Listed here are 5 essential points to consider if you are in the market for a Managed Forex Account. Whilst this is not a substitute for your own due diligence it will help you to identify some of the key ingredients necessary for an enjoyable and profitable managed forex experience.
1) Complete Management of Your Funds
The absolute most important thing to consider when evaluating managed account options is ensure you always have control over your funds at all times. If you are working with a reputable Forex Broker, and this should always be the case, you shouldn’t have too much to worry about in this respect. Further down we cover more on this aspect. If you avoid any type of pooled fund arrangement and use a LPOA or “Limited Power of Attorney” you should then be able to revoke the right of the trader to trade the account should the unthinkable eventuate. Best to be safe than sorry.
2) Historical Performance
When it is all said and done all you really have to go off in terms of deciding on a Managed Forex provider is their history. Their history has to be verifiable, that is audited or displayed as original statements with known authenticity. Don’t settle for a table on a web page or a bunch of Excel spreadsheets, these simply cannot be verified as authentic. If the provider cannot present you with verifiable documentation to validate their performance claims you have to assume that their figures are bogus.
3) Good Money Management
The core component of any sound trading strategy is Money Management. Even though it is generally overlooked by amateur traders, professional traders know that even a very average trading strategy can be made profitable if the right money management system is applied to it. Money Management does require a lot of skill and focus, unfortunately attributes that are often lacking with amateur traders. The sad fact is that most amateur traders fail to recognize the value of proper Money Management, and this alone often results in their eventual downfall.
4) Reputable Forex Broker
Not all brokers are equal. From experience, a broker could make your forex trading experience pleasant or nightmarish. Select your broker wisely. Be sure that they offer such things as competitive spreads and commissions as well as fast and efficient deposits and withdrawals as well as giving you 24/7 access to your account statistics. Small delays in processing withdrawals can cost you thousands in lost opportunities as well as time that you simply can’t get back. Search the web for brokers that provide these types of features. If the Managed Forex provider recommends a certain broker do you own due diligence on the broker and make sure that you are satisfied that they can deliver the type of service you are looking for.
5) Minimal Draw Down
Personally I set the figure at somewhere between 25-30% , others prefer a more conservative 15% whilst others can deal with 50%. For me 50% is just too much and difficult to recover from. You basically need to then double your account just to recover your original amount. A hard feat to attain. Whatever amount you decide on stick to it and don’t attempt to trade out of an impossible situation. That’s simply gambling not trading.
