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How do Forex Managed Accounts work?

Did you know that trillions of dollars are traded every day on the Forex market? Do you want to join this market and get rich while making very little effort? You can now enjoy the profits and benefits of the Forex market by investing in a Forex managed account. This is a type of Forex account where a skilled, professional money manager makes trades in the account on behalf of a client.

They are able to provide this service at a small fee. Also known as a fund manager, this professional possesses a limited power of attorney for the purpose of trading in the account. Read on to discover more about this type of investment.


What exactly is a Forex managed account?


This is a combination of currency securities which you own. However, it is managed by a highly skilled fund manager. It can also be managed by a group of forex brokers. They can perform Forex trades on your behalf resulting in profits. In exchange, they charge some management fees. 


This type of account is designed for investors who want to participate in the Forex market but do not have the time or skill to trade actively throughout the day. As such, they provide funds that can be managed by an experienced Forex trader. In this way, the investors can reap the benefits of this market with minimal effort.

Pros

  • Forex managed accounts eliminate the operational risk of investing directly in the market
  • This type of account is highly convenient for those who would like this form of passive income
  • A managed account provides portfolio diversification
  • This type of account is managed by an expert trader hence you can expect profits
  • There are guaranteed profits
  • It is easy to set up and shut down a Forex managed account
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  • This type of investment has a low capital base
  • The account manager keeps you updated on the most recent developments in the market

Cons

  • Your fund manager may not provide full attention to your account since they are handling many at the same time
  • Using this method to invest in Forex limits your ability to actively trade 
  • You are unable to develop the skill required to make profitable financial decisions in this market
  • The account manager could embezzle your money and disappear

Trading risk of a Forex managed account

The operational record of the fund's manager could be useful in judging their prowess. However, it can be inaccurate. Furthermore, it is often almost impossible to evaluate the records due to general lack of oversight bodies and supporting information. Moreover, past performance does not assure future performance. As such, it is fairly risky to trade in a Forex managed account.

Conclusion

One of the most convenient ways to participate in the Forex market is through a managed account. This allows you to enjoy passive income from this market through the skills of a professional trader. The upsides and downsides of this are indicated above. Overall, it provides convenience at the expense of experience.

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