When the currency market was opened to the ordinary investor via the internet a few years ago, a multitude of investors flooded the forex brokers hoping to get their share in the profitable pie that is the foreign currency market. But after statistics show that 90% of their forex investors got burned within the first three months of making their first trade, the realization quickly spread. Trading forex on your own might be dangerous if you are inexperienced since you may well lose you all or major part of your fund. Forex managed account is one of the best investment opportunities you can invest your money in and earn a monthly profit based on the amount of your investment.
A managed forex account allows a professional manager (or someone who claims to be so) to trade your funds on your behalf for a salary or a fixed share of the profits. You may select a specialized firm for this purpose or a broker that offers a sophisticated software feature that permits your account balance to be traded by an expert. The latter service does provide an extra level of risk protection. You must always be careful in selecting a money manager that you can trust and that has earned a good reputation in the industry. While most money managers are legitimate, there have been several notable scams in the past.
As with other online trading platforms which assist novice, intermediate and advanced investors, managed on-line accounts are a relatively easy way for investors to gain access to the currency markets with less risk than attempting to develop an independent forex investment strategy. A managed account also brings you the expertise of not just one trader, but a network of traders, researchers, and forecasters that have skills in different aspects of foreign exchange. That’s why the best reason to start with this option is that you can take advantage of their skills and follow their proven trading strategies.
A common rule for all regulated brokers is that the client allows the forex asset managers to trade on their behalf which allows the broker to pay a monthly performance fee to the asset manager. This fee is calculated using only the profits that the client’s account has earned over the last month. It’s very important to note that the forex account management agreement never allows the asset managers to add or withdraw funds from the client’s account. The international anti-money laundering laws only allow the client to make any additions or withdrawals to their broker’s account.
A Forex managed account provides both the money manager and the investor with a transparent environment, safety, and security of funds. There are benefits for both sides; the money manager earns an extra profit from collecting the management fee while the investor can earn profits from the Forex market without the need to have a strategy. Since managed trading accounts will require a forex account manager to execute transactions, you will want to make sure that you have done your necessary due diligence, and reviewed the past performance of the account manager you wish to hire.
