Managers of Your Foreign Exchange Rates Account
One type of trading account that you can get is the managed forex account. With this account you do not do any of the trading. A manager who oversees your trading account will do the trading on your behalf and you receive the profits. It is important that you know about the types of managed accounts you can get and the types of managers that these accounts may have.
The Types of Foreign Exchange Rates Managed Accounts
A lot of people look at managed account for their foreign exchange rates trading. These accounts offer you profits from the forex market without the hassle of having to trade. There are two different types that you should be aware of:
- The pooled account is the cheaper option, but you have to share your profits. With this account you are one in a group of investors who have pooled their money in one account. The profits made from this money are divided among the group in accordance with risk tolerance. This means that investors with higher risk tolerance will get more of the profits.
- The individual account is the more expensive option because you are the sole investor and beneficiary.
The Immoral Manager
There are three types of managers that you could get for your account. The first that you should know about is the immoral manager. This manager does not actually care about what happens to you. They want to make money from you not for you. These managers will not view their clients as people, but rather something they can exploit and charge. When you have this kind of manager your trading account could be mismanaged or you could be given incorrect information about what he manager is doing.
The Amoral Manager
The second type of manager that you should know about is the amoral manager. Some traders view these managers as not too bad, but they are not very good either. These managers will not blatantly lie to you like the immoral ones, but they are only looking out for themselves. They will fulfil their obligations when it is advantageous to them and not for your interests. Managed accounts with these managers can suffer indifferent management and bad advice.
The Moral Manager
The moral manager is the one that you want looking after your account. These managers will treat you fairly and look out for your best interests. They will complete trades and using strategies that they feel suit your interests the best and look out for you. The one problem is that it is often harder to find these managers than a manager that fits into the other groups. The moral manager is the only one with a conscience that you can rely on and trust.
Determining Your Manager
When you get a managed account you will not know which type of manager you have. There is no way of knowing which manager the brokerage company will place in charge of your account. To determine the type of manager you have you need to wait until trading has been done. You should ask them about what they are doing and ask for proof. Of course, you should do this calmly and politely in case you have a moral manager. From the information you are given you should be able to determine the type of manager you have.
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