The appeal of overseas forex trading lies in the abundance of bonuses
You can receive tens of thousands of yen just for opening a new account, or a 100% bonus depending on your deposit amount
However, if you misuse your bonus, in the worst-case scenario, it could lead to problems such as your account being frozen or you being unable to withdraw funds.
Therefore, this article will explain in detail how to use bonuses in overseas forex trading and what precautions to take
If you use your bonuses effectively, even beginners can easily make a profit
For the latest overseas forex bonus information, please check the Overseas Forex Latest Bonus Campaign Ranking
Contents
Types of bonuses for overseas forex trading
First, there are three main types of bonuses offered by overseas forex brokers
- Account opening bonus
- Deposit Bonus
- Other bonuses (cashback, referral bonuses, etc.)
Each bonus has its own unique features and points to note, so be sure to check them out
Account opening bonus
An account opening bonus is a bonus you receive for free when you open an account and complete the Know Your Customer (KYC) verification process
Since you can receive it without making a deposit, it's also called a no-deposit bonus or no-deposit bonus
The amount of the bonus awarded varies depending on the overseas forex broker you use, ranging from around 15,000 yen at some brokers to around 3,000 yen at others
Even without any existing funds, you can use your bonus as capital to trade and make a profit
Furthermore, with the account opening bonus, you can check things like spreads, execution speed, and ease of use risk-free
Therefore, this bonus is something that those with limited capital should actively take advantage of
Deposit Bonus
A deposit bonus is a bonus you receive based on the amount you deposit . It is usually expressed as "Deposit % of X%".
For example, if you deposit 50,000 yen into an overseas forex account that offers a 100% deposit bonus, you will receive an additional 50,000 yen, which is 100% of 50,000 yen
In other words, even if your initial capital is 50,000 yen, you can trade with a total of 100,000 yen
Another feature is that deposit bonuses are sometimes offered not only on the first deposit, but also on subsequent deposits. When choosing a broker, be sure to check whether or not they offer this bonus
Furthermore, many deposit bonuses include a "cushion function."
Cushion function: A function that allows you to use bonuses as margin
Without a cushioning function, bonuses cannot be used as margin and are practically meaningless
Many overseas forex brokers offer deposit bonuses with a cushioning function, but some offer deposit bonuses without this function
When taking advantage of deposit bonuses, remember to check whether or not they have a cushioning feature
Other bonuses (cashback, referral bonuses, etc.)
The main types of bonuses offered by overseas forex brokers are "account opening bonuses" and "no deposit bonuses," but some brokers also offer bonuses through cashback or referral programs
Cashback is a bonus you receive based on your trading activity. The cashback rate varies depending on the broker, but it can effectively eliminate trading fees. This bonus is particularly beneficial for frequent traders.
Referral bonuses are bonuses you receive for inviting someone to use your overseas forex broker. The bonuses vary, ranging from several thousand yen for each referral to the option to exchange them for prizes
When choosing an overseas forex broker, be sure to check for bonuses like these
Is overseas forex trading a good deal? How to effectively use bonuses
By using bonuses offered by overseas forex brokers, you can distinguish between good and bad brokers and potentially generate more profits
Below, we will introduce effective ways to use overseas forex bonuses
Check the user experience and execution speed of a real account
Demo (practice) accounts and real accounts have different server and communication environments, resulting in differences in rates and execution speed
Execution power: The ability of a broker to execute a trade at the price specified in the trader's order
In actual trading, the exchange rate may shift when you place an order, resulting in the order being executed at a slightly unfavorable rate (slippage). However, if the execution power is high, this order shift can be minimized
For example, imagine placing a buy order at 120 yen 10 sen, but the order is executed at 120 yen 11 sen. While some slippage is inevitable with any broker, this kind of slippage doesn't occur in demo accounts
Therefore, a situation can arise where "you can win on a demo account, but not on a real account."
That's where account opening bonuses come in handy. With a bonus, you can check the execution speed and slippage of various FX brokers without using your own funds.
