Managed Forex Performance: Avoiding the Scammers
A managed forex trading account allows a potential investor who does not otherwise have the necessary time or skills to participate in the potentially lucrative forex market. A managed forex account may also be suitable for the investor who prefers to have his trading account to be managed by a group of professionals. In keeping with the sound philosophy of diversified investments it is well documented that there is no true correlation between the forex and equities markets. It therefore makes sense to allocate a portion of your investment capital to a forex managed account.
A managed forex account is basically where you allocate the task of trading your brokerage account to a money manager. The money manager or trader is tasked with generating a profit on the account in exchange for a percentage of the profits in the form of a performance fee. The exact performance fee varies but is typically in the range of 20 to 50% of profits, plus there may be an annual account fee in the realm of 1 to 2% of the account balance.
Keep in mind that you need to be realistic about the amount of capital you allocate to forex trading. It is easy to be seduced by the thought of double digit returns per month and invest everything you have in it. It is fair to suggest that of your total capital a reasonable percentage to classify as risk capital is 10 to 25%. Don't be greedy and bet the farm, start with the minimum capital requirement and if it proves to be a profitable and well run managed account program invest what you can reasonably afford.
The risks of trading forex can be high but they are also controllable given that strict rules of money management are effectively applied. One benefit to using a regulated broker such as Dukascopy is that they can provide excellent trading tools to be able to risk management techniques in place. Be aware of course that forex trading is always purely speculative and any capital invested should be what is classified "risk capital".
When setting up a forex managed account it is very wise to keep control of your funds at every step of the process. By setting up an account directly with a registered broker in a regulated environment you have significantly reduced the risk of any funds being misappropriated by an unscrupulous company or money manager.
The combination of high leverage and virtually unlimited liquidity is something unique to the forex market. This along with the fact that the market is open 24 hours 5 days a week means that positions can be liquidated virtually at any time.
Invariably any reputable managed forex provider will give you an LPOA or Limited Power of Attorney Form to sign. This is simply a form that allows the money manager access to trade your account with a broker, whilst not actually allowing them any access to withdrawal funds. This gives you significant protection from any potential abuse. Be extremely wary if this facility is not offered to you as an investor. - 23221
A managed forex account is basically where you allocate the task of trading your brokerage account to a money manager. The money manager or trader is tasked with generating a profit on the account in exchange for a percentage of the profits in the form of a performance fee. The exact performance fee varies but is typically in the range of 20 to 50% of profits, plus there may be an annual account fee in the realm of 1 to 2% of the account balance.
Keep in mind that you need to be realistic about the amount of capital you allocate to forex trading. It is easy to be seduced by the thought of double digit returns per month and invest everything you have in it. It is fair to suggest that of your total capital a reasonable percentage to classify as risk capital is 10 to 25%. Don't be greedy and bet the farm, start with the minimum capital requirement and if it proves to be a profitable and well run managed account program invest what you can reasonably afford.
The risks of trading forex can be high but they are also controllable given that strict rules of money management are effectively applied. One benefit to using a regulated broker such as Dukascopy is that they can provide excellent trading tools to be able to risk management techniques in place. Be aware of course that forex trading is always purely speculative and any capital invested should be what is classified "risk capital".
When setting up a forex managed account it is very wise to keep control of your funds at every step of the process. By setting up an account directly with a registered broker in a regulated environment you have significantly reduced the risk of any funds being misappropriated by an unscrupulous company or money manager.
The combination of high leverage and virtually unlimited liquidity is something unique to the forex market. This along with the fact that the market is open 24 hours 5 days a week means that positions can be liquidated virtually at any time.
Invariably any reputable managed forex provider will give you an LPOA or Limited Power of Attorney Form to sign. This is simply a form that allows the money manager access to trade your account with a broker, whilst not actually allowing them any access to withdrawal funds. This gives you significant protection from any potential abuse. Be extremely wary if this facility is not offered to you as an investor. - 23221
About the Author:
For more information regarding Managed Forex Accounts take a look at Forex Managed Account Service. Brendan is also associated with Managed Forex Fund Reviews.
posted by X - Men @ 1:13 AM
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