Rebate is an extra bonus given to traders on every position regardless of whether the position is profitable or loss. You must have heard the term rebate often, but what is rebate in forex? Let's learn in this short guide. However, before continuing to discuss this forex rebate, make sure you have registered at GICTrade and trade with us!

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What is Rebate In Forex?

In simple terms, forex rebate is an IB commission given by a forex broker to a trader, where this rebate is calculated from each transaction that has been running without looking at whether the position is profit or loss. On the one hand, forex rebate can be additional income but on the other hand, this forex rebate can be a consolation when experiencing a loss. After we know what a rebate is in forex, we will then learn how to calculate forex rebates.

Forex rebates are obtained from broker income in the form of commissions and spreads calculated from the total lot of completed transactions. Each broker has their own rebate calculations, even so, there is a rebate distribution that will not be greater than the IB commission obtained from the broker.

So if you then get an offer like that then you have to be careful and even stay away from the IB, because how can the IB pay a rebate that is bigger than what they get? One thing that must be understood, the relationship between traders and IBs is a business relationship, no IB wants to experience losses just to provide pampering to their traders.

You can also become an IB from GIC or invite your friends to join trading with GIC and get additional bonuses from these activities.

Giving System

In general, there are 3 forex rebate systems or schemes offered by IBs:

Giving in the Form of Pips

The first forex rebate is given in the form of pips from one transaction, usually the amount is 0.5 - 1.5 pips from one transaction on major currency pairs EUR / USD, USD / JPY, GBP / USD, USD / CHF, USD / CAD, AUD / USD and NZD / USD. Cross and commodities such as OIL, GOLD, SILVER, PALLADIUM, etc. usually get bigger rebates.

Donation in Lot Form

In addition to pips, some are also given in lots, but it is not the lot count that is the unit in giving rebates. But lots are used as the basis for more flexible forex rebate calculation standards, because they are not only in pips but can also be in currency, usually in USD but there are also those in Rupiah.

Actually, this is the easiest and simplest form that can be calculated by yourself. The amount varies depending on the IB calculation itself, but this is quite interesting because if you trade in a large number of lots in one week, the rebate you get will also be greater.

Enough to increase the profits you get or as a solace when experiencing losses. The calculation also applies if you make transactions in mini or micro lots, only the percentage difference.

Giving in Percentage Form

Actually, giving bonuses in the form of percentages is quite flexible, but not many IBs want to do it. Because by opening how much rebate the trader gets, they will definitely ask for a large percentage and benefit them. For example, if the rebate agreement is 50% of the commission earned, then the amount is only a matter of calculating the percentage of the commission earned by the IB.

Before continuing to the next discussion, make sure you take the Preliminary Test so you can measure how far your trading abilities are.

Forex Rebate Calculation

Basically, this forex rebate is obtained from the broker's income from each closed transaction from the trader. They do not fully own the income because it will be allocated for bank fees, operations, profits, and commissions to IBs or referrals. The commission to IBs or referrals is then forwarded to commissions for IBs and rebates. For example, ABG brokers will distribute their income. They will pay the bank 0.5 pips. Then, meet the operational costs of 0.2 pips. Finally, the commission for IB is 1 pip. From 1 pip in IB, they will channel 0.4 pips to traders.

So, pips pocket 0.6 pips. Pip stands for Price Interest Point which is used to measure the exchange rate between two currencies. For example, the euro exchange rate to the dollar rose from US$ 1.2220 to US$ 1.2221. So, the increase of US$ 0.0001 is 1 pip. The calculation system will vary for each broker. So is the nominal amount of funds to be distributed. However, one rule that applies everywhere is "the rebate is not higher than the IB commission obtained from the broker". In fact, you should be suspicious if you find a bombastic offer. The calculation of forex rebates has been known, it's time to fill out the trader assessment so that you can consult the trading carried out with GIC.

Also Read : 

Highest Rebate Broker, Get to Know GIC Trading Platform Rebate!

Calculation Time

The calculation time and provision of forex rebates vary widely, because it depends on the broker's policy in calculating commissions. Some are daily, weekly or even monthly. After the calculation from the broker is received, the IB calculates the rebate given to the trader. This forex rebate itself is paid to traders via local bank transfer, or also via wire transfer or internal transfer to the trader's account.

After learning about the calculation time of the rebate itself, fill out GIC's internal survey so that we can find out the performance as well as the quality and quantity that has been given.

Advantages and Disadvantages of Rebates

The following are the advantages of the rebate itself. These advantages are:
  1. Rebates allow for smaller losses, but that doesn't mean they provide 100 percent profit.
  2. Rebates can provide profits from the moment a trading session opens.
  3. In its program, rebates have collaborated with certain brokers. This means you no longer need to create a new trading account from scratch.
As for the disadvantages are:
  1. Rebates can make traders feel satisfied quickly.
  2. Often rebates make novice traders feel that they do not need to learn about forex analysis techniques.
  3. Rebates can mess up your money management system

Things to Know About Forex Rebates

You must have heard that many traders are restless because they suspect that IB can find out the trading done by their clients, this is because IB can sniff rebates from every trader transaction. Actually this perception is not true, IB can do calculations based on reports provided by the broker and has no access to enter the transactions of every trader who is his client.

So you don't need to worry about this developing news and we can ensure that your transactions are truly safe because IB cannot see the transactions of traders who are their clients.

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What are you waiting for? More complete features that fully support you to start investing and trading forex through GIC. Make transactions simpler, safer, and more profitable.