Forex Managed Account 

It is an account where you allow a professional trader or manager to trade your funds on your behalf in return for a salary/fee or a share of the profits.

What is a Forex Managed Account ? 

It is an account where you allow a professional trader or manager to trade your funds on your behalf in return for a salary/fee or a share of the profits.

Why use Forex Managed Account?

Using a Forex Managed Account does give some advantages.   This is specially so for people who are new to forex trading and do not have the expertise and experience that these professional managers would have.

As we know, expertise and experience can only be obtained through time and direct involvement in actual trading. These are assets that are essential for successful currency trading as they can help to reduce or even negate the large risks that come with forex trades. So for a new comer who has little knowledge, using a fund manager may be a good option.

New traders also may face emotional difficulties in the trading as forex markets can be volatile at times.   For those who are prone to emotional stress, using a forex managed account has an added advantage as forex managers are used to coping with market changes.

For those who do not have sufficient time to trade themselves, having a forex managed account will solve this problem. You can take part and enjoy the fruits of forex trading even if you have no time to seriously learn to trade. Furthermore, a full-time manager is able to devote all his time to trading so you do not have to worry about times when you may be busy working on something else and missing a buy or sell trade.

What are the disadvantages of a forex managed account?

These above reasons make forex managed accounts very popular.   However, these accounts do not come without disadvantages.

Firstly, of course there is a fee to pay or a profit to be shared.   This varies with different accounts.     

Secondly, by letting someone else to trade on your behalf, we also lose the opportunity of learning in the markets by practicing the trading ourselves. In a way, we will be putting everything in the hands of the manager and thus depriving ourselves of any independence.

By handing over all the responsibilities of the trading, including the emotional aspects as well to the manager, we would forever have to depend on the will and skill of the manager. We cannot progress and gain any experience associated with the trading ourselves   

The most important disadvantage of using forex managed accounts is that we often look at past records of fund managers as a useful guide on their skills and prowess but it can prove to be wrong. Firstly, the information we receive may be wrong and it may also be that past performance is not a guide to future results.  

For me, I feel that remaining in control of your own trading account is better.   You can gain experience and if you only trade small amounts initially, your risks are minimal. When you have more confidence, then you can proceed to bigger trades.   Having a forex managed account is basically handling your money to a stranger.