Thursday August 18, 2016 - 16:50:33 GMT
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Managed forex trading account
Managed forex trading account allow individuals tap into the foreign exchange markets by allowing other people or organisations to trade their money for them. Managed forex trading is a growth industry as more and more people are introduced to forex investment opportunities online.
The managed forex trading account allow forex traders to trade on your behalf and many use different ways of making trading decisions.
Forex traders typically use three forms of analysis to determine what currencies to buy and what currencies to sell.
Economic, as economic news drives the currency markets.
Fundamental, as the fundamentals behind each economy and the implications for the currencies of that economy and how they will be effected.
Technical, traders and chartists use indicators, algorithmic trading and statistical and maths to play a role in analysing the strength of different currencies.
At the end of the day though you are relying on someone else’s skills, experience and ability to make you money, and that comes at a cost.
The cost in a managed forex trading account is mainly split into two parts, part one is the cost of fees charged on the account, usually as performance or incentive fees, often an additional cost in transacting added on to create additional revenue for the traders and brokers and sometimes an annual management fee.
The second cost is risk, the risk participating in a highly leveraged product, where the fees charged are encouraging the traders to take a more aggressive approach, as the more they trade and the more they make on the investment the more they are paid.
Overcome these and a managed forex trading account can be a lucrative high yield investment as often they target higher returns due to the nature of the market.
Returns of 3 -5% a month can be generated from managed forex trading accounts and after commissions of around 30% often can create a 3% monthly return. Accessing these returns is a little bit of a mine field, but follow these tips and you might find a great forex investment opportunity.
Regulation: Check the group or organisation are regulated and comply with the local financial services rules on managed forex trading accounts
Track record: Ensure there is a consistency of performance and that there are not large losing periods
Access to funds: Ensure you can access funds if required
Domiciled: make sure they are domiciled in places like London UK or Sydney Australia as these tend to be regulated and most companies are under a lot more scrutiny and you are protected by financial services laws.
Define the opportunity: Is it high risk, medium, how much of your funds are you committing to a leveraged investment service, 5% 10% 15%?
The history of the team you are allowing to trade your money
These are a few simple starters that may help you weed out the best way to invest in forex investment opportunities.
You need to think about what you are trying to achieve and balance the risk with the reward and then if you start small, and pull some funds out to check everything works and add it back again, you will get a feel for the opportunity.
Most investors should start with the minimum amount and monitor the results for the first few months and then top up to your required level of investment after you have proof of performance, IE your account has grown as projected.
Simple be careful while browsing the internet as you may find there are a lot of unregulated opportunities out there, best to stay away from those and stick to those with licenses, either FCA or AFSL regulation.
Larger returns are created using larger risk and check what the largest open drawdown was on the account too.
Managed forex trading accounts are a great investment tool if you do your due diligence and research.
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