Forex Managed Accounts: Tips For Avoiding The Scams
If you do not have the skills or time to actively trade you can still benefit from the potentially lucrative forex market. A forex managed account gives you access to be able to trade forex without the need to watch the markets around the clock. A professional money manager can trade your account and help add some more diversity to your investment portfolio, without the added exposure of adding to investments that already may have too much exposure to the equities markets.
Managed Forex is the name applied to accounts that are traded on your behalf by an experienced professional trader, usually referred to as the money manager. The money manager is responsible for the trading the accounts of many account holders and their primary focus is to trade the accounts according to a specific rule set, and applying risk management and money management in compliance with that rule set.
When you decide to open a managed forex account you need to be realistic about the amount of "risk capital" you have to invest. Remember that the definition of risk capital is that capital that you can afford to lose without any major impact on your lifestyle. Plowing your whole life savings, your child's college fund or borrowing money at high interest to invest into forex is not a recommended practice.
Risk management is perhaps the most critical factor in managed forex trading. A professionally run program will have specific risk management measures in place to ensure that the risk of catastrophic trading losses is minimized, as far as is possible in this volatile market. Capital preservation should be the number one priority above all else.
Legitimate managed forex accounts will almost always have you invest your funds directly with a registered broker in a regulated jurisdiction. This arrangement gives you the best protection from potential scams, and also gives you significant control over your funds. Usually with trading accounts over a certain size your funds never actually leave your bank account until at the end of the trading month your account is credited any profits less the fees payable to the broker and the money manager. This gives you the ultimate protection as the funds are kept with a government guaranteed bank. You will also earn interest on the unused funds. This is definitely worth looking into if you have an account of over $1m.
The returns on this type of forex investment vary greatly. All you really have to go on is the trading history of the company involved. Simply because a company was claims good returns in the past, does not mean these returns can be guaranteed into the future. Your investment returns will depend on the prevailing market conditions and the ability of the money manager to best adapt to these conditions. Most reputable money managers aim for a relatively conservative figure of between 1 to 10%, but more importantly aim for consistent returns and low draw downs, or consecutive trading losses that eat into your trading capital.
When applying for an account with a reputable forex managed account company you will invariably asked to sign an LPOA or Limited Power of Attorney, this is a legally binding agreement between yourself the the account provider allowing them access to place trades on the account but does not facilitate them being able to withdrawal any funds. This gives you significant control over your own funds. - 23199
Managed Forex is the name applied to accounts that are traded on your behalf by an experienced professional trader, usually referred to as the money manager. The money manager is responsible for the trading the accounts of many account holders and their primary focus is to trade the accounts according to a specific rule set, and applying risk management and money management in compliance with that rule set.
When you decide to open a managed forex account you need to be realistic about the amount of "risk capital" you have to invest. Remember that the definition of risk capital is that capital that you can afford to lose without any major impact on your lifestyle. Plowing your whole life savings, your child's college fund or borrowing money at high interest to invest into forex is not a recommended practice.
Risk management is perhaps the most critical factor in managed forex trading. A professionally run program will have specific risk management measures in place to ensure that the risk of catastrophic trading losses is minimized, as far as is possible in this volatile market. Capital preservation should be the number one priority above all else.
Legitimate managed forex accounts will almost always have you invest your funds directly with a registered broker in a regulated jurisdiction. This arrangement gives you the best protection from potential scams, and also gives you significant control over your funds. Usually with trading accounts over a certain size your funds never actually leave your bank account until at the end of the trading month your account is credited any profits less the fees payable to the broker and the money manager. This gives you the ultimate protection as the funds are kept with a government guaranteed bank. You will also earn interest on the unused funds. This is definitely worth looking into if you have an account of over $1m.
The returns on this type of forex investment vary greatly. All you really have to go on is the trading history of the company involved. Simply because a company was claims good returns in the past, does not mean these returns can be guaranteed into the future. Your investment returns will depend on the prevailing market conditions and the ability of the money manager to best adapt to these conditions. Most reputable money managers aim for a relatively conservative figure of between 1 to 10%, but more importantly aim for consistent returns and low draw downs, or consecutive trading losses that eat into your trading capital.
When applying for an account with a reputable forex managed account company you will invariably asked to sign an LPOA or Limited Power of Attorney, this is a legally binding agreement between yourself the the account provider allowing them access to place trades on the account but does not facilitate them being able to withdrawal any funds. This gives you significant control over your own funds. - 23199
About the Author:
For more information regarding Managed Forex Accounts take a look at Forex Managed Futures. Brendan is also associated with Managed Forex Performance.
posted by X - Men @ 1:14 AM
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