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Hello there! Are you looking to maximize your potential in the forex market? Look no further! My name is Deep, and I am a highly successful forex trader with a proven track record of delivering exceptional results. Today, I’m excited to share with you the opportunity to take your trading to the next level by availing my professional services.
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What Are Managed Forex Accounts?
A managed forex account is a type of currency trading account in which a professional money manager makes trades and transactions on a client’s behalf for a fee.
Individual investors who are not experts in foreign currencies but still want exposure to this asset class may consider a managed forex account. Managed forex accounts are also often chosen as sub-advised funds for money managers who want a currencies component to their portfolio but who do not specialize in foreign exchange (FX) trading.
KEY TAKEAWAYS
- A managed forex account consists of putting money in a forex account and having a professional trade those funds in the highly leveraged foreign exchange markets.
- Managed forex accounts offer exposure to an asset class much different than stocks or bonds.
- Managed forex accounts are high-risk, high-reward investments.
- Both individual investors and professional managers who aren’t FX experts can make use of managed forex accounts.
- Forex account managers do charge high fees: often between 20% and 30% of a trade’s earnings.
Understanding Managed Forex Accounts
Managed forex accounts are an investment opportunity for those who want the potential of returns from leveraged forex trading, are willing to take serious risks, and want to have professionals do the work of selection and trading. It consists of putting money in a forex account and having a professional trade those funds in the highly leveraged foreign exchange markets. Investors who opt for this sort of account have the hope and expectations of unusually large gains with the understanding that they could experience severe losses.
Managed forex accounts offer exposure to an asset class much different than stocks or bonds. Unlike these more traditional securities, which deliver returns in the form of share growth, interest payments, or dividends, forex trades gain in value as the value of one currency will rise or fall in relation to another. Those who invest in currencies will either do so as a means of hedging risk in international markets or as speculators who recognize the opportunity for large shifts in pricing and values between international markets.
Individual investors and speculators typically open forex accounts and attempt to trade based on their own knowledge. Many amateurs find this to be notoriously difficult, though the few that succeed at it are able to make extremely high returns—sometimes, quite higher than the return on equities. Using the services of a professional manager is a way to avoid the extra time, effort, and eventual loss that comes to inexperienced traders in this market. The hope is that a more seasoned professional can be trusted to deliver profitable returns.
Safety and Costs of Managed Forex Accounts
Foreign exchange markets are commonly used by sophisticated traders, who take advantage of an ability to handle large amounts of borrowed money to amplify their gains. They have more liquidity and trade at a much faster pace than do stock and bond markets—in fact, forex is the most active market in the world. And the fact that transaction costs on it are lower makes it a popular forum for those who enjoy the thrill of speculation.
At the same time, forex markets can be dangerous for the inexperienced trader who may not have a sophisticated understanding of the effects of high leverage on their returns, and who do not have a good perception of how different news events like economic releases or central bank monetary policy decisions affect currency prices.
Using a managed account, ordinary investors can take advantage of the expertise of an experienced and proven forex trader. The downside to this approach is that the best managers typically charge high-performance fees of between 20% and 30% of a trade’s earnings, or the account profits.