Beating The GEC With Forex Managed Accounts

By Brendan Wilson

Often you will see claims on the internet about potential returns that might use terms such as 50% a month or more. Whilst these types of returns are possible it is highly unlikely that they are sustainable. Personally I have not witnessed anyone achieve figures such as thing for a prolonged period of time. Much like the laws of physics where forces are equal and opposite, risk and reward are much the same. You simply can't get large returns without taking large risks. The markets invariably punish those that ignore this rule.
If you do not have the skills or time to actively trade you can still benefit from the potentially lucrative forex market. A forex managed account gives you access to be able to trade forex without the need to watch the markets around the clock. A professional money manager can trade your account and help add some more diversity to your investment portfolio, without the added exposure of adding to investments that already may have too much exposure to the equities markets.
Which broker you choose can be critical in determining whether or not your managed forex experience is a profitable and pleasant experience of a complete nightmare. From experience I can say that which broker you choose needs to be uppermost in your considerations. Do your homework on the broker and make sure they can deliver competitive spreads and commissions. There are many important things to consider when entering the managed forex arena for the first time. Below are some points you should be mindful of that could well make the difference between an enjoyable and profitable experience and one you would sooner forget.
Perhaps the first thing you are going to look at when considering a managed forex account is their results. People invariably are impressed by big numbers but don't let this fact alone blind you to the down side of impressive looking statistics. Much like physics, where reactions are equal and opposite so are profits. Big profits equal big risks. Look for consistent and sustainable profits, don't base your assessment on 2-3 months worth of performance. The market goes through cycles, sometimes these cycles can last sixth months and deliver unusually high returns. For this reason to be realistic you really need to look at 2 years worth of results. If a trader can only offer you 6 months worth of history it probably isn't enough.
The principal purpose of any managed forex account is to achieve sustainable high, long term results, with a minimum amount of draw down and a demonstrable long term record. Search for an investment provider who can prov these attributes over an extended period of time. Three to 6 months of trading statements is simply insufficient to make an informed opinion on the longer term prospects of a managed investment offering.

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