Forex Managed Account Understanding the Mechanics of How One Works

A Forex managed account is very similar to a regular FX trading

account with the only difference that FX managed accounts are

traded and handled by a team of professional traders.

This means that you as the trader/ investor keep the control of

the account while you still can let the professionals trade for

you. There are many things that people don’t understand about

a forex managed account and in this article we will try to explain

the basics of how they function.

Technology and smart investments are now used together: With the advances in technology more and

more resources have been given to the investors and traders in the Forex market.

The financial markets have been changed by the way people have started to invest online. In the past, if

you wanted to invest in stocks, currencies, options, or in other instruments you needed to get in touch

with a stock trader, a fund manager, or your local brokerage firm.

Now, with the creation of online investing solutions more and more people are learning that they can

still take advantage of the moves in the financial markets and all from the comfort of their own home.

An Overview of the multi account manager software used in a Forex managed Account: When you

invest in currency funds the money manager who will be trading FX managed accounts will most likely

use what is known as a MAM account (or a Multi Account Manager account) .

The MAM account is the software responsible for applying all of the trading done by the fund manager

to all of the client accounts while it respects the money management rules that the fund manager uses.

For instance, if you have an account of $10,000 with a manager who has $1,000,000 under

management, and he takes a 2% trade, then the MAM account will make sure that the trade is open for

2% of your capital or 2% of $10,000, or $200.

As you can see this allows the investors to have an account of the size they wish without having to worry

about their account being too small or too big for a fund manager’s strategy.

Your monitoring software to keep tabs on your managed FX account or FX managed accounts: As a

Forex managed account investor you will also receive a monitoring platform that will allow you to track

your account. This platform is in many cases the same exact platform used for the money managers

themselves to trade for their investors.

The difference is that your account is a view only account that will only allow you to see the trades that

are taken in your account, monitor the balance, and gains and losses.

Performance fees and how they are calculated in a managed account: Most money managers who

offer the option to open a managed Forex account normally charge performance and/or management

fees. In this occasion we will focus on the performance fee. The performance fee is only charged in new

profits that are created in the account. The performance fee is automatically deducted from the profits

created by the money manager. This allows you to only pay based on performance, and not pay

anything if new profits are not generated in your account.

We hope this article helped you to understand how a Fx managed accounts work and how you can start

to take advantage of combining high technologic investment solutions with simple yet powerful trading

strategies and managers.

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