Managed forex accounts

Forex Managed Accounts - financial safeguards to ensure that clearing members (usually companies or corporations) perform on their customers' open futures and options contracts. Clearing margins are distinct from customer margins that individual buyers and sellers of futures and options contracts are required to deposit with brokers. Within the futures industry, financial guarantees required of both buyers and sellers of futures contracts and sellers of options contracts to ensure fulfilling of contract obligations. FCMs are responsible for overseeing customer margin accounts. Margins are determined on the basis of market risk and contract value. Also referred to as performance-bond margin. Self-trading in the currency markets can be a difficult proposition. To be successful, a currency trader must follow market movements 24 hours a day, six days a week. Many Forex investors do not have the time, experience or desire to self trade, but seek the diversification and profit potential that foreign exchange trading offers. Forex Managed Accounts were created for investors with risk capital who chose to have a professional trade on their behalf. In a Forex Managed Account, the positions are held in the investors account, independent of other investors. Unlike mutual funds or hedge funds, which commingle your funds with other investors, a Forex Managed Account is an account held exclusively in your name and all or part of your funds can be redeemed within one day. There is no lock up period and no withdrawal fees. The field of forex trading requires much expertise and knowledge without which the trader may incur great losses. The forex trading field is very vast where the trader is required to have knowledge regarding the factors concerned with bringing about the fluctuations in the currency prices. These factors may be analyzed fundamentally or technically but without the proper analysis of these factors it does not possible to derive profits from forex trading. To gain knowledge in the field of forex trading requires time and turns out to be quite expensive. So the trader who wants to avoid all this goes in for something called managed forex with which the trader is not needed to have any knowledge regarding this field. All the work is done by professional people have been into this field for a long time and are experienced analyze the forex market for the forex traders and then invest the traders money into the forex market to provide him with financial profits. There are two types of managed forex accounts: first which uses robots and the second which makes use of the professional experienced people in the field of forex trading. Both of these include the complete study and analysis of the forex market and the factors related with the currency fluctuations. The emotional factor is excluded and robots and they work according to the analysis of the live data using all the indicators and the results derived from this are used for taking decisions regarding forex trading. The other type of managed forex account involves a forex dealer who trades for the forex trader after analyzing the market data using different indicators and then takes trading decisions for the traders. The trading account remains in the name of the forex trader but the trading is done by the forex dealer after analyzing the market. The forex trader is free to utilize the money in his forex trading account according to his own wish. The managed forex in addition to providing profit to the novice forex trader also gives him the benefit of learning the forex trading. It also provides benefit to the experienced traders as they get opportunity of fine tuning their forex trading skills and get a deeper understanding of the movement of the forex market. The choice of managed forex is very difficult to make due to existence of several managed forex systems in the market for. There are managed forex systems which try to make several smaller trades which may prove dangerous for the forex traders as this may lead to loss of money. The forex traders should make sure that the managed forex has been back tested using real time forex data to avoid losses. With a managed currency account an investor who cannot watch the market 24 hours a day can still participate in the dynamic world of currency trading. An investor who wishes to have his funds professionally managed might also be a good candidate for managed currency accounts. Studies of professionally managed currency funds have shown returns that are not related to the performance of the stock market. Thus, a great way to enhance an existing portfolio regardless of what the stock market does, is to allocate a portion of the funds to an FX managed account. Advantages of forex managed accounts Acquiring managed Forex makes a good deal sense given the vagaries of international trading schemas. The increasing pace of political change has crafted a strange new environment. Even Forex trading mavens are concerned about the direction of events. Protect yourself against unseen market forces by employing consultants to assist you. You will quickly discover that this relationship will pay off - big-time! And the good news is that the education you'll receive during the process will last a lifetime. A managed Forex account relieves you from much of the stress associated with Forex trading. The solicitation of outside services enables you to go about your day without worrying about every single vagary of the market. However, just because you have a managed Forex account doesn't mean you can completely ignore the international arena. Constantly be on the lookout for viable tips on your particular market niche. Slacking on your commitment to your investments will inevitably cause a decline in your ultimate return. Such a lax attitude can also interfere with your relationship with your investment manager. Actually, the best way to get an account managed by someone else is to always communicate with the person who will be managing your account. This method is advisable due to the fact where a lot of trust needs to be put onto the person managing your account as normally, FOREX trading involves a very big risk and a huge sum of circulating funds. By communicating frequently with the person managing your account, you can gain a better understanding about him and therefore in return, builds up a better trust between the two parties. Lastly, regardless of who is managing the account, one must always acknowledge the fact where FOREX trading is not child's play and all the risk involved in FOREX trading must always be well assessed.