If you are thinking of forex trading and opening a managed forex account, then this is the guide for you.
Here we will answer the common question, is forex managed account the best for beginners?
We will provide details of the basics, along with what to expect from some of the best managed forex accounts. We will also highlight the differences between managed account types so whether it is pamm account forex brokers or another type of account that will suit you, we can help.
Let’s take a closer look.
Table of contents
Is Forex Managed Account the best for beginners?
A managed forex account can be ideal for new traders depending on your situation. As a beginner, if you have no experience in trading, then it is a good chance for you to hand off the trading to a fund manager who likely has a lot of skill and experience.
On the other hand, if you actually want to learn forex trading for yourself, then it may be a good idea to try out a free demo account as provided by one of the many top forex brokers. This will allow you to learn completely risk-free instead of passing off the trading to a fund manager.
Benefits of a forex managed account for beginners
There are several benefits of a forex managed account as a beginner. As mentioned, this allows you access to the knowledge and skills of an experienced trader without having to take your time to study, learn, and ultimately trade in the market.
While this is not completely guaranteed to be a success, it is a core benefit of having a managed forex account.
There are also many more elements to this type of account that you can read about in our guide, is forex account management legal?
What is a forex managed account?
A managed forex account at its core is a type of trading account in which a professional trader trades on your behalf. You still remain in control of your account and assets, but you authorize this trader through a Limited Power of Attorney (LPOA) which must be signed by both parties, to trade on your behalf.
This form also provides you with a safe, legal environment for trading through the likes of a PAMM or MAM account with a reputed broker and professional traders.
You can learn more about the process and fund managers by reading our how do forex managed accounts work? guide for all the details.
Alternative to managed account: copy and social trading
Of course, if you don’t want to, or for some reason can’t open a managed forex account, you do have other options. It may also be that you want to learn more about the process of trading yourself instead of simply handing it off to another person.
In any case, social and copy trading are excellent alternatives to consider. They are similar in that you can collect and follow trading information from others, and even have their trading decisions copied. You do, though, retain more control. Only you will have control of your trading account, and you will always be in a position to make the final decision.
Both of these forms of trading are hugely popular and easy to get started with while also allowing you to have more opportunities to learn about trading and the market for yourself.
What are the best social copy trading brokers?
The process of opening a social or copy trading account is very similar to that of a managed forex account, and just as easy. The first step is to choose the right broker for you that offers safe, well-regulated trading, and good fee conditions.
An example of a leader in this space is eToro who are hugely popular and trusted around the world in social and copy trading and also offer their own easy-to-use trading platform perfect for new traders.
Another way to do it is to choose a top broker like Pepperstone that has a partnership in place with some of the best third-party copy and social trading platforms. This can provide you with the best of both worlds.
Forex Managed Accounts for Beginners FAQs
Can someone else trade forex for you?
Yes, it is perfectly legal to have someone else trade forex for you. It is essential though to sign a Limited Power of Attorney (LPOA). This allows for the other party to trade on your behalf while you remain in control of your account.
How do forex managed accounts work?
You need to open an account with a broker offering such accounts and then find a fund manager. Managers may work with different investors at the same time and trade for them. You can get in-depth details with our guide on How do forex managed accounts work?
About the Author
Anthony is a financial journalist and business advisor with several years’ experience writing for some of the most well-known sites in the Forex world.
A trader turned industry writer, he is currently based in Shanghai with a finger on the pulse of Asia’s biggest markets.
He is a keen golfer with a very high handicap so when not helping you find the best broker for your needs, you may find him on the course or just as likely following any number of sports from the comfort of his sofa.