subject: Opportunities To Trade In The Market [print this page] Having the e-forex industry grow will attract traders to managed accounts. Problems arise because of the track record say the former head of foreign exchange trading in the Asian region of a major financial institution who has managed billions of dollars in the forex market.
You will want to hire an advisor with at least a three year audited track record or a verified profit and loss statement from a major bank. E-forex brokers are generous enough to provide a leverage of 100 to 1.
The fees you need to pay for managed e-forex accounts are similar to other managed accounts. In the same note, you are expected to pay 2% of the account balance per year for the management fee, a 20% incentive fee on new equity highs and a small transaction fee. Read on and know what you need to ask a prospective money manager on how he will handle your e-forex account.
Know what percentages of trades occur during the day session.
There is opportunity to trade when the Asian session opens at 7 p.m.EST, Europe at 2 a.m.and the United States at 9:30 a.m. Not bet can be your best bet occasionally.
What percentage of the trades went down by more than 50% before recovering to break even or profits is the second thing you want to ask. Typically one will notice that when they hire money managers with low drawdown is that you also have lower expected returns.
Keep in mind that the next question to ask is what intermarket indicators the money manager studies. It is always good to know why the manager does not look at the dollar index, the major stocks exchange markets, gold and oil.
The next question on the list is what has been the manager's worst trade. It might cost you in the future if you get a manager that is not yet developed his defensive skills through experience.
The fifth question you want to ask is how much of the profits the manager reinvests. Inquire if he normally redistributes money earned to another account. This helps lessens the risks you will have.
Sixth, ask what his strategy is for worst case scenarios. There is always a chance when you will have to deal with stubborn accounts. Tactics might involve hedging or rotating to new currency pairs.
One essential thing to note as well is what returns can you expect. A manager who is able to answer this is a manager you can hire. If he can accomplish the latter it is best to take care.
