Making money by Forex trading is a complicated business and it requires a lot of knowledge to even begin with. If you simply lack the skill set and knowledge of an experienced Forex trader, you simply won’t grow your money. The ability to make money anywhere in the world as long as there is an internet connection and with a few clicks takes a lot of time to master. Of course, there is luck in play but if luck was the main priority, there wouldn’t be thousands of Forex traders.
Surely you would want to double the amount you have in investments. Forex trading is a great way to double or even triple what you have. Just like how companies announce bad news, so do countries and it affects the value of their currency. However, finding a quote currency that isn’t strong against your base currency but will rise up without a doubt is a hard trick.
For this reason, many top-level Forex traders have advisers and even a team of people to point out potentials. Not being comfortable with Forex trading or not wanting to sit and analyze the market is a common behavior. To overcome this, you can always find a Forex account manager.
What is Forex Account Management?
To put it simply, you will hand over your money to a professional Forex trader also referred to as a money manager and will handle all the trading on your behalf. For this, you need to open a Managed Forex Account which are segregated accounts that are individually owned by each investor at a brokerage firm.
As with any other investor, you want to get the best out of Forex Account Management. Here is how you choose a reliable brokerage firm.
The managed forex accounts are 100 percent secure and you can count on the fact that your money will not get stolen or lost. Before you open a managed forex account, there are a couple of documents that you must complete with the trader. From this on, we’ll refer to it as the money manager and you as the investor.
The investor and the money manager has to sign the Limited Power of Attorney agreement. This agreement gives the money manager the right to trade the investor’s (you) money. It doesn’t end there though. There cannot be a transfer of funds between the investor and the money manager, further increasing the security and the transparency for the investor.
Forex Money Manager Costs
Without bringing the money manager into the deal, yet, Forex trading is quite costly. If you’re just beginning with Forex trading, there is the ask price in which the price that you buy the quote currency and the bid price which the price you exchange the quote currency to the base currency. Whether you see this as a cost or not, there is that.
Now that’s cleared out, we can begin with the actual cost of having a Forex account manager. The fees that you will pay for the managed account is always going to be a mixture of different fees. The most important two fees are the management fee and the performance fee.
The management fee is usually between 2 to 3 percent while the performance fee can be between 15 to 30 percent. Given that you simply won’t even move a muscle while the money manager handles your money, the fees shouldn’t make you shy away from opening up a managed Forex account.
Just getting started with Forex trading and want to learn more? Read our brokerage firms to get a basic understanding of Forex trading from the link above.