What are Managed Forex Accounts?

Sometimes some investors are excited to invest part of their capital in the Forex market. They note that there are opportunities in certain currency pairs, but they do not have the time and patience to pay due attention to a market as changing and as volatile as that of currencies. 

It is then that these investors resort to the help of an experienced trader to manage their investments in the currency market. For this, managed Forex accounts are created. Opinions are divided on this mechanism and some consider it the open door to investor fraud.

What are managed Forex accounts?

Managed Forex accounts are an option for all investors who want to put part of their capital in this market, but do not have the time and knowledge necessary to manage such investments.

These investors usually turn to a recognized trader or friend "who is dedicated to the currency business" and for a commission, an account is opened in a broker - generally in which the contracted trader operates - and, having previously signed an agreement of limits and restrictions the account managed in Forex is born.

How does a managed Forex account work?

When a trader is hired to manage an investor's Forex account, the Metatrader platform that has the multiterminal option is usually used , through which the trader can manage multiple accounts and when he opens a trade in one account, it usually replicates in the others.

Although the trader you want to hire is highly trusted by the investor, it is advisable, before opening the accounts managed in Forex, to request a history of their operations and the results obtained. In addition, when opening the account, it is important to sign a limited power through which the trader can buy and sell foreign currency, but will not have access to the investor's capital.

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Some agreements are made with the payment of a commission to the trader, who pays the broker, on the movements made. This is usually not recommended since the trader will get a commission for the movements and not for the results. That is why many agreements are signed with a commission clause for the trader, according to the results obtained.

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Managed Forex accounts can also be an excellent opportunity for traders to earn additional income to what they can achieve with their trade. In our Trading School you can train yourself with all the necessary tools to be a successful trader.