Benefits of a Managed Foreign exchange Account

Many people are drawn to the foreign exchange market due to high liquidity, 24 hour trading, low startup costs, and a number of other attractive reasons. However, some traders can't sufficiently learn or trade currency due to lack of time and other reasons. Also, many investors like to supplement their existing portfolio without needing to learn a completely new market. This is where the managed forex account comes in. A managed forex account is an established live forex account funded by the investor, and traded by a managed forex company or professional trader. This allows the investor a reasonable rate of return on an account he/she does not necessarily have to trade himself/herself, and the opportunity to be a part of the largest financial market in the world.

There are obviously many up sides to a managed forex account. The investor can achieve a steady rate of growth without needing to spend all the necessary time and effort to trade the money himself. The currency market is a very liquid market too, giving the investor a lot more flexible method of withdrawing funds from the managed forex account. Also, trading currency allows profit potential in both rising and falling markets, giving the experienced money manager more opportunities to grow the investor's account.

Two of the main types of managed forex accounts are those traded manually, and those traded by an automated forex trading software. Automated trading software automatically trades currency based on a hard coded set of rules. A coder will write the system and money management rules into a number of programming languages to make a software that could provide a more regulated steady rate of return for the managed forex account than the manual trader. This gives the ability of the company or professional to promote a set rate of monthly (or yearly) growth.

As a managed forex account seems like a very lucrative direction to take in the currency market, some people can still be drawn from it for a few select reasons. Usually, many commercial brokers and managed currency trading companies have a minimum for the account to be traded. These minimums usually are around $5,000 - $10,000, and prove a hefty starting cost to the average trader. Also, many of these companies can (and usually do) promise high returns. In spite of these statements, many companies charge a monthly management fee to your managed forex account. If your monthly income is less than the regular monthly charge, your managed forex account will be in the negative even though before the charge, you were positive.

Managed forex accounts can be an excellent way to grow a large account, or provide a steady rate of growth over a long period of time without the hassles and emotional swings of trading currency yourself. If the investor has both the capital and a reputable investment firm or professional, a forex managed account could prove to become a great investment opportunity.