Of the many kinds of investing options, managed forex accounts is one of the most popular way for individuals to diversify their investment portfolio. Managed forex accounts is usually preferred because firstly it offers a great way to spread the risks and can work alongside the more conventional investments such as mutual funds, stocks and bonds trading.
Managed forex accounts make up for a great way as the risk to reward ratio is much different than the traditional investment options available.
So what are managed accounts in forex?
Simply put, a managed forex account is where you invest your money into a pool or a fund and let the money manager trade on your behalf. This is a great option considering the fact that if you do not have the time or lack the expertise, a managed forex account can greatly help to make your money work for you.
Within the managed forex account, there are different ways to get started. You could either look for an established managed accounts company that solely specializes in managing forex funds and trading on your behalf, or you could simply look for a forex broker that offers managed accounts directly.
While the option to choose from any of the two is left to the reader themselves, it is quite obvious that when opening a forex managed account directly with the forex broker, it allows you a great deal of transparency. In effect, you will know exactly the trading terms, the commissions charged besides the fee you pay to the fund manager.
Also, when opening a managed forex account, you are usually given an investor password. This enables you to check into your account anytime you want in order to see how your fund manager is trading.
The benefits of a forex managed account is that you do not have to trade yourself but allow someone with experience and one whose profession is to trade to let them do the work for you.
When opting for a forex managed account directly with a broker, you simply have to sign a Limited Power of attorney or LPOA which is a legal document whereby you authorize your fund manager to trade on your behalf and that's about it. You do not need to trade and you can occassionally check into your account to monitor the progress.
In terms of investment, the average minimum amount to invest starts at $500, which is a fair enough capital in order to see some substantial profits from your managed forex account investment.
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Want to invest in a managed forex account? We recommend HotForex which offers managed forex accounts with minimum investment of $500.
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