Managed Forex Accounts
Using managed Forex accounts is one of the most popular ways to access the Forex market. These accounts are offered by many investment firms and they can be beneficial in some cases. Here are a few things to know about these accounts and what they can do for you as an investor.
Managed Forex Accounts
A managed account is a type of trading arrangement in which you let a professional trader trade your money for you. Instead of making the individual trading decisions for yourself, you let someone else do it for you. Many investment companies offer these services for people who want to dabble in the Forex market.
When it comes to evaluating Forex trading strategies, managed accounts can provide you with a number of benefits. Perhaps the biggest benefit of this type of account is that you can leverage the experience of a professional. Instead of relying on your own limited knowledge of the market, you can turn the keys over to someone who has been there before. In many cases, these traders can trade the market very successfully and you can reap some amazing returns.
Another benefit is that it can free up your time. Instead of sitting in front of the computer screen all day every day, you can be out doing what you love. Or in some cases, you can be out doing what you hate, working a job until your Forex income gets big enough.
When you invest in managed Forex accounts, there are a few potential drawbacks that you will have to deal with. One of the biggest complaints of these accounts is that you have to pay large fees for the service. The professional trader will usually get a large percentage of any wins. For example, you might have to pay somewhere between 20 and 35% of your profits back to the company. Of course, you wouldn't have these profits if it wasn't for the trader, it still can seem like a lot.
Another potential drawback of these accounts is that you are turning your account over to someone else. Even though you might think that you are working with a professional trader, you might actually make a bad choice. If this happens, they could blow out your account quickly. Basically, you better be sure of who you are giving control of your account to.
Leaving it To the Pros
When you use a managed Forex account, you are leaving it up to the pros. Imagine that you were about to play in a golf tournament and Tiger Woods walks up to you. He says, "You go relax in the clubhouse and I'll play the tournament for you. When I win, I'll take a few bucks and you can keep the rest of the prize money."
Would you tell him no? Of course you wouldn't! You'd hand him your clubs (or let him play with his clearly superior clubs) and get back to the clubhouse as quickly as possible.
Or imagine that you were at a bar trying to pick up a girl and Tiger Woods walks up. He says, "You go relax and I'll handle picking up the hottest girl in the bar for you." Just kidding :)
But seriously, the point of the story is this...when you have a chance to let a professional handle your trading for you, you might think about taking it.
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