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Is a Forex Managed Account For You? - Forex news - Binary options

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Is a Forex Managed Account For You?

Is a Forex Managed Account For You?
If you do not think that you have sufficient knowledge or experience to trade Forex or you simply cannot commit enough time to this activity, then you could consider using a professional trader to manage an account for you.
However, this can be a risky exercise if you do not undertake a thorough due diligence on each potential candidate. You should research the following points at least:
You must focus your attention on verifying the consistency of the Forex trading performance of all your potential candidates. In particular, you are seeking funds that can produce regular profits on a monthly basis. You must avoid those that possess irregular trading histories with erratic results. Experts would advise you to inspect the track records of each candidate going as far back as two years. Seek professional assistance with this task, if required because it is very important.
You must obtain a detailed understanding about how much a Forex managed fund will cost you. Will you be charged a fee or commission for instance? For example, will they deduct a fee based on monthly profits or an annual charge related to trade turnover?
Very importantly, you must make sure that you will obtain a good profit from this operation. You do not want to discover that your broker is just trading your money in order to produce revenue for itself only. Ideally, you should search for those funds that pay their managers based on their levels of success only.
You cannot make a substantial investment with a company unless you can confirm that it is a legitimate and professional organization with an accredited track record. You must at least contact them personally in some form or other. In addition, you should obtain third party verification and recommendations concerning the quality of their services.
You will need to enquire about the minimum deposit that the funds of interest are prepared to take. Some demand as much as one million dollars as their entrance fee. In such cases, you must undertake a deep scrutiny of their affairs because you only need to review recent news items to understand what can go wrong.
You should also investigate the size of the fund that the manager is operating and using to trade Forex. You need to verify that this amount is healthy and growing in size because this will be a good indication that the fund is successful. If you can communicate with other investors of the fund, then this will also be a good method of securing recommendations or otherwise.
You should determine the type of trading strategy that the manager operates and does it coincide with your own profit and risk profiles. You may become increasingly nervous if you discover that there are periods of large draw-downs for example. Seek other options if you become uncomfortable about any aspects.
Thorough due diligence is your key to success. Do not rush in and make snap decisions because Managed Forex accounts can exhibit complexities.
Terry Allen is a career Forex trader who has written hundreds of articles for DailyForex and other industry websites. He is the co-author of an Amazon e-book titled Kick-Start Your Forex Career, which outlines the information that everyone needs to know before starting to trade Forex. Terry has been featured on Benzinga and Seeking Alpha.
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Please make sure your comments are appropriate and that they do not promote services or products, political parties, campaign material or ballot propositions. Comments that contain abusive, vulgar, offensive, threatening or harassing language, or personal attacks of any kind will be deleted. Comments including inappropriate will also be removed.