Do you buy and sell your own stocks on the stock market? Do you trade the securities that you keep in your IRA? Do you manage your own mutual funds?
If you answered yes to any one of these three questions, then you might be competent to manage your own Forex account. Otherwise, you should have a managed Forex account, so qualified Forex traders can do all the heavy lifting for you.
Forex Trading – Not For The Faint Of Heart
The sun never sets on the foreign exchange currency market. Five days a week, 24 hours a day, it seems like every little bit of world news makes Forex fortunes rise and fall. You are best off finding an experienced disciplined broker and having a managed Forex account than to try to manage their accounts on their own.
When you select a brokerage for your managed Forex account, look for a brokerage house whose sales staff has worked for the big names like Fuji Bank, Swiss Volksbank, Societe Generale, or Merrill Lynch.
Something else to look for when you select a Forex account manager is a company with a staff of brokers who frequently write articles about the Forex market or conduct seminars about the Forex market. These people will know a lot about the Forex market, and they have a reputation to uphold as a teacher and Forex trader.
Fresh, new traders have incredible energy that can translate into an aggressive trading strategy. The better approach, however, is to combine fresh new traders with experienced senior traders who may advise a more disciplined approach to trading. It is this blend of experience and enthusiasm that makes having a managed Forex account a good idea.
The idea of a managed Forex account is to reduce the risk to you. Trading decisions should be made by consensus, on a committee basis, to draw on the experience of everyone on the trading team.
Your clearing firm for your managed Forex account should be a member of the National Futurse Association, the Commodity Futures Trade Commission, and the FSA. A clearing firm should have plenty of excess cash on hand and should clear millions if not billions of dollars every month.
How Do Managed Accounts Work?
To open a managed Forex account, you fund your account and assign trading responsibility by signing a limited power of attorney. The trader makes all your trades for you and keeps 30 percent of any profit on trades made on your behalf; you keep 70 percent of all traded funds. This system provides outstanding motivation for your Forex trader to do the very best job possible for you.