Find the best investment advisors and make money online with no effort. Check out our top picks of Forex managed accounts (PAMM, LAMM & MAM accounts) and choose the most suitable investment plan for you.
What Are the Best Forex Managed Accounts And Why You Should Get One
A managed account is one that is owned by an investor or institution but is overseen by a professional money manager. The money manager is granted access to the account and makes pertinent decisions in alliance with the client’s goals and objectives. In forex managed accounts, the manager makes trading decisions in line with the client’s risk tolerance, capital value, and his expected goals.
How it works
In fx managed accounts, investors seek the services of professional managers to get their accounts managed at a fee. Most managers have a minimum amount of $250,000 while others accept lower amounts, in some cases $25,000.
Once an investor agrees on terms with a manager, they sign the Limited Power of Attorney (LPOA) to state the terms and conditions set. The manager is always to act in favor of the investor and could face criminal penalties should he breach the contract.
Managers are to always report regularly to the clients showing the progress. They charge annual fees of 1 to 2% for managing the accounts. This percentage is of total assets under management (AUM).
Pros of Managed Investment Accounts
There are several reasons why people choose to have managed forex trading accounts instead of actively running them.
1: No stress in emotions
Most people who get in the forex market get easily affected by emotions whenever a trade gets into profit or loss. This, makes most traders make trade decisions influenced by how they’re feeling at that moment.
Unlike the average trader, professional managers know the importance of setting emotions at bay and opening positions based on logic.
Hence, clients who can’t handle the emotional pressure from the market easily assign over their accounts.
2: More time for other things
Not everyone who wishes to invest in the market is cut out to be an active trader. Some are business people or maybe employees with a full-time job. Due to this, most just fund their account and check them occasionally while letting a professional manager oversee its activities.
3: Disciplined process
Professionals know the best time to enter and exit a trade. They know that it’s better to stay out of the market for a week instead of opening filler trades.
Unlike the average trader, they have a disciplined guideline they religiously follow to ensure they achieve maximum results for their clients.
4: Expert experience
Due to the nature of professionals, a client is almost guaranteed a great experience when they find a manager who aligns with their risk appetite and can help them achieve their financial goals. By getting a great manager, you’re assured that your capital is safe and your goals will be met.
Types of managed forex accounts
1: Individual account.
The decisions made in an individual account are based on the client’s requests. Since a money manager runs his account individually, the minimum deposit required is $10,000.
The account can be traded with any instruments provided by the broker that the client wishes to trade.
2: Pooled accounts.
Like the name suggests, pooled accounts deal with many investors.
The clients open accounts and are managed by a single investor. The minimum deposit is usually $2,000.
3: PAMM accounts.
Percentage Allocation Management Module (PAMM) accounts are similar to pooled accounts but offer the convenience of copy trading because they’re automated.
To the trader, they promise an extra source of income besides trading on his real account. To the investor, PAMM account offers professional experience from traders who are trusted by others to give a consistent passive income.
The amounts pooled together are determined by percentage hence the client who offered the largest amounts to the manager gets to receive the largest amounts of profits or losses.
Investors get to evaluate managers by their rating, years of experience, amount in his portfolio and possible credentials.
Likewise, managers can either accept or reject a client at their discretion.