[XM Trading: For Beginners] What is the bonus cushion function? Features and bonus system

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XMTrading is a very popular Forex company because of its wide range of bonuses. Therefore, it is a Forex company where many traders can set up various strategies because they can set up a strategy to trade using bonuses.

Bonus type

There are three types of XM bonus campaigns: “account opening bonus”, “deposit bonus” and “loyalty points”. Each function is introduced in the following article, so it would be nice if you could refer to it.

What is the cushion function?

Even if you lose all the money you deposited in the Forex company, there are companies that allow you to trade with just the bonus money. We call such a feature a cushion, and bonuses are usually counted as margin. Basically, you can not withdraw with the bonus alone, but if you use the bonus and make a profit, you can withdraw. Without the cushion function, no matter how large the bonus amount is, it is meaningless because the bonus cannot be used as trading funds. However, XM has a cushion function, so it is very convenient.

Without cushion function

Some FX companies do not have a cushion function. If the account is of a company that does not have a cushion function in the bonus, the margin = deposit amount only. In other words, if you lose all your deposits, no matter how big the bonus is, it doesn’t really mean anything. If the bonus has a cushion function, there will be a big difference in the margin that can be traded. From the user’s point of view, it can be said that whether the bonus money can be used as funds is quite large.

Handling the cushion function

Forex companies with a cushion function usually use the deposited amount as margin money. In other words, if you lose money, it will disappear first from the deposit amount. However, as I mentioned earlier, XM has a cushion function, so even if all the deposited amount disappears, if the bonus remains, you can trade even if there is no balance.

Advantages of the cushion function

The benefits of cushioning are quite numerous.

You can trade even if the balance is 0

The biggest advantage is that even if the balance disappears, you can continue trading as long as the bonus remains. Even if the balance is 0, it is possible to recover the loss by trading with the bonus.

Hard to lose money

If the bonus has a cushion function, you can get more margin than the funds, so you can afford to cut the loss. A loss cut is a system that prevents the expansion of losses. If you exceed a certain loss, the transaction will be forcibly terminated and it will prevent the loss from expanding beyond the margin.

Leverage goes up

If you can use the bonus as margin, you can trade with higher margin, higher margin maintenance rate, and higher leverage. XM Trading makes it possible to trade using bonuses.

Disadvantages of cushion function

Forex companies with a cushion function have more merits, but there are also more than a few demerits. In the following cases:

wide spread

Forex companies with substantial bonuses tend to have wide spreads. The bonus becomes a burden. Companies with a cushion function tend to set high spreads to secure that amount of profit.

Deposit amount has priority for loss

If a trading user makes a loss, it will be prioritized from the deposit amount. Therefore, the bonus is designed to be used only after all deposits have been lost.

Forex company with cushion function

Forex companies with a cushion function are famous companies as follows. And some companies do not have a cushion function. Which one is better depends on the user. Companies with cushioning have wider spreads, and companies without cushioning have narrower spreads.

With cushion functionNo cushion function
XM TradingFBS