Managed Forex Accounts are normally managed by professional traders who have very good expertise to use market opportunities and multiply their gains. In this article you will get to know about the best managed forex accounts to maximize your profit.
What Is A Managed Forex Account?
Forex account is different from other regular trading accounts in a perspective that it does not require only the direct trading by yourself like the decisions and the buying and selling of currency. Rather they allow the trader or the money manager to trade on behalf of you.
These accounts cost higher than the regular and also require a higher minimum deposit amount. The money manager deals with the market logistics just like the forex managed accounts but the account always remains under the owner’s control. The fund manager only gets the access to trade in the account under your control. Though the managed forex accounts give a disclaimer of a chance to lose money but mostly clients give their money manager full control over the transaction.
The most important term that one should keep in mind is that the accounts manager has limited time and deposit requirements and sometimes they charge for the early fund withdrawal.
Is A Managed Forex Account Right For You?
First of all, if you are someone who wants personal involvement and full personal control on your forex account, capital and position then a managed forex account may not be something that you would like.
On the contrary, if you like professional trading and sometimes take risk of your money for trading purposes, a managed forex account may be the best option for you. While opening a managed forex account, the hired trader must tell you about the risk level and all the other instructions you would need.
Managed forex accounts are great for you if …
- If you are busy to watch the market
A lot of people may not have time or experience for trading in the forex market. A full time commitment to a career may distract you. So a managed forex account would be the best option for you. As a managed forex account lets you handle your forex account indirectly yet effectively.
- If you do not have the psychological makeup of a trader
There are some people who do not have the best suited psychological personality for trading. Your wrong position may wipe out your whole account.
These might not be a fit if…
- You want to have a complete control of your trade and finance.
- If you lack enough capital to face any risk.
- You do not like to go through the required processes to open a managed forex account.
Benefits of Managed Forex Accounts
Usually expert traders with high capabilities manage the Managed forex accounts. This is the most liquid market in the world as it is faster in pace in the comparison to the equity market. Forex market is risky for inexperienced investors. On the other hand managed forex accounts are managed by professionals, so this is good for inexperienced investors.
There are some benefits of managed forex accounts given below –
Reliability
Managed forex accounts offer and give huge profits asset class exposure which is different from bonds and stocks. This platform allows the investors to control only their investment, so this is time saving as well.
Transparent environment
A forex managed account provides a transparent environment to the investors and traders. This ensures the safe and secure transaction for both the trader and the investor. Again, it is a win-win situation for both of the parties because both of them can earn something extra from their financial investment.
Investment
Forex market is quite risky for new and inexperienced investors because there is a huge chance of losing a major portion of their investment during bearish market trends. On the other hand, managed forex accounts do not have any such issue.
Huge profits
Managed forex account is one of the best ways to make a huge profit with a minimum investment of $5000. This brings at least 10%-15% of profit each month that investors can increase their returns to 70% to 100% of their investment.
Assurances for earning definite profits
Again, there are some offers from brokers to earn definite profits from forex investments and they charge a percentage of commission. The forex investment is very liquid and you can make profit from the managed forex accounts. The brokers give most reliable information to the investors which is useful for any decision making.
PAMM systems
Most of the brokers use the PAMM software system which is known as percent allocation money management. This software is used for permitting all the clients to attach money to the selected traders who manage one or more accounts with the power of attorney.
Features of A Managed Forex Account
The basic features of a managed forex account are –
1. The maximum drawdown
2. The type of ROI (return on investment) you expect on your money.
3. Different types of managed account models:
- PAMM (Percentage allocation management module).
- LAMM (Lot allocation management module).
- MAMM (Multi account management module)
- Types of trading and trading systems that managers usually imply.
- Whether the derivatives are part of the trading strategy.
- What type of signal automated trading software can be used? If there are any then which risk parameters does the software employ?
If you are willing to make money by participating in the forex market but at the same time you don’t want to trade by yourself, the best managed forex account would be the best option for you.
But one thing you must keep in mind that specifically the higher minimum deposit requirement means you have to share anywhere from 15% to 40%(even more) of the profit. Additionally you may have to pay for the brokerage and additional manager fees based on the account specifics.
On the contrary, if you are lacking sufficient risk of capital for a managed forex account or even prefer to trade your own money, you may get the better option of trading in a regular forex trading account, specifically it would be a better option if you already had a viable trading strategy.
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