Managed Forex Trading

Managed forex trading is just like any other type of managed funds account. Just as you can have a stockbroker handle your stock trading for you, or mutual fund managers manage your mutual funds, you can have a forex broker manage your forex trading.

With managed forex trading, you put a certain amount of funds on deposit with a broker. Each broker has its own minimum, sometimes as low as U.S.$1,000 but often much higher. Because they will be trading for you, they charge you a management fee, often around 35% of the profits generated for you during any given month.

Control

Brokers should only be given authority to trade on your account, not to withdraw or deposit funds. Only you, the account owner, may deposit or withdraw money from your managed forex account.

You will have access to your managed forex account, but it will be read-only access. In other words, you can see what activity is taking place on your account, but you can't actually do anything with it yourself.

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Who offers managed forex trading?

Many companies and investment firms offer managed forex accounts to their clients, and you can find most of them online. Some offer forex managed accounts only as one of their services, while other specialize in managed forex trading services. You would be well advised to look for one of the specialists.

Types of managed forex trading

Managed forex accounts come in two types: manually traded and automated trading using a robot, or "bot". It's your choice and your preference.

Some traders like the idea that their managed forex accounts are in the hands of human professional traders, who presumably have the knowledge and experience to handle their money profitably and well.

The robots are simply pieces of software that are programmed by the account manager with a specific set of rules for trading. The programming includes the system being followed as well as money management rules.

You should know, though, that you can also run your own forex trading using a robot. Here's some information on using a forex trading robot, and here is our review of one of the best.

Finding a broker for your managed forex trading

There is a plethora of forex brokers online, and you should do your research carefully before choosing one. Some of these brokers' websites give lots of information about forex trading, but not much about their own services and the fees they charge. Make sure you know all the financial details before you enter into any agreements with a broker.

First, understand forex trading yourself

Many experienced forex traders go into managed forex trading simply to save themselves the time and effort of trading themselves, and that is a perfectly legitimate strategy.

However, others tend to jump right into managed forex trading just to get into the market before they really understand it. That is not a good way to go. If you are planning to be in the world of forex trading for the long haul, and expect to do well financially, you must keep up with your forex education. Understand the process first, learn to trade yourself, even if only with simulated accounts. Then, if you want to have someone else do the actual work for a fee, then by all means get yourself a managed forex account and go to it.

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