Do You Know Which Forex Managed Account Is Right For You
Thursday, 9. July 2009
|
Traders - Do You Really Want To Learn How To Trade, Stocks, Futures or Forex Using Momentum As A leading Indicator? Click Here To Learn From A Master Trader Free 5 Day Video Trading Course Free Proven Money Making Trade Setup Over 90 Minutes of Expert Trading Education Free |
Forex managed accounts present an attractive opportunity for people who want to make money from the lucrative currency trading markets but cannot or do not want to learn to trade for themselves. A managed account means you do not have to do the trading yourself. You are placing your fund to the management company to act for you.
There are two basic types of forex managed accounts.
1. Forex Standard Managed Accounts
With this type of account, your money is kept in your brokerage account in your own name and the manager simply has control over it so that they can trade with it. A benefit is that you can always veiw your fund and see how it is doing. It remains your money.
Even the most skilled account manager can not predict the market with 100% accurrace, therefore there will be losses at times. The broker will need to cover their fees and make you a profit.
Crush the forex market with the best forex trading robot.
2. Forex Pooled accounts
Although rare, there is the risk of fraud with pooled accounts. Here, your money goes into a pool held by the account manager. You are paid a share of their declared profits.
The theory is that the pool creates a buffer and your profits and losses will be evenly spread and thus more predictable than in a standard account. Be aware that you will may not know what is going on behind the scenes and there are unscrupulous companies that may make small payments, but in actuality are stealing your money.
It is a sure sign of trouble when an account manager guarantees a certain percentage of return in a pooled fund account. There are no guarantees with forex trading and any company that makes promises of a 10% return or whatever should be treated with extreme caution.
There are well run pooled accounts, and these will carry with them the benefit of more stability than standard forex managed accounts. However, you should research a company offering pooled accounts even more thoroughly than usual before you decide to invest.
Whether you choose a standard or pooled account, you need to shop around. Don’t be pressured into signing up with a specific broker. This can be a concern because they will have the incentive to make many small trades regardless of profit just to up the broker’s own earnings. Even if their commission is worked on a different basis, you probably will not get the best or cheapest broker that way. A reputable comany will allow you to select your own broker for your forex managed account.
You should also consider one of the many software solutions to automate your trading. Automated forex trading robots can take the emotion out of forex trading and increase your chance at success.
