Managed Forex Trading

Reviewing the Best Managed Forex Accounts

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So How Do I Go About Researching Forex Managed Funds?

August 23rd, 2010

The stock markets have taken a huge hit over the past few years. However, in contrast, forex managed funds have outperformed the market, beating all other asset classes in the process. Let’s take a look at them, and try to understand why the returns are so much better than a traditional stock or bond fund.The forex market has grown massively over the last few years. In the 90′s, only exclusive banks and private investors had access to the currency markets. But today, everyone is getting in on the act.

So what should an investor be looking at when he is deciding what managed forex fund to invest in? Looking at the returns might be an obvious place to start. But things aren’t that simple – one needs to consider the drawdown, ie how much the fund can potentially lose.

The investor should also speak with the manager of the forex managed fund and enquire as to how much leverage the manager is using. The wrong use of leverage can have serious consequences on a forex managed fund.

The negligent use of leverage is why the vast majority of retail investors lose their shirt in the forex market, and end up investing in a forex managed account.

But what if it all goes wrong? In practice, you are already quite a lot down on your account, as you need to pay the spread, ie the difference between the buying price and the selling price. You have to realise that as soon as you enter the trade, you are in a loss position, as you need to pay the spread. Then if the market is volatile, you can soon get in a very bad position, lose your shirt, and then start to get sensible and invest the rest of your savings in a forex managed fund.

Consequently the potential client much choose a currency fund which suits his appetite for risk. If the investor wants to get triple figure returns, he must accept a higher level of risk, with higher leverage. Alternatively, a client who places a higher level of importance to the preservation of his capital might want to look for a forex managed fund which takes lower levels of risk, and which uses lower leverage. In summary, therefore, the client must find a forex managed fund which fits his comfort levels vis a vis risk, and can maximise his investment goals.

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Posted in Forex Managed Trading, Managed Forex Funds

Managed Forex Funds – How You Can Profit From Foreign Currencies

August 19th, 2010

Managed forex accounts have been traded for several years. They have been around since the advent of foreign currency as an asset class in itself. The thought of forex managed funds is not anything new. They have existed in the areas of stocks, mutual funds, bonds and commodities for decades. All they are in effect is flexible investment funds, where a money manager looks after your investment, and at the same time you have complete flexibility over our funds.

Most traders I have met have lost money in forex, and some a great deal of money. It is really not surprising that so many people lose money when using such high levels of leverage.

So, I will explain the lures, and dangers of leverage for you. This might be an eye opener to even some seasoned forex traders – and I’m sure that for some of the novice currency traders reading this, it will be totally new material. The figures you can make with 500:1 leverage are crazy – you can easily turn $1000 into $50,000 in a very short space of time.

I wonder how many traders have thought like this when they started out, and how many fell flat on their face after just a few weeks. But the harsh reality of the matter is that 99% of traders lose out, and resort to opening a managed forex account in order to make money on the currency market. But in a similar vein, the leverage can also cause big problems for a currency trader.. The spreads will cause you a big drawdown, and with a volatile currency, as most are, and you can blow your account in a few short, but expensive, minutes!.

And so this is the honest cause why forex investments have become so popular – pure greed. To succees where others have failed. But after blowing an account or two, most will place their funds in a managed forex fund to ensure success.

At the end of the day, the only way to ensure you have a chance at profiting from the forex market is to leave it to a pro, and invest in a managed forex account. After all, you wouldnt wire your own house to save paying an electrician?

Of course, there are risks inherent in choosing a managed forex account, if you have little knowledge of the currency market – after all, how do you go about selecting a manager in the first place. Well, of course, appropriate due diligence needs to be carried out, especially with regard to the performance of the managed forex fund.

To summarise, whilst trading forex is doable, it is clearly better off to open a managed forex account. Better to invest your money with experts, in a managed forex account.

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Posted in Forex Managed Trading, Managed Forex Accounts

Tags: managed forex managed forex accounts

How a Good Forex Money Manager Can Save You Money

August 16th, 2010

More and more people are turning to the currency market to get better returns on their investment. Consequently, more managed account services have sprung up, offering their services to retail clients. As we will see, having your investment looked after by a forex money manager offers a variety of possibilities and advantages for the retail investor. This editorial looks at why this has been the situation, and looks at why managed forex accounts are the ‘next big thing’.

So why hire a forex money manager to look after your funds? Perhaps the obvious reason is that they are professionals, and will make more money than you could. Is this the case for the majority of money managers?

In the majority of situations, this is true. For the average retail trader, forex trading is an extremely difficult skill to master, and the vast majority of traders fail within 3 months. After this period, they either go back to investing in stocks and other asset classes, or look to find a professional to manage their money in the forex market. Finding a respectable and high performing forex manager can sometimes be tricky, but it well worth the search.

So how can a managed forex account help you in practice? Well, a big benefit is that you don’t need to be a millionaire to access a managed forex account. Whilst most hedge funds often require commitments of over a million dollars, you can set up a managed forex account with just a few thousand dollars.

What a lot of investors like about managed forex accounts is the element of control they have over their investment. The key to this, is that you open an account with the relevant currency brokerage, and at no point do you need to send money across to the fund manager. This means that the manager will have no access to your money.

The forex money manager trades your funds via a power of attorney that you have granted him, but at no time does he have any other rights, such as to withdraw funds from your account.

These different levels of security are a key reason why managed forex accounts have become so popular in recent years. In recent times, there have been countless cases of investment funds defrauding their clients of their investment. Perhaps the biggest case reported in the press was that of Bernie Madoff.

Thus to conclude, it can be seen that getting a forex money manager to manage your forex account has a distinct number of advantages over a traditional form of investment. In this uncertain world, where the housing market is in free fall, and stock markets are collapsing, the ability of a retail investor to access the forex market through a well managed forex account is of great benefit.