Managed Forex Accounts: Why You Should Leave It To A Trained Professional

Managed Forex trading refers to a form of investment in the forex market where an

account holder has their account traded by a professional money manager. The company or individual, is effectively responsible for placing forex trades on behalf of the account holder. This can be a suitable solution for those with the risk capital to invest but not the time to trade the forex market.

High Leverage plus High Volatility Equals High Risk

Attractive factors such things such as high liquidity, high volatility and high leverage all combine to make forex appealing for those with reasonable capital and risk tolerance to obtain higher than average potential profits on their investments. But of course investors need to be aware that with increased returns comes increased in risk. Having said that there is no form of investment that comes without some exposure to risk.

Risk Management

Risk management is always the key element to successful investing. This is why it is best to entrust this task to a professional money manager who is suitably trained in the discipline of risk and money management. Forex, however easy it may look to the casual observer, is fraught with potential pitfalls for the unwary. Often the figures we see quoted are in the realm of 95% of forex traders fail. Whatever the statistics say the fact remains that the chances of succeeding as an amateur trader are very slim indeed.

Historical Performance

The solution then is to find a managed forex provider with a proven track record of providing consistent returns for an extended period of time. I would suggest that 2 years is a sufficient amount of time to judge whether the traders strategy and performance is satisfactory. Performance records for 3-6 months simply isn't sufficient to make a sound judgment call on whether a particular strategy is robust enough to endure the many different types of market conditions and changes in "market personality".

Due Diligence

Once you have narrowed down the search for a suitable managed account provider it is necessary to complete due diligence on each of them. Don't try to shortcut this step and take the advice of strangers on the internet who may well have a vested interest in pointing you in a certain direction. Search the internet for information in regards to the company in question, positive or otherwise. Insist that the company furnishes valid and verifiable trading statements or reports audited by a recognizable authority. If they are hesitant or unable to furnish these reports this should be a warning sign.

by: Brendan Wilson

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