A Forex managed account allows individuals the ability to participate in the world of foreign exchange trading without having to actively do the day trading themselves. Instead, professionals experienced in the forex market will manage the capital for their clients.

There are three types of Forex managed accounts.

Standard Account

With this first type of forex managed account, the investor hires a forex professional to take care of the trading. Your capital is held in both your own and in your own name. You can check your account whenever you'd like. Since investors are meant to select a highly experienced and successful manager to handle their account, investors are much more likely to find profit with this method. On the other hand, such managed accounts can come with expensive fees.

Automated Account

With automated accounts, rather than the trades being performed by an individual, they are instead performed by a robot which has been designed by forex professionals. These robots, upon receiving a market signal, will perform the proper trade. Unlike with standard accounts, the investor does not have to face the exorbitant commissions and fees as seen with personalized management. Robots are not without their pitfalls, however: they lack instinct and can therefore miss important opportunities or cues that a forex manager may recognize and act upon.

Pooled Account

Pooled accounts can be a gamble. Unlike with standard accounts, you combine your account with the accounts of other investors and receive a percentage of the profits. You do not get to keep your own account, you do not get to keep your name on the account, and you are not able to access the pooled account and see its amounts or activities.

The greatest benefit of a Forex managed account is that it allows the investor to participate in the foreign exchange market, but without any of the knowledge or experienced required. All of the hard work and pressure related to forex trading is handled by an automated system or an experienced professional.

The disadvantage to Forex managed accounts is that they can be quite costly. This is especially the case when dealing with personalized accounts in which a forex professional is managing the trades. These managers can cost an investor both expensive fees and commissions.