Rebate: increase the profitability and the profit on account
Rebate is interpreted as a discount to the price of a product after purchasing a certain product, such as a wholesale discount. In the forex market, the price of a product, trading instrument or currency pair is determined by the spread, which is the difference between the purchase price of ASK and the price BID sales. In other words, this is a trade margin on the price of the goods. Another type of margin is the commission that is used in futures trading, where it replaces ASK and BID prices. Rebate on forex plays the role of a discount to the trade margin, spread, when the broker in returns to the trader part of his spread.
At InstaForex, the spread on major 10 currency pairs is fixed at 3 (30) points, while on other currency pairs it is in the range of 6 (60) -12 (120) points. The leaders in terms of the spread include Russian rubles and cryptocurrencies. For other brokers, the spread value is in the range of 1-4 points 4-digit without additional commission. Foreign brokers, as a rule, have a smaller spread, but there is an additional commission.
Thus, a rebate is a return to the trader of a part of the spread or commission, markup to the price of the goods, the trading instrument that the trader is trading, buying and reselling it, that is, a wholesale discount. For traders who trade in high volumes with high frequency and thus bring significant income to the broker, an individual discount in the form of an underestimated spread specifically for this account can be provided.
The usual way to get a rebate is to open a trading account through a rebate service using its affiliate link. At the same time, a certain portion of the spread is automatically credited to the trading account. The amount of rebate depends only on the traded volume and is the same for a loss-making and profitable transaction of the same volume. Instaforex uses rebate to increase the loyalty of traders, as well as motivating them to trade more.
Also, brokers are more often used by a broker in order to attract partners who will bring new customers to the company. Connecting via specialized rebate services is more profitable than receiving a rebate from a broker, because the service has a large number of Raiders connected and therefore it is entitled to a discount more than for an individual trader. Therefore, the service is ready to give the trader up to 90% of their remuneration. As a result, this is more than a direct return from the broker, depending on the volume of trades. Instaforex rebate services have a spread return of $ 15 from 1 lot of trading volume, which is 50% of the spread of the main currency pairs.
How can a trader make money on rebate?
There is only one direction for earning in rebate - to increase the trading volume. But in this direction there are two ways - to trade manually in large volumes or to trade in small volumes, but with a high frequency. Also, rebate can be used to get an additional increase in deposit during team competitions held by the Forex Money Forum. For example, one of the participants, the Wanderer of RU, said that in the final stage of the competition he received a rebate that exceeded the initial deposit with which he started the competition.
For example, using the grid advisers from the “Automated Trading Strategies” section of the forum, you can select the parameters at which they will bring a small profit, but at the same time, the income will be generated due to the large total volume and the balance curve will look like this, which shows periodic withdrawals of funds. The main thing in this matter is that the drawdown should be comparable to profit. Then the balance will fluctuate at zero level, and the rebate will act evenly.