Over the last few years, more and more people are seeking out higher returns than the standard bank interest. As a result, more and more investors are seeking a managed forex account service to help them generate additional cashflow.
In this article, we are going to looking at the benefits of using a managed forex account service and how it can potentially help you achieve your financial goals with less stress.
When it comes to trading the global Forex markets, there are two main ways to trade..
- Self-directed trading; and
- Managed forex account services.
Both come with their challenges, but first, we’ll look at self-directed trading.
When you trade your account, you must have your psychology spot on, as there are a lot of emotions involved.
Many traders tackling the Forex markets for the first time set high expectations. Instead of ‘learning the ropes’ they go in with hopes of generating unrealistically high returns.
Unfortunately, generating a high return during your first few years of trading is often more luck than skill.
Inevitably, you suffer a series of losses in a row, andyour account goes in a drawdown.
Your confidence is now at an all-time low and, as Murphy’s law would indicate, the minute you stop trading, your system’s best trades come up, without you on them.
Fear then sets in, you procrastinate, and you fail to take every trade your system generates.
Now you are in a worse position than when you started. Your account is down, your confidence is low, and you still don’t have an effective trading system.
A managed forex account service, on the other hand, simplifies everything for you.
There are many benefits associated with a managed forex account service, and we’re going to cover them here.
Why do people choose to trade their accounts?
One of the reasons people trade their accounts is they are curious to see how their trading ideas will perform.
Many traders believe they can outperform the professionals who have dedicated their life to their pursuit. Some mistakenly believe they can transfer their current work or life success across to the Forex markets without putting in the years of study and lessons learned.
The second reason people like to trade their account is they see some people turning a small amount of money, maybe $10,000 into a much larger amount of money in a very short space of time.
Now, anyone interested in making money is going to be quite captivated by the large returns some people quote.
The third reason people trade their account is they are motivated to generate an additional stream of income.
Trading for income makes a lot of sense as most first world countries are quite expensive to live. To try the nice things in life, additional income streams are needed.
The forex markets appeal to those who wish to generate money on the side because it can be traded 24 hours a day, five days a week. The Forex markets are very liquid, which means you can get your money in and out with ease.
What is the main goal of a trader?
The number one goal of any trader is to earn a positive return on the money invested.
While this sounds easy on paper, it is much harder in real life.
Many so-called successful traders make it sound as easy as buying a few currency pairs, hitting sell and banking all your profits.
They neglect to mention the seven or more years or blood, sweat and tears that went into carving their Forex trading career. The countless late nights, dozens of trading books and failed trading ideas.
At the end of the day, your goal should be to generate a positive return. Don’t get this confused with having to do it yourself.
Therefore, you must seriously consider a managed forex account service as part of your financial strategy.
For example, instead of having to:
- stay up late at night;
- analyse all the currency pairs;
- listen to the key economic reports;
- chat with other traders on online forums;
- pour over dozens of charts across multiple timeframes;
- adjust your risk management parameters daily; and
- adjust your spreadsheets,
you can have a professional trading your account for you daily.
You still have the goal of getting a positive return in the market, except you don’t have to spend the time, money and energy associated with generating those returns.
If the main goal for you is to generate a positive return, then you need to consider a managed forex account service.
Why is it important to keep the end goal clear in mind?
It is essential to keep the end goal of what you are looking to achieve front and foremost in your mind. You must constantly be thinking about how to generate a positive return from your funds under management.
In fact, for many people heading into retirement, earning a positive cash flow is such a beneficial thing it can truly change the way you live and the lifestyle you have.
Taking the time to consider a managed forex account service may be the exact thing that you are looking for.
The reason being is you do need to generate a positive return on your money, but you don’t need to spend the time, effort and money and resources to do it yourself.
If you get a buzz out of staying up late at night watching the forex markets, then set up two accounts. The first account is your base. You set the money for the first account with your managed forex account service.
The second account is your trading account. Set your goal to see if you can outperform your Forex account, manager.
What are the top three benefits of a managed forex account?
The first major benefit of a forex managed account service is time.
Time is our most precious resource.
Don’t just think about the time of actively trading. Actively trading is often the fun part of executing the trade and following your stops.
What people fail to realise is it can take at least 6 to 12 months of developing a sound, low-risk trading idea. Then you must backtest your new strategy. This will then give you the confidence to trade the idea and your new setups.
If you are only thinking about the time it takes between 7pm and 10pm to execute your system; then you are mistaken.
Think about the time it takes to proactively build and manage and backtest a fully developed trading system. A professional trading system includes your entry, exit and risk management parameters.
- Working with a professional
The second benefit of working with a managed forex account is you get to work with a professional. Ideally, the managed forex account you select will be run by a professional who has been in the markets for years.
It’s their life.
They live and breathe the forex markets.
You get to work with a professional who has been building their trading systems, building their trading ideas and back testing their ideas in the market to make sure they’ve got a positive expectancy in their trading system.
- You control your funds
The third benefit of a managed forex account is you control your deposit amount and can start and stop when you like.
Not everyone understands this.
When you open a managed forex account service, you control the amount of money you put in.
Sure, they may have a minimum account opening balance, but at the end of the day, you can control your initial deposit above their set minimum.
Here are some points to consider about your account:
- Your Forex account is 100% in your name.
- You control your account 100% of the time.
- The managed forex account service only has authority to place trades on behalf of your account.
- They can never withdraw cash from your account.
- They cannot transfer funds from your account.
Remember, you control when you start and stop trading the managed forex service. You need to keep this in mind as well.
If you want to stop your forex managed account service, you need to discuss it with your forex account manager.
However, you can ask them to close all positions on your account, and they will close them within the hour.
How do I get started with a managed forex account service?
Getting started with a managed forex account service is simple.
Your manager will have an affiliated Forex broker, and your first step is to open an account with them.
Filling out the online forms only takes a couple of minutes.
You submit your forms, and once your account is approved, you will then be able to fund your account.
The entire account opening process will not take more than 24 hours.
You then approve the firm to manage trades on your behalf. Once complete, the next trades meeting their strict criteria will be executed into your account.
As you can see, there are several benefits of a managed forex account service. It is easy to set up. It will save you time. It will remove the emotions from your trading. You get to work with a professional, and you control all deposits and withdrawals to and from your account.