In other words, you can experience using a real account with no risk. Execution speed is especially important in scalping trading, which aims for small profit margins, so try using the bonus to test the system risk-free
I'm aiming to strike it rich using my bonus
One option is to use the account opening bonus to engage in speculative trading and try to strike it rich
Deposit bonuses require a deposit, so they aren't completely risk-free. However, trading using only the account opening bonus allows you to trade without any risk
Furthermore, overseas forex brokers employ a zero-cut system where the broker covers any losses, so you don't have to worry about incurring debt due to losses.
Even if you lose, the only thing that happens is that your account opening bonus is reset to zero. Conversely, if you win, you'll earn a profit, so you can trade with peace of mind
Even with an account opening bonus of around 5,000 yen, if you ride the trend successfully, you could potentially make a profit of tens of thousands of yen or more
The combination of high leverage and account opening bonuses is a unique appeal of overseas forex trading
Increase the trading lot size
By taking advantage of deposit bonuses, you can significantly increase the number of lots you trade
For example, if you deposit 50,000 yen into an overseas forex broker that offers a 100% deposit bonus, your total funds will be 50,000 yen + 50,000 yen = 100,000 yen
In this situation, trading with 1,000x leverage would result in a trade of approximately 100 million yen in USD/JPY. If there were no deposit bonus, the lot size would be halved, and therefore the trading amount would also be halved
Deposit bonuses are generally larger than account opening bonuses, so it's a good idea to actively use them for trading
It's important to note that without a cushion function, you cannot use the bonus as margin, so be sure to check whether or not a cushion function is available before using the bonus
Increase the margin maintenance ratio to reduce the number of stop-loss orders
Deposit bonuses can also be used to maintain a high margin maintenance ratio
The margin maintenance ratio is the percentage of required margin relative to the total market value. This ratio allows you to check the risk of margin calls and stop-loss (forced liquidation)
Overseas forex brokers have stop-loss levels in place; some are as low as 0%, while others may trigger a stop-loss at 50% or higher
However, by using deposit bonuses to increase your margin maintenance ratio, you can more easily withstand losses.
Even if the market temporarily moves against you, you can withstand it if you have sufficient funds, and there is a possibility that the rate will then move in your favor and you will win
When choosing an overseas forex broker, try to select one that offers deposit bonuses whenever possible
Points to note when using bonuses
Even a bonus you've received can end up being a loss if you don't use it properly
Each broker has its own rules, so be sure to carefully check them before making a transaction
- Bonuses have an expiration date
- In most cases, the bonus itself cannot be withdrawn
- Engaging in hedging (both long and short positions) can result in severe penalties
Here are three important points to keep in mind
The bonus will expire after the expiration date
While the specific rules vary depending on the overseas forex broker you use, bonuses generally have an expiration date
For example, with the broker FBS, the bonus expires 50 days after account opening. However, with the broker XM, there is no expiration date
Since it will naturally expire after the expiration date, it's wise to use it as soon as possible if you want to make a profit from trading
Profits earned from trading can be withdrawn, but the bonus itself cannot
While you can withdraw profits earned from trading using bonuses from overseas forex brokers, you cannot withdraw the bonus itself
Also, if you withdraw any bonus funds from your account or transfer them to another account, the bonus will be forfeited. Please note that forfeited bonuses cannot be restored
Generally, keeping your bonus offers advantages such as being able to increase your lot size and maintain a higher margin maintenance ratio.
Therefore, try to use your funds for trading as much as possible without withdrawing them
However, with some overseas forex brokers like XM, only a portion of the bonus may be forfeited depending on the ratio of the withdrawal amount to the balance
Terms and conditions vary depending on the provider, so be sure to check the rules before withdrawing funds
Beware of trading strategies that exploit bonuses (such as hedging)
In overseas forex trading, hedging across multiple brokers is prohibited
Hedging is a trading strategy that involves simultaneously holding both buy and sell positions in the same currency pair. By doing this, you can generate both profits and losses regardless of which direction the price moves, thus reducing the risk of losses
For example, if you "buy" with company A and "sell" with company B, you are guaranteed to profit with one of the brokers
In other words, by trading with the account opening bonus, you can make a profit with absolutely no risk
Methods that unfairly disadvantage only overseas forex brokers are prohibited. Even if you are making a profit, be careful, as you will be penalized, such as having your account frozen, if a violation of the terms and conditions is discovered
It is also prohibited to use the same broker to engage in hedging across multiple accounts
Furthermore, hedging across multiple accounts within the same broker is also prohibited.
