Interesting Article on Lowering Your Spreads

[ForexHottie]

Hey,

I just read an interesting article about how Forex Rebates can cut your transaction costs for free. Sounds a little too good to be true, but at the same time seems to make sense.

I’m considering trying Forex Rebates myself, but first I was wondering if anyone could confirm if rebates are legit.

Is there seriously no catch or am I missing something?

Here’s the article I’m referring to:

How to Lower Your Transaction Costs with Forex Rebates

"What the hell are forex rebates??" About 2 years ago, I was wondering the same thing. I heard about them but never thought to take a deeper look - that was probably my biggest forex regret ever. Right up there with shorting the EUR/USD in 2006. Ouch.

Anyways, as you're probably wondering, what the hell are rebates? As defined by MyRebatesFX[dot]com (a leading rebate provider), a forex rebate is “a free cash bonus that all forex traders are eligible to receive on every single trade they place." Not bad for a high-level definition, but there is just a little bit more to understand about rebates.

If you are a natural-born skeptic like me, right now you're probably thinking: "Free cash rebates?? Bull$#%^! How in the world is that even possible??" I totally understand you - I thought the exact same thing until I finally took 30 seconds to understand how they work. It’s based on profit sharing with forex traders and actually makes quite a bit of sense as it results in a win-win situation for both the forex trader and the rebate provider. Below are the simple steps that make rebates possible:

1. You open a trading account with a forex broker through a middleman (NOT directly with the broker).
2. For doing so, the broker agrees to pay the middleman a finder's fee, which is equal to a portion of your transaction fees every time you place a trade.
3. Certain middlemen have decided to give you back a piece of this finder’s fee just for choosing your broker through them! This is what is called a "rebate".

The best part is, in the end, everyone wins: the broker gets a customer, the middleman gets a finder's fee, and you get a rebate. It is completely free to join a rebates program, yet an average trader can earn about $2,500 a year just through rebates. Also, there are absolutely no requirements for receiving rebates (you could get rebates on a $50 dollar deposit where you only trade microlots if you wanted). Lastly, most leading rebate providers do not mark up any spreads for the sake of offering higher rebates, meaning the spreads that you see will be exactly the same with or without joining a rebates program. What does that really mean? You would be able trade in exactly the same way you trade now, except you would also receive rebates on every single transaction fee you pay.

Hopefully, if you have followed what I said (which my wife insists is impossible), then perhaps you are asking, "How do I receive these rebates?" Well, my fellow trader, here’s how:

STEP 1: Choose a middleman that you would like to be your rebates provider
Believe it or not, there are not that many great forex rebate providers out there (probably because most middlemen are greedy and keep everything that brokers pay them). The main factors to consider are the rebate rates you will receive, the rebate tools they offer you, the brokers that the rebate service works with, the customer support quality, and the additional perks (such as referral bonuses).

My personal favorite is the company I quoted above: MyRebatesFX (MyRebatesFX[dot]com). In addition to having a very user-friendly website and working with top notch brokers, they also offer a unique rebate tracking tool that provides you with a level of transparency that is really not seen on any other site.

STEP 2: Sign up for a free account with the rebate provider you choose
Usually this only takes about 30 seconds no matter who you choose. Basically, you just need to tell them how you would like to be paid your rebate (paypal, check, etc.).

STEP 3: Open a forex trading account with one of your rebate provider's partner brokers
The key thing to remember during this step is to sign up with a broker through your rebate provider's website. If you don’t, then your rebate provider will not be paid their finder’s fee, which means (even worse) you won't be paid your rebates.

STEP 4: Once your account is approved and funded, begin trading and you will automatically start earning rebates
Yup, you do not need to anything besides trade – the rebates will accumulate automatically.

STEP 5 (Optional): If a referral program is offered, you might as well pass on the good word and make some additional cash
Most rebate providers offer some form of a referral program so be sure to figure out if yours does. It is really a no lose situation, as you are helping the person you inform about rebates as well as your own pocket book at the same time.

That is basically it – hopefully, it should be very straight-forward. Do you now need to switch your broker to one that a rebate provider works with? Yes, if you want to receive rebates, but why wouldn't you trade a little paper work for $2,500 a year? Also, if you already have an existing account with a broker that a rebate provider works with, it is generally very easy to convert your account to a rebates account - just email the rebate provider and they should be eager to get you set up (remember they get paid too).

The bottom-line is this: Forex trading is fun and addictive (trust me, I know), but it is always up and down and extremely difficult to stay consistent. There are tons of forex strategies you can mix and match, why not incorporate the only one that is guaranteed to stay consistent and positive: forex rebates. After all, we need to give ourselves whatever edge we can get.

[Pippertipper]

Of course rebates work. How else would I have a new 52-inch plasma TV .

Seriously though, I understand all the skepticism. Pretty natural reaction with all the crap that’s on the internet right now, but read the article again – it explains clear as day how rebates work. I see it as free money that I would otherwise be leaving in the hands of my broker (those guys already get enough money for crying out loud!)

I have been receiving rebates for a few months now and have probably collected close to $5,000 total – why the hell would I let the broker keep that? It only took about 10-15 minutes to fill out all the applications and 1 day for my rebates account to be approved…since then I’ve been receiving monthly payments into my PayPal account. Now even when my trading is going crappy, I remind myself, at least I have rebates, haha. Sad but true.

[smcfx]

There are quite a few programs that give out rebates like this such cashbackforex and pipthepip. Really saves (makes) you money especially if you're a hard core scalper!

[JamesFX73]

I have learned something new.Thanks.