Managed Forex Trading

Reviewing the Best Managed Forex Accounts

Archive for the ‘Managed Forex Funds’ category

Increase the Return on Your Investment with Offshore Bonds

January 23rd, 2012

Today it is very hard to get the sort of returns which made the currency market so popular a few years ago. This editorial looks at how the foreign currency market has changed rapidly in recent years, and that gaining from investing in this market on an individual basis is extremely hard. For many investors, returns can be increased by the use of offshore bonds.

A colleague told me recently how easy it was to make money out of offshore bonds a few years ago. There were many tricks you could use to fool the brokers, and it was just not necessary to invest part of your portfolio in a managed forex account, as there was plenty of money to be had from the brokers themselves.

Just one way to make a guaranteed profitable trade was to take a straddle trade just before news releases – this would often result in a 100 pip or more profit. In those days, news announcements created big price movements, and it was an easy trade to make upwards of 100 pips with a big news event such as interest rates, unemployment figures etc.

Today, however, there is not so much volatility, and it is much harder to make such huge sums. In those times, it was easy to make substantial returns on your trading account day in, day out, so an offshore bond was not needed to increase returns.

Today, however, is very different, with millions of expat financial advice, without wanting to be sensible and go for a managed forex account. These events have occurred along with the extraordinary levels of leverage that the forex brokers are offering their clients to trade with.

The real money of course is setting up a forex brokerage, which explains why so many are springing up everywhere, although this does not go far to explaining why offshore portfolio bonds are becoming more popular amongst the expat community.

In conclusion, currency trading today is a very risky activity, and not so easy as the brokers want you to believe. Of course, it is very much in the interest of forex brokers to promote high leverage, and to offer free training courses, in an attempt to lure people into thinking it is easy to make money in the currency market. With good financial advice and research and good expat financial advice, expats can benefit from offshore bonds.

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Posted in Managed Forex Accounts, Managed Forex Funds, Offshore Bonds

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.