Raw account rebate / IB cashback: does it change pair selection?

[LondonScalper]

Cashback is one of those things I told myself didn't affect my decisions. Then I looked at my numbers for the last two quarters and had to admit it probably did.

The setup: a rebate of a fixed amount per lot traded, paid monthly, on my main raw account. Same rebate on every symbol.

Here's the issue. A fixed rebate per lot is a much bigger slice of the cost on pairs where the all-in round trip is small. On EURUSD my average all-in cost was around $7 per lot and the rebate covered a meaningful part of that. On something like GBPJPY in the afternoon the cost was nearly three times higher, so the rebate barely registered.

Looking back, my share of EURUSD tickets rose from 41% to 58% after I joined the rebate scheme. EURUSD is my best pair anyway, so I could argue it was a good change. But I also noticed more marginal EURUSD trades in quiet hours, the kind I used to skip, and their net result after rebate was roughly flat. Before rebate, slightly negative.

That is the trap. The rebate turned a bad habit into a break-even habit, which made it invisible.

What I've done about it: my journal now records performance with and without the rebate in separate columns, and I judge a setup on the version without. The rebate goes into a different column, as income, not as part of any setup's edge.

If a setup only works with cashback, it doesn't really work.

[Shadow Trader]

The rebate turned a bad habit into a break even habit is the best summary of this problem I've read. It also works the other way on high cost pairs, which is easy to miss.

If the rebate is fixed per lot, then a GBPJPY trade with three times the cost looks relatively worse after rebate than before, so you might drop it even if it's a decent setup. The rebate shifts the comparison between pairs, not just the total.

I did the sum once with a 3 dollar rebate. That's a 43% cut on a 7 dollar EURUSD round trip but only 15% on a 20 dollar cross. That gap pulled me toward EURUSD too, and toward quiet hours where the edge was thin.

Your two column fix is the right one. I'd also add trades per hour by session, because the creep shows up as more tickets in the 11:00 to 13:00 lull.

Did your quiet hour count drop back once you started judging without the rebate?

[Shadow Trader]

Another thing rebates do that doesn't show up in pair selection: they reward trade count, so they nudge you toward splitting positions.

I noticed I'd started scaling in with two half lots instead of one full lot entry. Same total risk, but the rebate was paid per lot on both, and the extra commission was mostly covered. On paper it looked free.

It wasn't free, because the second entry had worse fills on average, around 0.2 pips. Over a few hundred trades that ate most of what the rebate paid back.

The cleaner test for any rebate is to imagine it stopped tomorrow. Which of your trades would you still take, and which would look silly? Anything in the second group probably exists because of the rebate.

Has anyone switched off cashback entirely to see if their trading changed, rather than just tracking it separately?