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Forex Managed Accounts
Forex Managed Accounts
A managed trading account is a unique opportunity that has developed from changes in technology and broking, and forex managed accounts are getting more and more popular as main stream investment and wealth management companies start to view them as viable trading vehicles for their clients.
There are two types of customer who seeks forex managed accounts out as part of their investment portfolio, retail investors and wholesale investors.
Retail investors tend to find their own way around planning and investment opportunities, whereas wholesale investors are often offered the opportunity as part of a possible basket of options from their IFA’s or wealth managers.
Retail investors use word of mouth or research their opportunities on the internet, or are pitched different opportunities through their email address or on the phone by telesales or telemarketing companies.
Whole sale investors generally choose a forex managed account to look after a small portion of an overall portfolio, to help increase the yield across the basket of investment products.
Why are forex managed accounts so popular?
Well often the best way to invest in forex is to open an account and learn to trade the markets, often using a demonstration account with play money in, to help the learning curve. Retail traders who try this often struggle to master trading as it does take years and years and lots of experience to master anything, so they either give up and move on or give it a try with live funds and invariably lose most of their initial trading account.
So the idea of accessing the returns possible and getting someone else to do the trading is a great option, especially as often the returns are higher than the traditional returns available from banks or property investments. This is the dynamic that has created the fertile ground and the interest in forex managed accounts.
Many are based all over the world and tracking down who they are and where they are domiciled is the first important thing a prospective investor needs to do.
Sure a nice website and great trading results looks good, but are they real, where is your money going to go and can you get access to it, these are all important considerations, regarding a managed account.
A quick check list of things to lookout for are the regulation of the company, make sure it is regulated in the UK or Australia, as both these jurisdictions are very hot on compliance and regulation and as such provide the investor with a safer environment with which to base their investment decision from.
Find out all about their performance of the trading and especially two important questions, what is the maximum drawdown on the account in closed trades and what is the maximum drawdown on the account in open trades.
Sure, it looks great if a company makes 8% in a month, but how did they achieve that and what was the worst open drawdown over the account and what is the longest losing streak, if it is minus 15% at some point, then it is obvious that the account is being traded quite aggressively, and caution may be required.
Check on the trading experts track record, and look at how long the record runs for, check who the regulator is and who is the licensee actually is, and obviously look at performance and the fee structure they use to charge you for the service.
There are funds that target larger investors where the return is smaller, the risk schedule is much tighter and the minimum investment can range from £100,000 to £5,000,000 minimum investment amount.
There are forex managed accounts that target smaller investors where the returns are higher, more risk is applied and the returns are projected to be much higher than the larger institutional or wholesale forex managed accounts.
There are many places that you can get information about which forex managed trading service to join and you can use forums and blogs to help your research and due diligence put in search term such as managed forex trading good reviews, or top forex managed accounts and you can access a lot of information that will assist you to make an informed decision.
Remember the best way to invest is to find a product that suits your needs and is regulated and compliant so you are also protected. Past performance does not always guarantee future returns, so be cautious and careful when identifying good companies to help you manage your forex account.
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