If you’re interested in trading Forex, then you might have looked into “Managed Forex accounts” in the past. Essentially, these are a kind of foreign exchange accounts that you can use for trading. In a managed account, a financial expert will trade on your behalf, and you’ll pay a fee for their service. Usually, this is a good option for people who don’t have the time or skills to invest in Forex on their own.
There are a few companies offering such a service, but you should be careful when selecting your broker. We can highly recommend the IronFX brokers who have a long standing tradition and are regulated by the top tier regulators which makes them a safe bet. Additionally their managed accounts offer more and less risky investment options all having a great long term performance. You can check their performance here:
Managed accounts are similar to hiring a personal investment advisor, who lets you know when you should put your money into a new opportunity. The fees and returns on your managed account can vary depending on the company or individual you choose to work with. As with most financial decisions, it’s a good idea to compare your options before getting involved with any specific provider.
How Do Managed Forex Accounts Work?
Managed accounts can be useful for traders from all backgrounds. They give you an excellent degree of exposure to different asset classes and allow you to diversify your investment strategy. Unlike bonds and stocks, managed fx accounts look at the FX market and build wealth through predictions on whether the value of one currency will drop lower or rise higher than another. Some experts refer to foreign exchange traders as people who “speculate” rather than invest.
Anyone who starts buying and selling on the FX market earns the name of a “trader.”This title is often used slightly differently to the term “investor.”If you’re an investor, you generally hold onto your assets for a long amount of time, allowing it to build in value. On the other hand, if you’re a trader, you make the most of the short-term changes in your chosen market.
Foreign exchange markets are most popular among traders who can strategically manage large amounts of borrowed money, improving their gains over time. Compared to other markets, Forex has far more liquidity and delivers faster-paced trading than most too. Because Forex is the most active market available today, the transaction costs associated with it are usually lower too.
Are Managed Forex Accounts Safe?
No trading environment comes without any risk.
Forex markets, like anything else, can be dangerous depending on how you approach them. If you don’t understand the market, or how to make the most of your investments, then you’ll struggle to get anything out of your foreign exchange trades. The people who get the most out of FX are those who learn how to respond to monetary decisions in the banking world of economic changes. If you want to get started with forex trading on your own than we can recommend you to check out our favourite forex trading platform called Plus500 or check out our whole list of the best forex brokers.
Who Are Forex Managed Accounts Meant For?
This accounts are an effective solution for people who are interested in trading foreign currencies, but don’t have a lot of experience in the market. With a managed account, you can tap into the specialist skills of another trader. Of course, you will need to pay something for the expert help you get. Some Forex managers charge up to 30% of your trade earnings.
When you’re choosing a managed account, make sure that you look at the Calmer Ratio of the account manager, you’re thinking of using. This gives you an insight into the average annual compound rate that the trader gets. Assessing this ratio will provide you witha basic overview of the success of the trader over a three-year period. If their ratio is higher, then their risk-adjusted return should be good too.
Want to know how to find the best managed fx accounts? Check out the video below:
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