Managed forex trading has often floated under the nose of many new traders despite having an ample history.
Entering the world of online forex can be a challenge for trading beginners. There is a lot to learn, and many different topics to cover. A solid understanding of fundamental analysis, technical analysis, charting, indicators, and the foreign exchange market drivers is the very least of what you will need to be equipped with to be successful long term.
It can take quite a considerable amount of time to build basic knowledge in this area, which unfortunately puts many people off trying.
That is not the right attitude to success.
The large time investment, along with the money it would cost to build a foundation in trading can cause people to pause and not trade at all, or it can cause them to look for other ways to make money.
A considerable number of potential traders choose to consider copy trading platforms instead because it is a lot more simple to learn and get started.
With copy trading platforms, you can follow other experienced traders and potentially learn some of what they are doing along the way. Usually there is a small fee payable which is a few percent of your profits, but not always. The variation depends on the trading platform.
Whilst following or copying another trader may sound great in theory, in practice, you still need to keep a close eye on things as these are not necessarily professional traders you follow.
How to find a professionally managed forex trading account
Managed forex accounts are one way to take the weight of responsibility on the trades off yourself, whilst having a professionally managed forex trading account. You would also be able to choose a fully regulated trading platform that gives you peace of mind on security. It should be a huge relief to know that your account is with an experienced trader, and the platform is appropriately regulated.
Some of the best forex account managers may charge you up to 25% of your profits for the pleasure of using their services, but as it is only coming from profits, this is potentially a price worth paying. After all, 75% of the profits from a professional trader could be better than 98% of profits from a less established account manager.
Knowing how to find the best managed forex trading accounts is then a big part of the difficulty in getting started down this path. It could be that you search for one with a good track record of success and read many different reviews, but in the end, you could be better using resources that have done this work for you to a certain degree and at least reduce your time load slightly.
If you are learning how to trade forex yourself, you will need to find the best broker for you, but with managed forex trading, you need the account manager and the trading platform to both be trusted.
If you decide to go down the route of forex managed accounts, once you have the account manager selected, you will next need to set out your risk level and maximum drawdown levels. You should also take a particularly close eye on performance levels throughout the early stage of the relationship whilst you are getting comfortable with the trading style, and learning what you can along the way!
Controlling Leverage In Managed Forex Trading
When the foreign exchange markets are particularly volatile (such as now), things can move very rapidly, and people can unfortunately end up wiping out their accounts without an eye on proper risk management.
Leverage in forex trading makes this even more so, as professional level traders have access to considerably higher allowances than you might as a retail trader. Where your own leverage in forex may be capped at 1:30 for major currencies, pro traders can have more than 1:300 or 10x the level.
You should be able to request your forex account manager stick to predefined levels of risk and maximum drawdown levels. This can protect you from over-exposure on one single trade.
If in doubt, do more due diligence. Why not read more guides on other trusted resources to ensure that you are getting referred to the most appropriate account manager for you. Only when you feel comfortable should you even consider testing the waters with real money accounts. Even then, start with a low minimum and maybe increase once you have some experience and real trust in the process.