Financial markets bring a certain level of excitement and risk.
As you open a Forex account for the first time, high profits are the only thing on your mind. Most traders don’t even consider bad performance, capital loss or bankruptcy; they think it’s easy to make money with smart currency trading and proper management of funds.
Unfortunately, you quickly learn that it’s hard to make high returns without any experience. For some investors it may take years before they start making real money.
Even if you are a well-educated trader, there are emotional factors that may affect your investments.
This is where managed Forex accounts come into play.
What is a Forex managed account?
Like with any other financial market this is a Forex service where professional investment manager will invest on your behalf. In return, expert will receive a fixed monthly free or percentage of profit.
Managers can also provide some other services such as choosing a suitable broker, creating profitable strategies and can give you a free trade advice that will help you out in future. Top investor should also be a consultant of sorts.
Before you choose a company or an individual that will manage your account, there are certain things you have to consider.
First and foremost you need to check manager’s reputation.
There have been a lot of frauds in recent years and you need to make sure that everyone, from Forex brokers to an independent manager, will do their part. There is no point in investing or giving another person access to your account if he will lose everything due to an irresponsible behavior or a fraud.
Next thing that clients need to consider is type of investments that expert is performing.
Even if he doesn’t embezzle your deposit or do something else that is purposefully harmful, there is always a chance he will invest in something risky.
One of the best options for you is to go with a reputable account manager, to place minimum deposit and to use low leverage. Through relatively safe trades, you can learn more about FX market until you’re confident enough to perform analysis and exchange foreign currency yourself.
How do managed Forex accounts work?
Please have in mind that managed live account is not ideal; even if you have a great expert on your side who takes reasonable fees, you still have to pay these commissions which will eat away part of your profit.
So in which cases should you go for this managed Forex accounts service?
- Are new to Forex or financial markets in general
- Don’t have enough time to manage an account
- Know a manager that is reliable and can make profits that are well above market average
- Are too emotional but still wish to participate in market trades
Regardless of all the advantages, I still suggest that you start managing account sooner than later. Managed Forex account should only be a transitional phase as you get more experienced and learn how to work under pressure.
The only real reasons why an experienced trader should get a manager is because he doesn’t have enough time or his health is preventing him from trading day-to-day.
To sum it up
There will always be a need for managers and managed Forex accounts.
However, if you wish to pursue a Forex trading career, make sure this period doesn’t last for too long. You can learn a lot from managers but sooner than later you will have to start doing it yourself!
Have you ever had a professional account manager? What was your experience?
Tell me everything in the comments below! Make sure to visit our website regularly for latest Forex news!