Finding a reliable Forex managed account service can be a difficult and time consuming. However there are a few things you can do to limit your time spent searching. Here we are going to help you cull the riffraff and to allow you to find genuine talented Forex managers.
Be realistic - How much return do you want?
Risk and reward go hand-in-hand. If you are expecting a very high return, say 10-20% per month, then you should expect that the manager will have to use a high exposure on the market. This leave the account open to additional risk. One thing which is very important is realising you cannot have cake and eat it too. The more return you desire the higher the risk you must take to achieve the return.
Once you have an idea of the realistic return you desire then you can start filtering out some of the managers that don't fit your risk/reward profile.
Do you want a manager in you own country?
Having a manager in your own country makes it easy for you to communicate with. Make sure the manger has an address where you can find them. I have heard sad stories of investors trying to contact and even physically find their manager only to be unable because they don't have an address. Red flags and sirens should scream if there is no address or phone number.
Make sure the manager clearly provides evidence for their trading; verified and/or audited
Does the forex fund manager provide their trading history in third party analytics like FXBlue or MyFxBook? If so, is it verified? Better still is it independently audited? This is proof that the manager is not fudging their results.
FXBlue: look for Verified or Semi-Verified results
MyFxBook: look for "Track Record Verified" and "Trading Privileges Verified"
Are they regulated? - make sure they provide evidence for this.
A manager who is regulated is clearly obeying the law in their jurisdiction. When regulated you also have the protection of the law... for example, in Australia, ASIC is the regulator and the protection is available by the Financial Ombudsman. Additionally this will also ensure the manager is following the correct contractual documentation like a MDA contract.
Does their trading history stack up?
Make sure the a manger shows history for more than 365 days. Short historical figures may point to a manager who regularly has to stop trading because their results are poor or their trading history isn't pretty.
Does their trading style match your expectation?
Swing? Scalp? Trend? Mean-reversion? These are some trading styles you may want to consider. Remember trend, swing and mean-reversion may hold trade for more then 1 day, sometime a week, so be prepared. Scalping usually trades very short term.
One trading style your should avoid at all costs is Martingale and Grid strategies. This is the mathematical theory of adding to losing positions to average the target or break-even closer to price. Even though it looks attractive it is guaranteed to make you lose, and lose big. One way to identify this is a smooth equity curve. See image.
Regardless of the Forex Managed Account you are looking at, we're here to help you make an informed decision. Use the following steps to find your own high performing reliable Forex managed accounts and if you would like to more information before you invest call us on 03 8662 4000.