While hedging may seem like an effective way to diversify risk, it also has disadvantages, which is why many FX companies do not recommend it
In particular, overseas forex accounts that employ a zero-cut system almost always prohibit hedging
However, hedging within the same account is permitted
Zero-cut system: A system in which the FX company bears the loss if the account balance is exceeded due to a sudden change in market conditions.
Furthermore, trading and deposit/withdrawal rules vary among overseas forex brokers, so be sure to carefully check the terms of service and other details when choosing a broker
Frequently Asked Questions about How to Use Bonuses in Overseas Forex Trading
This article answers frequently asked questions about how to use bonuses offered by overseas forex brokers in a Q&A format
- Q. Which brokers offer account opening and no-deposit bonuses?
- Q. Why can I receive bonuses for free with overseas forex brokers?
- Q. Are bonuses I receive taxed?
Let's check the items that interest you
Q. Which overseas forex brokers offer account opening and deposit bonuses?
The following are overseas forex brokers that offer generous account opening bonuses and no-deposit bonuses
| Account opening bonus | Deposit Bonus | |
|---|---|---|
 XM | 15,000 yen | 120% (up to $11,000) |
 FXGT | 15,000 yen | 125% (up to 780,000 yen) |
 IS6FX | 3,000 yen | 180% (up to 360,000 yen) |
 Vantage Trading | 15,000 yen | 120% (up to 3 million yen) |
The bonus campaigns offered by each overseas forex broker change periodically
However, the overseas forex brokers listed above always offer account opening bonuses and deposit bonuses, so we recommend checking them out if you have limited capital or want to take full advantage of bonuses while trading
Q. Why are overseas forex bonuses available for free?
When you open an account or make a deposit with an overseas forex broker, you often receive a free bonus, but this just a promotional tactic by the broker .
The aim is to offer a free trial, similar to a trial campaign, allowing users to experience the service and then encourage them to use it long-term
Domestic FX brokers profit from traders' losses, while overseas FX brokers profit from commissions (spreads), so they likely intend to attract more traders
While receiving something for free might seem suspicious at first glance, there's no downside for the user. Take advantage of overseas forex bonuses and start trading!
Q. Are bonuses I receive taxed?
Account opening bonuses and deposit bonuses themselves cannot be withdrawn , they are not subject to taxes.
However, cash or bonuses that can be treated as cash (bonuses that can be withdrawn) are subject to tax
Additionally, any profits generated using bonuses are subject to taxation
The tax system for overseas forex trading is as follows:
| Reporting obligation | Salaried employees: 200,000 yen or more, Non-salaried employees: 480,000 yen or more |
|---|---|
| tax system | Comprehensive taxation |
| tax rate | Progressive taxation (5-45%) *Miscellaneous income |
| Loss carryforward | Not possible |
Note that the tax system for domestic FX trading is different
summary
This page explains how to use bonuses offered by overseas forex brokers and important points to keep in mind
Finally, let's review the important points
- There are mainly three types of bonuses offered by overseas forex brokers
- You can check the user experience and execution speed of a real account
- It's also possible to use your bonus as capital to try and strike it rich
- You can increase the trading lot size
- You can maintain a high margin maintenance ratio
- However, the bonus has an expiration date
- Be especially careful with hedging transactions
Overseas forex brokers offer more generous bonuses compared to domestic forex brokers. This means you can use those bonuses as trading capital, making it easier to profit even with a small amount of initial investment
Since different companies offer different types of bonuses, try to choose a company that offers a bonus that suits you
