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Managed forex trading account

Updated on September 20, 2012

The article will cover the features and peculiarities of managed forex trading - all the pros and cons.

Whether you are an absolute beginner in forex trading investment or just making your way to success, you are going to spend some time learning trading techniques, money management and other issues that matter the most in forex. There are a few options if you want to save your time and your day job and still continue trading.

First you can choose trading by using some forex signals service. This saves you much time and saves from the analysis headache, but you are still tied to receiving signals and managing manually your trades. If you are doing something else – you still might miss some profitable signal entries.
There are some signals providers who can tie your trading system with their signal service. When they enter a trade, their system sends a command to your account and the trade is made and managed automatically. However, there aren’t many forex broker accounts that have this feature.

Choosing managed trading account

The last option is choosing managed forex trading account. This alternative investment tool is widely used by serious investors, who have more than one fund portfolio (stocks, bonds) and want to allocate a portion of their money to forex trading. As we all know economical crisis brought a sell off of many stocks worldwide, whereas forex investors could still reap huge profits of tremendous value increase of one currency against the other - they just had to make the right decision.

Pros of managed fx account

Managed forex trading gives the ability to participate in a forex market 24 hours a day and avoid any trade analysis and decision making at the same time. There is no need to watch the market or wait for signals, because the trading and analysis are done by professionals. The opening of the managed forex account is almost the same as opening a real trading account for a trader, except that a real trader is able to manage his trades. He can enter, close and modify his positions, as well as withdraw his funds.
The investor who has a managed forex trading account can only watch his trades being executed, but he cannot manage them. He can also withdraw his funds anytime he wants, as well as add more funds, which is impossible for traders managing his account.
The trades are being done by professional traders who are working for a broker and the investor can even choose a trader, who is going to operate with his money. Every forex broker is interested to have the best possible forex traders, because it’s they who produce either a profit or loss and drive or scare clients accordingly.

Cons

 There are some slight disadvantages of having a forex managed account.

First – you cannot control your trades. I think it’s easier for an investor to monitor his trades when he knows little or nothing about forex and he is interested only in the final result – quarterly or annual profit. However, if the one who invests was or is a trader – then it may be difficult to watch how his trades are managed. He may disagree with the trade entry decisions, money management and stop loss or take profit placements.

You also have to be careful when choosing a forex investment firm. There are literally hundreds of forex brokers offering their managing services, but not all of them are to be trusted. Do not ever rush into transferring your money and signing contract with the first company you see on Google page. I suggest selecting only known and secure forex investment broker, the one who has good record and reviews in several sources – it’s your money at stake, after all.

Another shortfall is the minimum of the account to be traded – usually the sum starts from 10.000 dollars, and that draws away many average traders. Besides, despite of high returns promised by every possible forex broker, most of them charge a monthly fee from your trading account. The quantity of the fee varies, but it can exceed your monthly or quarterly return and instead of reaping some profit you will have a negative balance. I am not even mentioning the less successful months – you would still be charged.

Managed currency trading account can be an excellent means of investment, if you have enough capital and a trustworthy forex broker or trader. With both of those tools in mind it’s a great way to earn some money without trading yourself.

Comments

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  • chamilj profile image

    chamilj 

    7 years ago from Sri Lanka

    Very useful information. Can you name a good trusted international forex broker who offer forex managed accounts ?

    Thanks!

  • R L M profile image

    R L M 

    7 years ago from LA

    SUPER ADVICE;

    I LOVE FOREX TOO;

    it is a great platform to make money;

    using this type of investment and having trusted money manager make you money it is the best stimulus package that ever can be for anybody - go Forex.

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