Forex rebate basically works like a cashback reward program of a credit card. A rebate itself is a small share of trade commission that trader may receive back to his pocket (or, more commonly, back to his e-wallet).
How do forex rebate sites work?
Essentially, forex rebate provider works like a middleman between a trader and his broker. Forex rebate provider first signs up with multiple brokers as their affiliate. Being an affiliate with the broker means that they get paid commission for the clients they bring. More specifically, they get payouts when their referred clients are trading on live accounts. These commissions are generated regardless if trades were closed in profit or loss – payout is generated based on trading volume.
After the payout is received, rebate provider takes a share of that sum and sends it back to the trader. This is called trading rebate. Essentially, all three parties benefit:
- Broker gets more clients.
- Rebate provider gets commission payouts.
- Trader gets extra funds in a form of rebate.
Why is it beneficial to sign up with a trading rebate provider site?
Trading rebates are calculated and paid based on the trading activity of each trader. Thus, rebate provider will offer to give a certain portion of the cost of each trade back. It might be a cash payout, crypto payout or funds received directly to broker’s trading account. So essentially, traders end up reducing their trading costs when using rebates. Rebates can be seen as a boost of profit or a reduction of losses (if any).
Another benefit of using such cashback service is their support services. Rebate providers might have a very large client database and a close relationship with the broker. As a result, they might be very helpful when a trader needs immediate assistance in regards to his trading account. Most forex cashback sites offer comprehensive education material, live chat and email support, even some extra tools and/or trading contests for their clients.
Another advantage is comprehensive review of brokers, which might be extremely useful for new traders. Rebate providers usually provide a list of brokers they collaborate with and this list has extra information, which can be really helpful when trying to find a best fit for ones’ trading strategy.
What to look out for when choosing a forex cashback provider?
The traders have to keep in mind that trading rebate is just a small share of cost that will be covered by the rebate provider, however, actual trading costs (spreads, commissions) applied by the broker must be taken into account as well.
Another significant factor to consider is a so-called spread markup. It is very important to make sure that your spreads do not increase with a broker because of using a rebate provider. Most rebate providers will have this clarified on their website, however, for those that do not, it is always better to check with the provider first. The point of using rebate website is to reduce the trading cost and save money, not the other way round.
How to start gaining rebates?
When opening a new account with the forex broker, it is best to use the provided affiliate link of the rebate provider. This will help to ensure that your new trading account is setup under the correct affiliate ID. Some rebate providers will also require you to submit this trading account number to their back-end area, just to make sure that everything is connected and setup correctly.
You will also need to choose a preferred rebate payout method. It may be a selected e-wallet, your bank account or even your crypto wallet. Alternatively, some brokers may offer to gain rebates directly into your trading account. This way you may receive your funds immediately available for trading again.
And that is all – once everything is setup, your account is ready for trading and generating rebates.