Managed Forex Accounts - Tap Into the Forex Market Using Professional Traders

GUERNSEY, U.K. - May 31, 2016 - PRLog -- Managed forex accounts are foreign currency exchange trading accounts that are administered by a management company and traded by professional traders on behalf of the investor. Sometimes the administration is undertaken by the traders themselves.

They allow investors to put their investment capital into the vast foreign currency exchange marketplace without having to spend years studying and understanding how to trade the market, then continually analysing, observing and waiting for opportunities to place trades.

Investors are attracted by the forex market because is it so massive and returns can be considerable. Every trading day over five trillion (5,000,000,000,000) US dollars is traded which dwarfs what is traded on the New York Stock Exchange daily by tens of times.

Firms that administer the forex accounts for investors charge fees for their services and these occur in three various forms. There are yearly administration fees that add up to several percent annually, performance fees which are a percentage of profits, from 25% to 50% typically, and transactional fees which are based on the amounts of pips traded, for instance fifty USD per million dollars traded. It has to be said that not all fees are charged, generally. Performance fees will always be charged and sometimes one or both of the other fees are also charged.

John Loader who has put capital into four managed forex accounts said "With all four of the accounts that I have invested in, I have only been charged performance fees and these have ranged from 25% percent up to 50%. I purposely opted for accounts that charged performance fees only so I have never been charged any other fees."

Performance fees are only deducted when the investor's account balance exceeds the "high water mark". This "mark" is the greatest amount that the account has attained after the performance fees have been removed. Inevitably investors' accounts will suffer a drawdown. This is when there is a losing trade or trades and the account loses money. Only when the account surpasses the high water mark will any performance fees be deducted by the management company.

Returns on these accounts differ widely because there are many variables since the traders use varying trading strategies. This means that the investor will need to understand their risk profile, how opposed to risk they are, before investing into an account. There are accounts that have significant drawdowns on a regular basis and investors may not be able to handle these big drawdowns.
Comprehensive due diligence must be undertaken whenever opening an account is being contemplated by investors to significantly decrease the prospect of selecting an account set up by scammers or traded by incapable traders.

http://www.acorn2oak-fx.com/managedforexaccounts.html is an independent website that reviews managed forex accounts, some of which they invest in. The aim is to help prospective investors gain a greater understanding of how the accounts work and the things to look out for.