Managed forex accounts are a boon for those who don’t have the time to devote to learning all the ins and outs of foreign exchange dealing. They’re also a great way for those who do have the skills and expertise to profit from currency trading to provide their services to other investors, and PAMM and MAM accounts solve a lot of the administrative difficulties of fund management.
Management of these forex accounts is a very serious and a competitive business. Many investors like to allocate a portion of their funds to forex accounts to be managed professionally, as it helps them to diversify their risks and also mitigate any losses that may arise from other portfolios such as stock and bond market.
Since forex is a completely different ball game from that of the stock markets, their profits and losses are also separate. Therefore these currency-trading accounts can enhance one’s portfolios in a beneficial way, providing greater diversification. Forex accounts that are managed professionally must be able to provide the following, irrespective of which forex trading manager or account that you choose – a currency trading account not tied to the stock market operations.
The forex managed account should be able to provide a better return than the treasury bonds and other such money market instruments
Professional expertise is a must. The firm should have good standing in the market and have professionals who have experience in dealing in foreign exchange accounts. Most foreign banks and transnational firms employ the best and have constantly out performed others. It’s not necessary that your forex account manager should be a Harvard Grad but in most cases it, they are better trained.
The firms that handle managed forex accounts must be able to leverage to give maximum profits. The account manager must be able to book profits in both the falling and rising currency markets, and should provide for monthly / weekly reporting of the forex transactions as well as real time reporting if need be.
Managed accounts should be such that they are liquid in nature. They should give ease of withdrawal (of money) to the investors at particular time intervals and in cases of emergency too.
Depending on the firms that one chooses, there are various kinds of currency trading accounts that one can invest under. They may be called by several names such as Global forex accounts, aggressive forex accounts, and high value forex accounts etc.
For example the Global forex accounts might deal in many foreign currencies, many of which may not be the liquid currencies such as the Soviet Rouble or The Indian Rupee. Other accounts such as the aggressive forex accounts may deal in the most liquid of the accounts such as the US Dollar, Japanese Yen, Euro, British Pound, Swiss Franc, Canadian Dollar and Australian Dollar.
The forex trading accounts also differ on another account, that of the initial investment that is required. Some forex trading accounts may need an initial investment of US$ 10,000, others US$ 50,000, still others might require an initial investment of US $100,000.
Account managers make use of various statistical analysis tools to give the optimum performance and maximum results and profit, and are worth considering if you don’t want to be actively involved in the trade decision process.