Are Forex Managed Funds a Quick Approach to Riches or to the Poorhouse?
There sure are lots of forex managed funds showing up all over the internet these days. With the economic depression and the stock market tanking, it’s no wonder that a lot of people are looking for ways to make some extra income. Most new forex traders believe that forex trading is simple and they will retire in no time at all. The fact is that only 5 to 10% of new forex traders will last half a year without blowing out their account.
Forex managed funds are a viable option for both the new and experienced forex investor alike. Managed forex accounts are run by professional, profitable forex traders and they trade your account for you for a share of the profits. Some managed funds use robots or expert advisors (EAs) to trade the investor’s account. This eliminates any emotion or fatigue affecting the trading results. These EAs are designed by expert forex traders and most are not available for buy to the retail trader because they’re either too costly or simply not for sale at any price.
There are a lot of forex managed fund sites claiming that you can get rich quickly just by allowing them to trade your account for you. That would be nice but it’s possibly not always the case. Complete transparency is essential for you to make a knowledgeable choice about where to invest your money. Most excellent sites will really show the current results for a real money (not demo) account. This is one of the best ways to determine if the results and drawdown are to your liking. If you cannot find performance results on the website, then perhaps they’re not all that fantastic.
When evaluating performance make sure to pay particular attention to maximum drawdown as a lot of forex managed fund sites show fantastic results but you need to be able to stomach 50% drawdowns to achieve them. Most people simply cannot handle large drawdowns. They like to reckon they can; until it really happens. So, choose in advance how much drawdown that you can handle without wrecking your whole day…or week in some instances.
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