So, you have decided to look for a managed forex account?
Whatever the reason, the very first place you will want to look is our list of the best managed forex accounts available. Whether it is pamm account forex brokers you are looking for or another type of managed account, we can help.
With that in mind, you may be wondering, is forex account management legal? That is exactly what we will answer here through our guide that will also outline the key steps in getting started.
Here is a closer look.
Table of contents
Is forex account management legal?
The simple answer here is yes, forex account management is legal and legitimate. There are some countries with strict regulation on these kinds of activities, and some brokers who do not offer managed forex accounts, but still, the actions are legal.
How to choose a broker for managed account
Here is a closer look at exactly how to choose the best broker you can if you are interested in a managed account type.
Look for a regulated and safe broker
Above all, you will want to make sure you choose a regulated broker who can be trusted to provide a safe trading environment. There are many to choose from that have excellent top-tier regulation from CySEC, the FCA, ASIC, and others.
You can check our selection of the best managed forex account choice to help you along.
Find your fund manager
Once you have selected and registered with a top broker providing managed accounts, it will be time to choose a fund manager.
There are many elements to check when choosing your fund manager. These include their experience level, past performance, and risk appetite as well as their reputation with other traders. If all of these things are to your satisfaction, then you can sign up with one of the fund managers.
Perhaps you are interested in becoming a fund manager yourself. If that is the case, you should read our guide on how to become a forex account manager for more information.
Check the minimum deposit requirement
Among the first things you should check when signing up with a broker, is their minimum deposit. Each broker will have its own minimum requirement which in general matches that amount required to open a managed account. You should check this is within your range.
With that said, some fund managers may require higher minimum deposits which is also something to check and consider.
Diversify your investment
Diversifying is key in all forms of investment, including forex trading. In this respect when it comes to managed accounts, you can also diversify by trading through multiple fund managers.
This is a good step if you have a significant amount to trade and want to balance your risk by choosing different fund managers who perhaps also have varying risk attitudes.
What is forex account management?
A Managed account allows a single professional trader to manage the funds of several investors and trade on their behalf. In this process, an investor will invest with a fund manager to trade for them. The fund manager operates through a particular broker. For more information, you can read our guide on how do forex managed accounts work?
Is a forex managed account right for you?
This will be completely your decision, though using a managed account means you can rely on the skill and strategy of professional and experienced traders. This can be a great choice if you are new to trading or don’t have the time to dedicate to trading as all of this can be the responsibility of a fund manager trading on your behalf.
Issues you might have by investing in a fund manager
Of course, it may not be all plain sailing with a fund manager. Regardless of their past record, there is always the possibility of a loss.
Another point you may miss out on is the ability to experience and trade the market yourself as you hand over control to a manager. This may not be suitable if you are a very independent trader.
Overall though, these are challenges that can typically be overcome in the long run as you see the results of trading through a good fund manager.
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