A managed forex account allows a professional account manager to trade your funds on your behalf for a fee or a fixed commission. Some trading software have a special feature which allows ordinary clients to be money managers and to trade for others while using the account structure of the broker. This is considered one of the safest way to use a manager as it minimizes the risk that the account manager will somehow run away with the funds.
Advantages of Managed Accounts
- There are a number of benefits that a managed account offers to the trader. Clients gain from the experience of a professional with long term involvement in the markets.
- As new traders lack experience and skill, hiring a money manager may seem to be a good choice.
- If you are too busy to give your investments the attention they deserve having a professional manager to run your portfolio may be your best solution.
- A manger will help investors overcome the emotional difficulties involved in trading that cannot be tolerated by everyone, because each person has a different character and some are more prone to emotional extremes than others.
- Managed accounts often include services of top money managers using investment systems with highly successful track records.
- Online traders who act as managers provide their past records to provide guidance on potential future returns. This knowledge may also help the beginner in choosing the best offer for himself.
Disadvantages of Managed Accounts
- By allowing the manager to trade on your behalf, the trader does indeed benefit from the experience and knowledge of that person. However, you lose the opportunity of learning in the markets by practice and study.
- There are different types of account managers: good, bad and mediocre. Obviously, it’s not worth paying for anything less than the best manager you can find.
- If you enjoy participating in the markets, have the time and knowledge to create your own trading strategy, and are satisfied with your results, you don’t need to turn your money over to someone else to manage.
- You may be able to do it more cheaply on your own.