Traditional forex trading is high risk and can be difficult, especially for beginners. In response to the complex issues related to traditional trading, the brokerage industry has developed a number of reasonable alternatives over the years that permit you to delegate trading control to another party. In order to use these options, you may still be confronted with the need for experience and emotional obstacles, and for these reasons alone, you may find the managed forex account an exceptionally alluring offer.
Managed forex account is a type of forex account in which a money manager trades the account on a client's behalf for a fee. Managed forex accounts are similar to hiring an investment advisor to manage a traditional investment account of equities and bonds. Returns and fees between managed accounts can vary greatly; therefore, it is important to research your options thoroughly before assigning your account to a professional manager.
Some managed forex accounts involve the trader "teaching" the manager what signals to look for and how to interpret them. It is thought that this form of managed forex takes the psychology out of managing personal wins and losses. Another managed forex account type uses the brokerage firm's own proprietary trading systems. However, it is important to note that there is no such thing as the "holy grail" of trading systems.
Managed forex accounts – in which a money manager trades a forex account on your behalf and deducts a fee or fees for the service – represents the third option available to those wishing to pursue some form of hands off trading, the other two being a forex signal service and using automated forex trading software. It is undoubtedly the most advanced of such options, because once you have set up the managed forex account with the vendor it is basically set and forget. The account manager takes care of all the rest.
Investors have live read only access to their managed account at all times, either through an online report viewer or directly through the trading platform. They can then view their account, including balance and profit and open and closed trades, however they will not be able to place their own trades on the account, unless they revoke their LPOA (Limited Power of Attorney), which as stated, is the document that enables the trader the ability to trade on their behalf.
