Managed forex funds have been promoted for many years. They have been around since the advent of foreign currency as an asset class in itself. The idea of managed forex accounts is not new. They They have been around for a long time for stock and bond investors. In essence they are just flexible investment accounts run by a professional.
Nearly 99% of all traders lose money on forex. But these people aren’t traders, but idiots who got greedy after seeing some wild numbers flying around about how much money they could make in forex trading.
Let’s break this concept of leverage down to the baics, and see how it really works. This might be an eye opener to even some seasoned forex traders – and I’m sure that for some of the novice currency traders reading this, it will be totally new material. The figures you can make with 500:1 leverage are crazy – you can easily turn $1000 into $50,000 in a very short space of time.
I wonder how many traders have thought like this when they started out, and how many fell flat on their face after just a few weeks. But reality is, of course, very different, which is most investors give up before they lose their shirts, and open a managed forex account. So let’s look at how leverage can cripple a forex trader, and when leverage causes the trader to go bust.. So, trading EUR/USD, with a 2 pip spread, the trader is already $100 down – or 10% of their account! Then, another 10 pips later, the trader gets a margin call, and their account is already decimated.
And so this is the honest cause why managed forex accounts have become so popular – pure greed. To find the elusive magic wand of forex trading. But after blowing an account or two, most will place their funds in a managed forex fund to ensure success.
Trading forex is hard enough for the professionals, some of whom lose money – so get wise, get real, and open a managed forex account, and forget about your dreams about making millions of dollars in just a few months.
Before investing in a managed forex account, dont make the same mistakes as you did with the initial foray into currency trading, and ensure that you do your proper research.
Thus to conclude, whilst it may seem quite disheartening to realise that it is nearly impossible to make any money trading forex on your own account, you can still benefit from the complex and fascinating world of foreign exchange, by opening a managed forex account. Whilst you can give some credit to these people for trying, it is nearly always more profitable to invest in a properly run managed forex investment.
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