The Forex or foreign exchange market is fraught with substantial risk of loss of capital, and thus is neither suitable nor recommended for all investors. Having to perform leveraged trading will amplify and expand possible losses and profits.
What is of principal and major interest is that past performance in the Forex market is truly not indicative of the future outcome of Forex investments. Thus, many people who wish to deal in the Forex market turn to a professional managed Forex account.
This managed Forex account will bring to the investor who cannot or will not conscientiously observe the Forex market 24 hours a day the opportunity for them to actively participate in the exciting world of Forex trading. Ordinarily these programs have a minimum amount of money that will have to be invested. However, many begin at $2,500. More details: http://www.dukascopy.com/europe/english/forex/management/externally-managed-accounts/
Countless investors prefer to have their capital managed by professionals, thus a managed Forex account becomes not only appropriate for them, but can take away the anguish and extreme tension often created by investing in Forex.
You see, performance by the stock market has absolutely no relation to a professionally managed Forex account. This is important if someone has a stock portfolio that needs to increase its diversification as well as giving some leverage to the risks involved in having a portfolio that is brimming with stocks.
Not only is the Forex market filled with tensions, but also it requires a tremendous amount of trading discipline. A professional fore manager will only use the major currencies, which will in effect minimize some of the risk.
Also by having a professionally managed Forex account the investor can receive not only real-time reports but also real-time account management. When using a professional it will also increase the leverage of the investments, however it will also unfortunately increase the risks.
A tremendous advantage to an investor using a professional Forex account manager is that the investor will be able to withdraw monthly from their account without penalties or fees.
There are also managed Forex accounts that deal strictly with fore hedge funds, however to invest in those, you will be required to meet some very stringent requirements.
For instance, for individuals applying for this kind of account, the individual must have earned more than $200,000 per year for the preceding two years as well as expecting to make the same or greater amount the coming year.
Whether you wish to be involved in a managed Forex account for simple trades or Forex hedge funds, the common way that such managed accounts work is through a limited power of attorney agreement between yourself and the management company.
This does not mean that the managing entity may withdraw funds, nor even deposit funds into your account, but rather that it can trade for you without transferring funds into their own account.