A lot of people keep wondering what Forex Managed Accounts are. There’s a Forex currency market in which there are always currency rates changes going on. A lot of professional traders constantly make money on these rate changes. But there are also traders who manage clients’ accounts for a percentage of profit and this is called Managed Forex Accounts.
How do you choose a correct managing trader or managing company? First of all you should pay attention to how long the company exists and what sort of trading experience the managing trader has.
The schemes of accepting money by the company or trader are also very important. There are 2 schemes. First one is accepting money to their own accounts; second one is suggesting to open PAMM (Percentage Allocation Management Module) with a different broker. The 2nd sort is preferable as accounts with a different broker are opened into your name and it’s only you that can withdraw funds from them. In this way you protect yourself from possible cases of fraud.
Profit statistics is another important issue. Don’t chase super profits. The profit of 100% annual or more is very doubtful and risky. In Forex just like in any other business there’s a simple rule that applies: the more the profit is the higher the risk is and the lower the profit is the more risk-free the endeavor is. It’s very important to choose a balanced option. 50% to 70% annual is a normal average profit for Managed Forex Accounts.
I’m a Forex trader for over 9 years by now. The experience I gained gives me a chance to tell about most typical failures that beginner traders and investors make.
Article by fxmorgan.com