Choosing the best Forex Managed Account is the most important part of having this type of investment. The fact is that opening an account means that the investor will be allowing someone else to handle their funds. Hence, the investor must be sure that the broker is not only trustworthy but is also capable of profiting from the Foreign Exchange Market. That being said, following are some tips on how to choose a broker for Managed Accounts. – Check out all the different FXCC forex account types.
Pooled or Standard Forex Managed Account
There are actually two types of managed accounts – pooled and standard. The standard type typically necessitates thousands of initial investment because this is a one on one transaction. The investor will be dealing with one broker who will be handling their funds. The pooled type however requires a smaller amount. In this situation, the money will be combined with other investors to achieve the necessary capital to start trading.
Reputation of the Provider
Take note of how long the provider has been in business. Granted that there are young quality-brokers out there, but the older ones are much more stable. More importantly, find out what other people have to say about the broker. Are they happy with the services or do they have problems with the outcome? Browse through different feedbacks and this should provide a fairly clear view of the situation.
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Profit Sharing System
Be aware of how profits are shared within the Forex Managed Account. Ideally, go for a service provider that only starts the sharing once the initial investment reaches 100% gain. For example, if the initial investment is $6,000, then it must reach $12,000 first before the profit can be shared between the interested parties. This way, the investor will enjoy a guarantee on their investment while the broker has a chance to earn more through commission.
Consider the LPOA
NEVER enter a Forex Managed Account without any LPOA. Short for Limited Power of Attorney, the LPOA document is the investor’s way of making sure that the broker will not purposely mishandle their funds. Basically, this means that the manager can only use the cash for trading – anything else will be a violation of the agreement. Make sure to study the content of the LPOA and have it checked by a lawyer if necessary before signing.
Are you are the aggressive type of investor or a conservative one? Look for a broker that fits the kind of investor you are. An interview with the broker or the company behind the service will also be a good idea. Asking for a copy of their history (trading-wise) should also shed some light on whether you stand to gain or lose through their system.
Of course, those are not the only things to consider when choosing a broker for Managed Accounts. Different service providers might give out different perks depending on how badly they want clients. Note that the best Forex Managed Account is one that provides the investor with the best profit with minimum amount of risks. Compare and evaluate each one before finally reaching a decision.
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