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What Is a Managed Forex Account?

A managed Forex account may be the perfect setting for someone with no time or no interest in trading the Forex market themselves. A managed account is often thought of as the ultimate way of having your money work for you.

The concept of a managed Forex account is nothing new. If you are at all familiar with mutual funds do you already have a basic understanding of how this account would work. In a managed Forex account a money manager or group of money managers make all of your trading decisions for you. They decide what to trade, way to trade, how much to trade, as well as how much to risk.

When managed account started trading day were only available to be very, very wealthy. Now managed Forex accounts have a variety of levels of entry. If you can get involved for a lot less than was previously thought possible. Money managers can trade a group of smaller accounts as one large account. For instance if the minimum to open a certain managed Forex account is $5,000 and may have 100, 200 or more individuals and trade it all was one account. Each of the individual participants within a share in the profits in proportion to their initial investment.

There are a number of advantages to using a managed Forex account:

Experienced money managers — having a professional Forex money manager Lee trading decisions for you can give you the benefit of many years of Forex trading expertise.

Convenience — not having to deal with the decision-making and trading process is a huge factor for mini busy people. A managed Forex account is the ultimate in convenience.

Diversification — because of the typically larger asset base of a managed Forex account you’re able to take advantage of a greater level of diversification. Using a $5,000 account as our example the trader will only have enough capital to trade a few currency pairs. With an asset base in the hundreds of thousands or even millions of dollars money managers are able to trade virtually any combination of Forex pairs. The money managers are also able to use a wider variety of Forex trading systems.

Managed Forex accounts can be an excellent way to make your money grow. It is important for you to understand that you will need to do your due diligence before placing any money in any managed Forex account. Here are a few things to look for:

Are they registered? — for those doing business in the United States your money manager needs to be registered with the Commodity Futures Trading Commission as well as be a member of the National Futures Association.

Real-time track record — we could spend an entire book just on how to evaluate the track record of a managed Forex account. Naturally, it is important to look at the return on investment. The return on your investment needs to be high enough for it to make sense for you to take the risks associated with Forex trading. Also make sure you look at the level of maximum drawdown to help you determine the level of potential risk involved. Regular steady returns will give you more piece of mind than larger sporadic returns.

You can see managed Forex account do have many advantages. If they are not all created equal is up to you to do your homework and select the one that fits your investment needs. One last important to keep in mind is that past performance is in no way a guarantee of future results.

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