Forex trading is not rocket science, but it is still quite complicated. This is why managed forex accounts have been introduced. The dilemma that investors face now is of choosing the best managed Forex account out of the many available.
When it comes to managed accounts there can be no doubt about the fact that the best managed account is one where an investor hires a professional to do the job. Such an account helps pave the way into the market for investors that do not have the time to monitor the trading themselves or find it too complicated. New comers to the trade will find no better alternative to managed forex accounts as it offers them a ‘learn while you earn’ experience.
Understanding the workings of managed Forex accounts
The basic aim of hiring a money manager is to have a professional looking over the market for the investor. In Forex, traded spreads are calculated in a special unit known as ‘pips.’ Spreads basically refer to the amount in which a particular currency is bought and sold at a given time.
An important thing to understand is that the exchange of currencies does not take place in the central exchange. This means that the rate of exchange is likely to vary depending upon the expertise of the money manager.
Generally, forex account managers will be able to offer you variable spreads. Then there are managers that will be able to give you two spreads, which are relative to the trading shift in the day. Managers have the skill to speculate spreads by analyzing the market position. The basic thing to understand is that the spreads are relative to the market position; they rise when the market rises and fall when the market slumps.
Judging the worth of a managed forex account
When evaluating a managed account one of the key things to look for is fixed spreads. This is because it is much safer to have a fixed investment that stretches over a long period of time.
Another important thing to consider when gauging the value of the account is the leverage that exists between the investor’s capital and the total capital that is going to be traded. Managers that offer flexible margins tend to work in favor of the investors as the deviation in prices of currencies is a matter of cents.
Ideally, the best managed forex account will be able to yield you profits not only when the market conditions are favorable, but also when market trends are gloomy.
The fluctuation that occurs in the exchange prices between two currencies is the basis on which Forex trading is done. There are umpteen factors that contribute to this fluctuation. Economic calendars can be used in order to predict these fluctuations. The professional handling your managed account should have the experience that enables him to speculate future market trends and make recommendations based on his observation.
It is also important to take the risk factor into consideration when evaluating the strength of a particular program. A good program will offer a disciplined risk control procedure which limits the risk while achieving smooth and steady growth. In this way managed accounts will eliminate the possibility of sudden losses.