| A managed forex account allows those who do not | | | | to be effective, which is why it is smart to invest |
| have the time, skill or motivation to trade this | | | | with a managed account program run by a team of |
| potentially lucrative market. The reality is that to | | | | professionals. |
| trade this market and be consistently profitable you | | | | Legitimate managed forex accounts will almost |
| need the types of skills that few people have. This is | | | | always have you invest your funds directly with a |
| why it makes sense to trust this task to trained | | | | registered broker in a regulated jurisdiction. This |
| professionals. A trained professional is someone who | | | | arrangement gives you the best protection from |
| has been able to consistently trade at a profit and | | | | potential scams, and also gives you significant control |
| apply the necessary skills such as disciplined money | | | | over your funds. Usually with trading accounts over a |
| management and trading according to a well | | | | certain size your funds never actually leave your |
| researched strategy. The process of course sounds | | | | bank account until at the end of the trading month |
| simple but few have the focus and discipline to apply | | | | your account is credited any profits less the fees |
| them successfully. | | | | payable to the broker and the money manager. This |
| A managed forex account is basically where you | | | | gives you the ultimate protection as the funds are |
| allocate the task of trading your brokerage account | | | | kept with a government guaranteed bank. You will |
| to a money manager. The money manager or trader | | | | also earn interest on the unused funds. This is |
| is tasked with generating a profit on the account in | | | | definitely worth looking into if you have an account |
| exchange for a percentage of the profits in the form | | | | of over $1m. |
| of a performance fee. The exact performance fee | | | | Often you will see claims on the internet about |
| varies but is typically in the range of 20 to 50% of | | | | potential returns that might use terms such as 50% a |
| profits, plus there may be an annual account fee in | | | | month or more. Whilst these types of returns are |
| the realm of 1 to 2% of the account balance. | | | | possible it is highly unlikely that they are sustainable. |
| Ultimately it is up to the individual to decide how | | | | Personally I have not witnessed anyone achieve |
| much to invest in a Forex Managed Account, just be | | | | figures such as thing for a prolonged period of time. |
| aware that trading on margin with high leverage is | | | | Much like the laws of physics where forces are equal |
| classified as high risk, and whilst these factors make | | | | and opposite, risk and reward are much the same. |
| it possible to start with a relatively modest | | | | You simply can't get large returns without taking |
| investment and get high returns they can also work | | | | large risks. The markets invariably punish those that |
| in reverse and cause significant and rapid trading | | | | ignore this rule. |
| losses. Be mindful of this when considering investing in | | | | Any reputable managed forex provider will provide |
| forex. | | | | you with the brokers LPOA or Limited Power Of |
| Trading on margin with high leverage is classified as | | | | Attorney. This is simply an agreement that allows the |
| high risk, however, managed correctly the down side | | | | money manager to trade your Managed Forex |
| risk is manageable. Through the use of strategically | | | | account without giving them access to withdrawal or |
| placed stop losses and strict money management it is | | | | otherwise handle funds. This gives you significant |
| possible to have effective risk management with | | | | protection from any abuse and also allows you to |
| forex. Of course a strict and professional level of | | | | revoke the LPOA at any time should you deem it |
| trading discipline is required if this risk management is | | | | necessary to do so. |