Alan Solarsh warns about the risk of broker 100% deposit bonuses using a worked example: a client deposits $100 and receives a $100 bonus (total equity $200). After a $50 loss the trader’s own capital is $50, but the broker measures drawdown relative to the trader’s real capital, so the broker’s reported drawdown can be 50% (not 25%). Solarsh explains this creates a lot‑size trap—traders who size positions off the full $200 (including the bonus) become overexposed and risk earlier liquidation (broker liquidation/margin action cited at ~80% margin). He also demonstrates a robot money‑management setting and cautions to size lots based on actual capital, not the bonus-inflated equity.
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Alan Solar Share, the passive income guru, in this video tutorial is going to explain to you about the hundred percent bonus that the brokers give you. Right. So let's get started. So here's an account of one of my clients. And as you can see here, I'll do it over here, that the equity is $200. So when he deposited his money, he deposited $100, and then the broker gave him a hundred dollars free money. That's amazing. Or is it? So his total equity is $200. So let's do a little exercise here. Let's say that you take some trades and you'll draw down on your hundred dollars. You rack up a drawdown of $50. So your capital is $100. The broker's giving you $100, and you've now got a drawdown of $50. What is your actual drawdown? Is your drawdown 25%? So it would be this number divided by this number, or is your drawdown this number divided by this number? And this is where a lot of people get it wrong. Your drawdown according to the broker is actually 50%. And this is very important because now what happens is that you need to calculate your lot sizes correctly. And this is where the trap is, where most people get it wrong. Most people are calculating their lot size on the $200. So what you're doing is you're saying, well, I've got $200, my normal lot size would be a one lot. But because I've got $200, I, I'm going to now take a trade of a two lot. This is just an example. And that is where the trap is, unfortunately, because you've now overexposed yourself. This bonus that you, that the broker gives you does not count towards your drawdown. And when your account is going to blow, the broker is going to liquidate your account when your margin percentage is at 80%.
And that is going to be half the value of what you thought it was. So I'd be very careful to increase your lot sizes. So the lure of the broker is to say to you that if you trade with us, we'll give you the 100% bonus. And then after you've traded X amount of lots, that 100% bonus becomes yours, which is a fantastic gift. It's amazing. What a concept. I definitely take the bonus 100% and you should take the bonus. But you need to be careful of your lot sizes. Now, when you set up the robot. Let's go and open up the robot. When you set the robot up.
It's got a feature here that tells you, helps you with the, with your lot sizes. You can choose here to either use manual lots or you can choose the robot to use.
An internal mechanism where it calculates the lots based on whatever you choose. So if you choose money management and then you choose 0.2, let's go to the calculator and let's show you what that looks like. Okay, so your capital is a hundred dollars and you're using.
I'm going to increase this. Okay, so I'm going to just take a different, a different number because it's not showing up on a hundred dollars. So I'm going to say here a one, a one lot. So what, what does that mean? Mm, one. It means that every trade that you take, your risk is going to be 1% of your account. So on a hundred dollars, it means that the robot is going to open up a one lot. That's what it means. So if we do here a risk of one lot on capital of $100, you can see here that, sorry, your lot size is going to be a 0.1, which is 1% of your account. Now what happens here is that you've got a capital of $200, so your lot size doubles. And that's where a lot of traders get it wrong. They don't understand that their exposure now to the market is double.
Now, how to avoid this very simply, with a robot, what you need to do is you can just drop this down and you can then choose rather balance. So your balance, if we go back to the. Over here, you can see your balance is less than your equity. So this balance is your actual capital that you've got. And that's how the robot will then see your money and leave the bonus alone. So this is a trick and it's not explained to you anywhere. That's why I'm here. I'm here to help you so that you don't make any mistakes and you don't land up with a hard drawdown. So when you are setting up your robot, rather choose, then change this to account balance and then your robot will then open up the correct lot sizes. So let's go to the calculator and let's do it properly. Let's put in $100 and then the lot size that the robot is going to Open is a 0.1. If you're using a risk of 1, don't use a risk of 1. That's very, very high. It's just an example that I'M showing you should be using. If you start you need to start with a 0.01 lot not even on money management. You need to be starting off with manual lot sizes at 0.01 so that you can see what the robot does and then you can make educated decisions. But that's not what this video is about. This video is here to explain to you how not to get into a high drawdown when you have the bonus. So by all means take this free money. It's fantastic but then you need to know the consequences. You need to know the consequences sequences of your decision when you set up the robot and you need to make educated decisions now that you know this information you can now make educated decisions. So Warren Buffett has a fantastic saying. He says risk is for those that don't understand. Now you understand the risk. So now you can make an educated decision. So the risk has now been mitigated. So I hope that you enjoyed this video and I'll see you on my next video. Cheers.
