range of bonus campaigns .

Perhaps because it is a relatively new company, established in 2016, it does not currently possess a financial license

However, IS6FX is currently running a campaign where you can receive a 100% bonus on deposits made during the campaign period

In the past, they have also run campaigns such as a 20,000 yen margin bonus for new account openings, and a campaign where winners of a lottery could receive a "100% deposit bonus" up to a certain limit, multiple times

Furthermore, the extensive Japanese language support and the ability to contact them via LINE are features that many users will find convenient

HFM

HFM

HFM is always offering a 20% deposit bonus, with a maximum bonus of 750,000 yen.

In addition, we offer a variety of campaigns, including trading competitions and loyalty programs, giving everyone a chance to increase their margin

Furthermore, with a maximum leverage of 2,000 times and high execution speed, it offers a trading environment suitable for scalping

While the spreads are somewhat wider, HFM offers a wide variety of trading instruments, making it a good choice for those who prioritize generous bonuses and a large selection of instruments

BigBoss

BigBoss Deposit Bonus

BigBoss is currently offering a 100% bonus where you can receive up to $13,700

Additionally, you can use the raffle tickets you receive with each transaction to play a gacha game, with a chance to win up to $5,000

It has a strong reputation for execution speed, and its appeal lies in its quick order placement and settlement

They frequently run special limited-time campaigns, so it's a good idea to check them out

Q&A regarding the bonus cushion function in overseas forex trading

This article answers frequently asked questions about the cushion function in overseas forex trading in a Q&A format

  • Q. Does AXIORY's bonus feature have a cushioning function?
  • Q. Why does it have a bonus cushion function?
  • Q. How do I use the bonus cushion?

Let's check the items that interest you

Q. Does AXIORY's bonus feature have a cushioning function?

AXIORY is one of the overseas forex brokers

They have a reputation for high transparency, disclosing not only basic information such as fees and spreads, but also detailed information regarding slippage

AXIORY is a highly reliable broker that has won various awards, so many people may be interested in opening an account with them

However, there is no bonus cushioning function. Please note that it cannot cover settlement losses

If you're interested in trying AXIORY, try using their bonus to increase your margin when you enter a trade

Q. Why does it have a bonus cushion function?

As mentioned earlier, beginners will find trading easier if they have a bonus cushion function

While bonuses with a cushioning function incur some expense for brokers, brokers that offer generous bonuses and cushioning functions tend to widen their spreads to ensure their own profits.

When choosing a broker with a cushioning feature, it's also important to pay attention to information and reputation regarding spreads

Q. How do I use the bonus cushion?

No special settings are required; you can use it automatically simply by registering with an overseas forex broker and opening an account

You can easily open an account with just an email address. (You will need identification to withdraw any profits you make from trading later.)

I will explain the account opening process using GEMFOREX as an example

  1. Access the account opening page, select your account type, and then enter your name and email address
  2. Afterward, you will receive an email confirming your registration. This email will contain your login password for your My Page, so please check it and save it in a notepad or similar location
  3. You will receive an email informing you that your account has been opened. This email will contain your account number and login password for the trading screen, so please check it and save it in a notepad

By following the steps above, the bonus cushioning feature will be activated

There is no option to turn the cushion function on or off in the trading screen settings, so even beginners should be able to do it easily

summary

This page explains the cushioning function of overseas forex bonuses

Finally, let's review the important points

  • With a cushioning function, you can not only utilize bonuses when taking positions, but also use them to compensate for losses
  • For beginners, it's recommended to choose an overseas forex broker with a cushioning function
  • The reason is that it would be more convenient to be able to use a bonus when cutting losses on unrealized losses
  • Overseas forex brokers without a cushioning function are for advanced traders
  • If there is no cushioning function, the bonus may be larger to compensate
  • If you want to use an FX broker that doesn't have a cushioning function, you can also consider using a cashback service
  • Cashback is a system where you receive cashback (money that can be used for trading) for each transaction you complete
  • Be careful, as your bonus may disappear if you withdraw funds

For beginners, we recommend opening an account with an overseas forex broker that offers a cushioning feature

This is because bonuses can be used not only when taking positions, but also to compensate for losses

Please be sure to check out the websites of any companies that interest you

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