Forex Managed Account

Forex Managed AccountThe minimum investment is $20,000.

You are the only person who has access to your funds. You own the account and are the only one who can make deposits or withdrawals from this account. The only power you grant to Forex Trader for the managed account is the power to trade your account through a Trading Power of Attorney which you need to authorise. You have control of this at all times.

Once you have authorised Forex Trader to trade your account and your account has been funded we can start trading on your behalf. If you don’t like what is happening, you also have the control to revoke the Trading Power of Attorney at any time. Also please note you are unable to trade a your managed account yourself. If want to trade yourself you can open an individual account.

The way in which Forex Trader makes money is by making a profit and taking a percentage of the profit called a performance fee. This mean we make sure you do well and do not get paid ourselves until you get paid first.

One of the great advantages of a forex managed account and forex is that there is no lock-in period or minimum period. It’s your account and you are free to withdraw your funds at anytime without penalty. This is one of the many advantages that forex has over other investment types such as property, mutual funds, bonds and term deposits. It is essentially a cash account that has the potential to make returns in a month what those investments make in a year without any penalties for early withdrawal or something.

In a managed account you own the currencies that make up your portfolio. Unlike mutual funds or hedge funds, which commingle your funds with other investors, a managed account is in your name and all or part of your funds can be redeemed within one day.

How it works, is the investor opens up an account at ThinkForex Ltd. The investor then funds their account. No one can touch the money in this account but the investor. The trader cannot deposit or withdraw funds from the investor’s account. The investor retains full access and control over the account at all times. A managed account allows an investor to have their funds traded professionally by an experienced trader via a trading power of attorney agreement.

A managed forex account enables the trader to trade an investor’s account on their behalf without having to transfer the funds into their account. It is the ideal way to have your money traded for maximum safety and control. You can check the balance of your account at anytime, see the daily trade activity, or withdraw or deposit funds when you please. You can also revoke your trading power of attorney at anytime if you are not happy with how the trader is managing your funds.

The trader managing the account trades all investor’s accounts as one large master account using PAMM. The PAMM (Percent Allocation Management Module) distributes gains, losses and fees on an equal percentage basis. In this way all accounts regardless of size obtain the same percentage returns.

Investors are typically granted live read only access to their managed account either through an online report viewer or the trading platform. They can then view their account, including balance and activities, however they will not be able to place their own trades on the account, unless they revoke their trading power of attorney, which enables the trader the ability to trade on their behalf.

The way in which the performance fee works is based on the highwater mark methodology. This is a standard methodology and is common.  How it works is that the performance fee is only paid on new net rises in asset value of your forex account so if there is a temporary drop in the net asset value of your account, this must first be recovered before any new performance fees are charged. What this ensures is that the Forex Trader only receives a performance fee when your forex account value exceeds its previous high. For example you start with a $100,000 account with a performance fee of 50%, and during the month there is $10,000 gross profit. The performance fee deducted would be 50% of $10,000, which is $5,000, so your net profit would be $5,000 and your account would now have a “watermark”new balance of $105,000. If in the next month there was a loss of $2,000, there would be no performance fee deducted, since there is no profit, and your new balance would be $103,000. Your “watermark” is still $105,000. So there will be no performance fee deductions until you get past your current “watermark”.

Your account is electronically connected to the Forex Trader account by ThinkForex. All this allows is that every time a trade is taken by Forex Trader you will get a duplicated order electronically into your forex trading account. Please note ThinkForex has a firewall for your account from the Forex Trader so it is impossible for anyone but you to access your funds. Also with the money laundering laws as the account is in your name, the money can only be sent to a bank account in your name which means physically it cannot be sent to anyone else’s account only yours.

One of the reasons the results are so good, is because your account balance is compounding daily. So every time there is a profit from a forex trade the following trade will be placed with a bigger equity balance. This compounding effect can create very rapid growth month after month.

Our Forex managed accounts have extremely strict risk parameters in place as we only ever risk a very small percentage of your account balance per trade. We risk no more than 2% per trade. The drawdown is cut down to a minimum, however you must understand that trading forex is geared for a high return each year, and to target say 100% per year does involve some risk.

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