The forex market can be a very profitable venture, but only if you truly understand its nuances. Often, the market is volatile to the extent that traders lose all their deposited funds. One of the reasons traders lose their money is because of missing crucial developments probably while offline. That is why the majority of traders consider automated trading as a vital ingredient of a successful trading strategy.
Granted, automating traders achieves essential objectives, like affording the trader more free time. Most of the time, traders use forex expert advisors to come up with trading strategies and leave it to them to execute. Alternatively, traders can create a simple automated forex trading system using the best forex indicators available. Nonetheless, this may not always work, especially in a highly volatile market. For this reason, traders should consider soliciting the services of professional money managers. This article describes the qualities of an excellent professional money manager.
Forex traders have other options when they want to delegate the running of their accounts. For instance, they can buy, rent, or create FX expert advisors to perform critical activities related to identifying trade opportunities, and entering and exiting trade positions. Nevertheless, the options lack an essential quality that professional money managers have. That is the ability to adjust trades as the market progresses. Interestingly, that is not all.
The relationship between professional money managers and their clients is formal and is guided by a set of rules and regulations. For instance, the money managers and their clients must sign a management agreement that sets forth the terms and conditions of the relationship. For example, the agreement may prevent the money manager from withdrawing or depositing funds in the client’s account. In short, the presence of such conditions precludes any possibility of conflict between the parties.
On the contrary, simple and even sophisticated algorithmic FX trading does not have any agreement besides the warning that the FX EA does not guarantee profits. Usually, this is because expert advisors are simply algorithms that do not have a human side. Besides, the relationship between an expert advisor and the user is one-sided. In particular, the forex robot can never be empathetic so that it can make the best decision. Instead, the system will choose options as per the parameters specified without consideration of what you feel. The robot will not call you to brainstorm in a possible direction, for instance.
Excellent market research skills
A majority of automated FX trading systems that are available in the market are great at market research. However, a forex robot is only as good as the creator. It means that you are at the mercy of the developer of the robot, which means disaster if the developer has poor market research skills. Fortunately, traders can test the capabilities of the robot before enlisting their services.
In like manner, traders need to consider the market research capabilities of a potential account manager before anything else. For such professionals, it may be hard to determine their skill level, but using recommendations and researching their history is an excellent place to start. It means that you should go for professionals that have a strong record of accomplishment. If the professional manager is a company, you can research its money management history as well as looking through their trading strategies. Alternatively, you can consider the skills of the individuals behind the company.
Money Making attitude
One of the core reasons why traders opt for automated trading is to avoid the psychological aspect of forex trading. Often, this aspect pushes traders to focus on being right instead of making money. Interestingly, the forex market consists of irrational players with only one agenda to generate profits. To them, there is no right and wrong but only profit and loss.
An excellent professional money manager understands this concept. Instead of focusing on their emotions, the professionals will use the best forex indicators for automated trading, among other tools to spot trading opportunities. Nonetheless, the money managers know that they are fallible, and they will keep adjusting their strategies to align with the changing realities.
Above all else, a good money manager has the right licenses to operate. Often, forex brokers offer managed accounts for their clients. Of late, cases of fraudulent players in the forex market are on the rise, probably because of its lucrative nature. Usually, such swindlers use fake business licenses to hoodwink their would-be prey. It means that you must find out the registration status of the money manager. Usually, the brokers have a unique ID, which they post on their website, which traders can use to ascertain their legitimacy.
A regulated money manager ensures safety for your funds. In the first place, you can rest easy because they will not disappear with your funds. Secondly, a business license implies that the money manager is operating with the full knowledge of authorities. In case of anything, you have the law on your side, and you can seek legal redress.