Without Losing Money

For those people who do not have time to study forex trading or trade their personal forex account, managed Forex trading accounts provide a great opportunity for them to profit from Forex market. Lastly, the investors are exposed to three big threats which are scams, bad brokers and incompetence.

Firstly, there is much in the way of fraud by account managers. These often seem worse than forex broker frauds or product frauds. The investment scammers behind managed accounts usually aim at persuading their victims to put all their earnings into this scheme so as to maximize profits. Sometimes they urge that the victim should borrow money against his house or any other collateral so as to use it in additional investments. You need to know that even a legitimate foreign exchange manager can make your account disappear if he/she is incapable.To evade most of the popular managed account scams, one must initially learn to distinguish a normal managed forex account from a pooled account. This is where money goes from you to your forex broker in case of normal managed forex account. On the other hand, in a pooled account, you send your money to the account manager who is then supposed to pool the money from various clients into a trading account that the account manager controls.

There are legitimate cases of pooled accounts under management however they are HIGHLY prone to fraud. It can be easily seen here that anybody with an internet connection and some computing skills could produce false trading reports for managed accounts. You never know where your funds are when you operate through a pooled Forex account. A lot of these sorts of accounts guarantee very high monthly return on investment. There is no such thing as true guaranteed high percentage returns on investment in forex and anyone offering one is 98% likely to be a scammer, or worse yet just an over-enthusiastic idiot; either way you can kiss your money good bye. But hold on! Your friend invested and has been receiving checks for the guaranteed 10% monthly return on their investment every month for more than one year now. So it must be real?

In a typical managed forex account, your money stays in your forex account with a forex brokers. A Limited Power of Attorney (LPOA) will be signed by you to permit the manager trade on your behalf and there will be a contract stating how the account manager is paid. As such, you can log in anytime to see what trades are being performed and also know your balance at that particular time. This is okay though there remain more serious matters to think about. Don’t just give away your account number and password to anyone or any firm without having a contract and signing an LPOA. Taking money out of your account might not be feasible but they can leave you with no other option but receiving a margin call.

Generally there are three ways through which money can be withdrawn from an ordinary managed forex account by the account manager. The first two are very clear-cut. A flat fee every month or/and commission based on profits for the month may be levied by the asset manager or company; this will typically be deducted directly from your trading capital as specified in your agreement as well as LPOA’s terms. These two options could be either legal or legitimate, so should always be detailed beforehand. Unfortunately, even good account management system will turn into greedy animal that eats up all of one’s profits if not principal as well.

This is how the third way an account manager can get money out of your forex account works. Some account managers will only handle your account if you sign up with them through their favored forex broker(s). This therefore means that they also act as IBs of that forex broker and in return getting a fraction of the spread or commission charged by your forex brokerage on every trade carried out in your account, either by you or by the account manager himself. As a consequence, more trades equal greater profits for the account manager regardless of whether you make any profit or not. Many such commissions on spreads are earned by these kinds of accounts managers who then make numerous other trades; this typically results in more than required transactions. In the stock market, this is known as churning the account. There are legitimate firms that only forex trade accounts they are IBs for, but beware that there will still be temptation to churn your account in these situations. If you choose this type of company for managing your forex accounts, ensure you enquire from them about how many trades and what trade sizes they expect in a typical month. The other disadvantage with such an arrangement is that it confines you to a forex brokers who may not satisfy any other forex trading needs that may arise.

If the names don't quite match, proceed with caution while looking for information about the best online trading company in Dubai on the internet or on websites run by regulators. A business going by the name Perfect Accounts, Inc might or might not be Perfect Accounts, LLC or Perfect Accounts, Co. Scammers occasionally attempt to obtain a name that is as similar to a legal company name as possible in order to borrow some validity. Reputable best forex trading companies in Dubai frequently have names that are similar.

I've recently come across a few websites that compare different managed FX account providers. While there are certainly some excellent comparison sites available, keep in mind that some exist solely to direct you to the business that offers the greatest commission for bringing in new customers. Be cautious if you wish to put money into a managed forex account! It will require a lot of time and work to conduct research before making an investment. However, you also had to put in a lot of time and effort to earn all of the money you wish to invest. Consider for a second what you would do if your entire investment vanished as a result of fraud or incompetence before telling me that it's too difficult to investigate a forex account manager or a forex management firm. After that, let me know whether my recommendations need too much work on your part. If your primary reason for considering someone to receive your life savings is their attractive website or a recommendation from a friend of your third cousin, conduct a thorough investigation yourself or think about hiring a professional investigator to make sure everything is in order before entrusting hundreds of thousands of dollars to someone you don't know well.