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.
