subject: Managed Forex Accounts - the Sure Means to Profit From Forex [print this page] Managed Forex Accounts - the Sure Means to Profit From Forex
Managed forex accounts have been around a long time. They have been around since the advent of foreign currency as an asset class in itself. The concept of forex managed accounts is not new. They've existed within the areas of stocks, mutual funds, bonds and commodities for decades. In essence they are just flexible investment accounts run by a professional.
Nearly 99% of all traders lose cash on forex. But this is to be expected, particularly when forex brokers are offering leverage of up to 500:1!
So, I will explain the lures, and dangers of leverage for you. This might be an eye opener to even some seasoned forex traders, and I'm certain that for some of the novice currency traders reading this, it will be completely new material. So,let's imagine a newbie, would be, hot shot trader sees an advert for currency trading, where he can use 500:1 leverage. He's thinking, Wow, great', who requirements to be sensible, and invest their dollars in a managed forex account, when they can take a few risks, take a gamble, and quadruple my funds with every trade. They are already doing the maths. With just a $1000 account, they can trade $50 a pip. So, for every 20 pip trade, they make a $1000. Wow! On average, the every day range of say EUR/USD is over 100 pips. And that's just one pair, what if I traded 5, 6 or even more currency pairs? So, let's say I make 5 trades a day - that's a 500% profit per day. So that's $5,000 on Monday, $25,000 on Tuesday, $125,000 on Wednesday, $625,000 on Thursday, by the end of the trading week on Friday, he's got over $3,000,000 in the bank, and he can retire.
I don't think this is such a unique though method to have. However, for most individuals, once they've finished dabbling inside the markets themselves, they uncover a reputable managed forex account to give themselves access to the lucrative world of forex trading. But in a similar vein, the leverage can also trigger large issues for a currency trader.. The spreads will cause you a massive drawdown, and with a volatile currency, as most are, and you may blow your account in several short, but pricey, minutes!.
And so this is the honest rationale why forex investments have grow to be so common - the greed of so many traders who feel they can beat the system, to make millions where the masses have failed. To discover the elusive magic wand of forex trading. But reality sets in after heavy losses, and most move on to invest in a basic managed forex account.
At the end of the day, the only method to make certain you've got a chance at profiting from the forex market would be to leave it to a pro, and invest in a managed forex account. After all, you wouldnt wire your own home to save paying an electrician?
It is of paramount significance that an investor carries out their due diligence first, for instance seeing detailed account statements, performing a background check on the forex fund manager etc.
As a result, we can see that trading within the foreign currency arena is fraught with difficulties, and you're much advised to study a well run managed forex account. Whilst it is possible to give some credit to these individuals for trying, it's nearly always additional profitable to invest in a properly run managed forex investment.
