Managed forex accounts
| Managed forex accounts |
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| See also |
Managed Forex Accounts is a foreign exchange account that is managed by the manager instead of investor himself. The manager makes decisions on behalf of his client and is paid for it. Investing in currencies, if done correctly, can be an ideal market for the current global economic and financial environment. Currencies are attractive because you can potentially benefit from events in every corner of the globe. Experts invest clients'; funds in the Forex market in order to get a profit, then usually a part of this profit goes to them. Investors still have full control over their account, for example, they can deposit and withdraw funds, close their account or change manager.
As the prices on Forex market can change quickly, investors that want to respond to opportunities should spend a lot of time monitoring the market.Often due to their poor knowledge of the currency market, insufficient mental resilience and lack of time, traders lose out on Forex so account managers may be the right solution.
Professional manager can do it for many investors simultaneously. The key issue is fee system. Managers can be paid for success for work, or both. Thus fees differ greatly. Sometimes there are also hidden costs which should be checked before signing contract. The fees can take even 30% of earnings.Manager who has many clients can buy larger volumes and therefore obtain better prices.
Advantages of managed accounts
There are many benefits of having a managed account, we can distinguish:
- Profit - thanks to such accounts investors can earn much more than on classic offers on the savings market, without the need for personal financial management.
- Time - proper investment requires time spent on training and constant analysis of the market situation, unfortunately few of us can afford it.
- Capital in the hands of professionals:
- Who make complex analyses every day to predict the prevailing stock market trends for your profit. In addition, they often have access to exclusive analyses and studies that help them make better decisions,
- The money at their disposal is not entirely theirs, which makes them more objective,
- They have many strategies from which investors can choose the right one for themselves (e. g. sometimes it can be adapted to investment objectives)[1].
Managed account is an excellent option for beginners who want to start trading on the foreign exchange market without fear that the mistake made will result in significant losses. The manager always talks about the strategy he has adopted, discusses and consults on it.
PAMM accounts
Percent Allocation Management Module is a technical solution that allows the client to delegate the management of his account to the trader on the basis of a limited power of attorney to trade. Transactions are allocated by means of percentages. makes it possible for one manager to make identical transactions on several accounts at the same time without the need to log on, enter passwords, restart the platform, select the appropriate transaction volume and paste orders. In other words, this technology makes it possible to combine several accounts into a single account.
PAMM accounts are a variety of managed accounts or a kind of equivalent of investment funds. Thanks to managed accounts and economies of scale, they can significantly increase their revenues without excessive effort. By showing the history of their performance, they can encourage a second group of investors who decide to cooperate [2].
References
- Yao, J., & Tan, C. L. (2000). A case study on using neural networks to perform technical forecasting of forex. Neurocomputing, 34(1-4), 79-98,
- Gelet J. J.,(2016). Splitting Pennies - Understanding Forex.Elite E Services. (7.7),
- Archer M. D., (2012). Getting Started in Currency Trading: Winning in Today's Market.John Willer & Sons.
- Ponsi E., (2010). The Ed Ponsi Forex Playbook: Strategies and Trade Set-Ups.John Wiley & Sons (75-76).
Footnotes
Author: Natalia Windys
