The world of Forex is not easy to conquer because of the ever-fluctuating market and advanced technical analysis involved. Moreover, major financial and political changes cause changes in the currency market within the span of one day. It becomes difficult to calculate leverage and strike the most profitable deals unless you are familiar with the functioning of the Forex market. A managed forex account can give stress less trading opportunity to the traders.
You might be dreaming of overnight multi-million-dollar success, but that is a rare occurrence. Instead, you should be looking to have a steady income as a trader so that you can build your financial portfolio. The world is always trading in the liquid market that is Forex, and you cannot afford to slack. You might have a lot going on in your life that you need to take care of, but remember Forex will not wait for you.
The journey from a beginner to a professional is long-winding, but the result at the end of the road is well worth the wait.
If you are a beginner, then you should know that you will have to face both losses and gains before becoming an expert. However, if you want to be on the safe side, you can always hire an account manager who would take major decisions for you. You might have even subscribed to courses and bought trading systems in order to improve, but the lack of appropriate money management skills and knowledge of trading psychology stops you from succeeding every time. That is when the manager will come to your rescue.
On the other hand, you might be interested in Forex but do not have enough time to devote in which case a manager will make sure that your account stays afloat.
Forex account managers are professionals who keep an eye on the market ups and downs throughout the day and hence, have the ability to make the best deals. You will be able to eliminate much of the guesswork and depend on solid expertise.
Before you decide to have a managed account, it is important you know a little bit more about it.
So What Are Managed Forex Accounts?
By now, you must know that a forex account which is handled by an experienced money manager on behalf of a client is called a managed Forex account. Of course, these managers charge a fee for offering their services. You can compare this practice to hiring an investment advisor for handling all your traditional investments, equities, and bonds.
In the beginning, you might find discrepancies between the returns you are getting and the fees you are paying. This might be because you chose a manager without much experience. The managed Forex account sector is prone to scams because people often make false claims in order to increase their customer base. You might be looking forward to making enormous profits in exchange for a portion of that money, but the manager lacks the potential to make that happen. But once you have invested your money, it is difficult to get out of the business without suffering a loss.
An ideally managed account should not undergo any major losses and maintain a consistent performance from the first few weeks.
Different Kinds Of Forex Managed Accounts:
All managed Forex accounts do not function the same way even though their main objective is to make sure that your account is well-handled at all times. Different providers prefer different methods of management, and you should go with one that suits your needs. When you do your market research, you will find that the following are two of the most common types of accounts.
- Some traders prefer to have their accounts managed in a way they personally prefer. They teach the manager what signals to watch or in particular, and then help them make interpretations. This is perfect for traders who have been a part of the Forex world for a while, and do not want their trading style to be hampered. By telling the manager exactly what to look for, they ensure that they make profits without ruining their signature.
- For complete beginners, it is not possible to give their managers specific instructions. Hence, these managed Forex accounts utilize the brokerage firm’s proprietary trading system which helps them make the best decisions for the account. However, there is no perfect trading system in the world which means you cannot expect everything to be flawless just because you have hired an account manager. Legitimate service providers make their trading systems based on years of experience and expertise to ensure that customers do not suffer financially, but that is not foolproof because Forex trading is all about risks and odds.
Choosing a Manager:
As mentioned before, you must spend a considerable amount of time choosing a good Forex account manager if you do not want to regret your choice later on.
You can go for a specialized firm which will handle all your problems professionally. Alternatively, you can hire a broker who has advanced software features which let you use an expert for trading purposes.
Different providers will ask different amounts of capital from you before you begin the business. Usually, account managers have a minimum requirement of capital that you need to invest before they agree to manage your Forex account. There is no fixed value, and you will have to find out more by talking to the individual companies. If you are just starting out, chances are that you will not be willing to devote a whole lot of money so you should find an account manager who does not have a strict threshold.
Do remember that the investor is still in charge of the account even though the broker is managing the funds. The trader or the investor has every right to oversee how money is being spent and here. However, when there is a lack of instructions, the account manager has the right to take decisions on his own.
What is a profit-sharing system?
When you are hiring a professional account manager, you must be prepared to let them have a share of the profits you will be making. The profit sharing system is common among most providers, so you will not be able to escape if you want to hire a big company. It is based on a commission percentage which is different for different providers.
If you are hesitant about it, then you can choose brokers who start sharing the profits only after the client has reached a 100% gain in his or her account. This means that unless your account has a minimum of double the amount brought in by the investor, you will not have to pay the profit share. This method ensures that the manager works hard to bring in money and you pay them only once you see the results.
If you are hiring an account manager, then you must take into account what you are actually losing every time a deal is going awry.
Some traders are determined not to hand over the responsibility to a professional and end up losing several trading accounts in succession. This is especially common among those who have already seen some good months of trade with their own efforts. However, when the loss periods are just as drastic, then you end up making no net profit, which is equivalent to a loss in the world of Forex.
If you compare the loss you suffer due to unsuccessful trading with the performance fee you would have to pay to a trading manager, you will find that they balance each other out. It is better to invest in something that will give you long-term profitable results than spend that same money due to bad deals. Would you prefer sailing over smooth waters or a roller coaster ride when it comes to your hard-earned money?
There are quite a few Forex traders who feel hesitant to take expert help because it makes them feel they are not good enough. However, that is a wrong perspective to take because associating with professionals can only make us better.
Hiring experts to improve success rates is something that is common in most professionals fields. You do not need to be a lone wolf just because you are a trader. Moreover, you have the opportunity to diversify your trading skills and learn new strategies when you work with a Forex trader and money manager.
So should you or should you not hire a professional manager for your Forex account?
If you are looking some direction and help in order to become a better trader, then a manager is exactly what you need. It is not a permanent arrangement which means that you can go back to handling the account on your own once you have learnt the ropes. Research into the background of the manager you are hiring and ensure that they come with years of experience.
The capital you put into Forex trading deserves to be maximized, and a manager will help you do just that.