What Are Managed Forex Accounts?

A managed forex account is a type of currency trading account in which a professional money manager makes trades and transactions on a client’s behalf for a fee.

Individual investors who are not experts in foreign currencies but still want exposure to this asset class may consider a managed forex account.

Understanding Managed Forex Accounts

Managed forex accounts are an investment opportunity for those who want the potential of returns from leveraged forex trading, are willing to take serious risks, and want to have professionals do the work of selection and trading. It consists of putting money in a forex account and having a professional trade those funds in the highly leveraged foreign exchange markets. Investors who opt for this sort of account have the hope and expectations of unusually large gains with the understanding that they could experience severe losses.

 

Managed forex accounts offer exposure to an asset class much different than stocks or bonds. Unlike these more traditional securities, which deliver returns in the form of share growth, interest payments, or dividends, forex trades gain in value as the value of one currency will rise or fall in relation to another. Those who invest in currencies will either do so as a means of hedging risk in international markets or as speculators who recognize the opportunity for large shifts in pricing and values between international markets.