Managed Forex is the name applied to accounts that are traded on your behalf by an experienced professional trader, normally referred to as the money manager. The money manager is responsible for the trading of accounts of lots of account holders and their primary focus would be to trade according to a specific rule set, also as applying risk management and money management in compliance with that rule set.
Should you don’t have the abilities or time to actively trade it is possible to still benefit from the potentially lucrative forex market. A forex managed account gives you access to be able to trade forex without the require to watch the markets around the clock. A professional money manager can trade your account and support add some more diversity to your investment portfolio, with out the added exposure of adding to investments that already may possibly have too much exposure to the equities markets.
When you choose to open a managed forex account you should be realistic about the quantity of “risk capital” you might have to invest. Bear in mind that the definition of risk capital is that capital that you’ll be able to afford to lose with out any main impact on your lifestyle. Plowing your whole life savings, your child’s college fund or borrowing money at high interest to invest into forex isn’t a recommended practice.
Some forex investment funds require funds be sent directly to their own bank accounts, whilst other Forex Managed Account providers enable you to invest directly with their broker. The second scenario where you invest directly with the broker gives you far additional control over your own funds and is preferable for that reason. The reason is so it is possible to deposit or withdraw your funds as well as revoke the right of the money manager to trade your account.
Trading Forex and making use of high leverage is constantly classified as high risk investing, having said that, it’s possible to manage this risk with correct money management and disciplined trading. Well placed stop losses and strict money management permit the trader to control risk with forex. Of course a strict and professional level of discipline is important if this risk management is to be effective. This is why it is wise to invest with a managed account program run by a team of professionals.