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The prospect of a high return forex managed account is appealing to everyone who has the capital to invest. But it is important to know what to look for before placing your money with a forex account manager.
In this article, we’ll uncover everything you need to know about finding a high return forex managed account.
What is high return forex managed account?
A high return managed forex account is a trading account managed by a professional trader who can achieve above-average returns.
Forex trading is one of the fastest-growing markets in the world for retail and professional traders but is also one of the toughest to master.
There are nearly limitless forex trading strategies that can be employed, which is why this area can be challenging for retail traders.
As a result, many look to employ the services of a Forex managed account to help generate returns on their account.
What kind of returns can you expect?
In the world of managed forex accounts, returns can vary depending on the strategy used.
Many forex funds in our Trading Cup service generate steady returns of 1-3% per month.
Monthly performance from TradingCup.com signal provider
This is seen as a more conservative approach.
Some funds can achieve higher returns, between 4-6% per month, which is considered impressive in the forex market.
Monthly performance from TradingCup.com signal provider
However, there are strategies that aim for even bigger returns, often over 6-10% per month.
Monthly performance from TradingCup.com signal provider
These high returns usually come from aggressive risk management techniques, like the martingale strategy.
While the potential gains are larger, the risk also increases.
And just because the returns are high does not mean it is the best forex managed account or copy trading solution.
To find the best, you do need to take into account that the higher the return, the higher the risk you’ll be taking on.
Learn while you earn with the best managed forex accounts
Managed forex accounts offer a unique opportunity to grow your investment while gaining valuable insights into the market.
But remember, even with a managed account, forex trading carries a high level of risk.
The performance of your account depends on the market and the strategies used by the account manager.
One great advantage of using a forex account management service is you can watch the markets and see all your open positions.
This allows you to learn while you earn.
You get to experience a wide variety of market conditions, including both wins and losses, all while being managed by a professional fund manager.
This hands-on experience helps you understand how the forex market works without being overwhelmed.
How do I find the track record of a managed forex account?
The most reputable forex money managers will have a full trading history you can view, dating back to when they first started trading their managed forex fund.
Many will also show results from historical backtests.
Be aware of this and know the difference between live trading and hypothetical back-tested results.
The best will showcase their results via an independent third party such as MyFXBook, TradingCup or FXBlue.
Performance tracking from TradingCup.com signal provider
These results will show you their past performance, but keep in mind that past performance is no indication of what will happen in the future.
And they will highlight whether the account is a demo or live trading account, which is extremely important to know.
If your fund manager only has demo trading results, you might want to raise the question with them and ask for their live account performance.
By viewing the past monthly performance and track record, you can identify the level of risk of using their managed forex services and get a feel for their forex trading strategy.
Understanding different account types: PAMM, MAM, Copy Trading and managed forex accounts
There are different types of managed forex accounts you can choose from.
The most common ones are PAMM, MAM, and copy trading accounts.
Each of these account types works a bit differently, but they all aim to help you grow your investment without needing to trade on your own.
MAM Accounts
A MAM account (Multi-Account Manager) is similar but gives the manager more control over how each individual account is traded.
It offers flexibility for fund managers who want a more customised approach for their investors.
At ACY Partners, we offer four types of MAM accounts tailored to suit different trading needs:
- Proportional by Equity Allocation
- Proportional Allocation P/L
- Proportional by Balance Allocation
- Percent Allocation by P/L
PAMM Accounts
A PAMM account (Percent Allocation Management Module) pools money from multiple investors.
The account manager trades for everyone, and the profits or losses are split based on how much each person invested.
Copy Trading Solutions
Copy trading is another managed account option.
With this, you automatically copy the trades of a professional trader in real-time.
This type of managed forex trading is good for beginners or those who don’t have time to trade.
When you open a managed forex account, you might be asked to pay a:
- management fee,
- performance fee; or
- both.
- This fee comes from the fund manager running the account, not the forex broker.
However, many of the best forex fund managers don’t charge a management fee.
Instead, they charge a performance fee, typically around 20-30% of the profits made.
This ensures your interests and the fund manager’s are aligned, as you only pay a performance fee if they continue to outperform the previous high watermark.
Different managed account providers may offer a variety of strategies to improve your account performance.
A few of the trading strategies employed by active traders include but are not limited to:
- Full algorithmic trading strategies
- One or more Expert Advisors (EAs) in MT4 or MT5
- Martingale position sizing systems
- Rule based discretionary systems
- Reversal trading
- Trend following
- News trading
- Swing trading
- Position trading
- Range trading
- Range breakouts
It’s important to compare these options before deciding which one suits your goals.
Managed forex accounts come with different types of investment accounts.
Whether you choose a PAMM, MAM, or copy trading account, make sure to understand the risks of the strategy the fund managers are using.
Is the Martingale Strategy Right for Your Managed Forex Account?
Many Expert Advisor (EA) forex trading strategies used by fund managers rely on the martingale strategy.
This strategy involves adding to losing positions in the hopes the market will eventually reverse, allowing the account to recover.
You can often spot funds using this method by looking at their equity curve.
It usually appears smooth with quick bounce backs from big drawdowns.
However, the martingale strategy is known to be a highly risky trading strategy.
While it can lead to big gains, it also carries the risk of significant losses if the market doesn’t reverse.
So, how does martingale work?
It keeps doubling down on losing trades, hoping to make up for losses when the market reverses and allows a handful of bigger lot size profits to offset the initial group of smaller lot size losses.
This approach, known as a martingale EA, can produce impressive returns, but you should be aware of the risks involved before committing to this strategy.
How forex account management services help you navigate the forex market
Forex account management services are designed to make trading easier.
They help traders or investors by managing their forex trading account for them.
If you’re new to the forex market, it can be hard to know where to start.
A managed account service lets an expert handle the trades on your behalf.
This can help improve your return on investment without you having to make every decision.
When you open an account and sign the Limited Power of Attorney (LPOA), you will be asked to choose the best trading style (if your fund manager has multiple strategies) that suits your goals.
Each managed account service may have between one to seven or more strategies you can allocate your funds to.
Once you get a feel for how the fund is trading and you have been watching 1-2 months’ worth of trading activity, some clients like to open a demo account to try to replicate the knowledge they gained from reviewing all their trades.
This hands-on approach will help you navigate the forex market more effectively.
How can ACY Partners help you?
At ACY Partners, we help forex fund managers grow their business by offering our cutting-edge trading platforms so they can focus on their trading.
Our Money Manager program provides Forex managers with some of the most competitive pricing structures and liquidity to ensure you are competitive in this fast-paced trading environment.
If you are looking to set up your Forex money manager business, then let us have a chat about how we can help grow your business.
