Forex Investment Management is one of the terms used to describe the option a forex trader can use to participate in the Foreign Exchange Currency Market (forex) without the need to actively make trade decisions. Another term that will crop up frequently is Managed Forex Account. There are other names, but the key characteristic shared by all of them is that the forex trader pays someone else to manage their trading account.
Advantages of Forex Investment Management
One benefit of managed forex investments is that someone whose responsibilities preclude actively observing the forex market, analyzing the price information it presents, and determining when to enter, exit, or simply observe the market can now participate. This activity is time consuming, and requires almost infinite patience. The decision to wait for market activity to be favorable for an individual trader to enter the market can often occupy hours and days. This “not trading” mode will sorely tempt a beginning trader to try and force the action, and trade in order to feel as though they are really doing something. Someone with a full time career and/or family commitments might find this waiting game unsuited for their lifestyles. Portafina
Another critical benefit for a beginning trader is that the emotional elements that accompany forex trading are mostly eliminated. Fear is minimized. You don’t involve your ego that wants to feel like a winner. Greed that often results in a nice profit being given back to the market is taken out of the picture. With a managed account you just monitor the results. If they are poor, you can objectively consider either an alternative manager, different trading strategy, or refrain completely from trading forex.
A final benefit to consider is that forex investment management supplies the opportunity to compare what the manager did with your ideas. The main advantage to this is that you get to look over the shoulder of someone whose experience vastly exceeds yours. This can speed up the learning process like nothing else. A manager that supplies transparency in the form of explaining the logic and thought process behind their decisions will supply clarity into the chaos of the currency markets far sooner than you could obtain it yourself. You get to see when they are wrong, and they will be, and why. When they’re right, you’ll understand.
This ability to second-guess, or play Monday Morning Quarterback, at the same time seeing the very real effects on your account, will rapidly put you on the path to making your own decisions, even if you still want the benefits offered by a managed account.
Finding a forex investment management company or individual requires you to exercise some diligence. The internet makes this process possible to perform at your convenience. There are websites that do nothing but provide reviews of forex managers. These are your best source for objective information