The Forex Account Fund Manager vs. The Traditional Forex Broker
When entering the forex trading market, one will have to open a trading account with a reliable forex broker. New traders often find themselves confused and overwhelmed due to the numerous types of accounts available, especially when they realise the different types of accounts need to suit their trading style for greater forex success. Once you have opened a trading account, you will have the option of using a traditional forex broker or employing the services of a forex fund manager. Both have their disadvantages and benefits, so it is important you research and gain an understanding of these aspects.
The traditional forex broker
There are many similarities between the fun manager and the traditional forex broker; however the majority of traders choose to work with this broker out of reputation and ease. The traditional forex broker can b compared to an individual checking account at a traders average back. All one really needs to do is deposit money into the brokerage and trade sensibly with the hope of a profit rather than a loss. While the broker manages your transactions, it is you who will be making the trading decisions as the forex trading on the specific account in question. The broker will merely offer advice and guide you; he cannot conduct trades on your behalf as signified by regulatory agents and financial law. Instead, he earns his money by charging a commission on each transaction the trader makes.
As the forex broker offers advice on which trades to take advantage of, it is important to register with one who is reliable and trustworthy. As he will be pointing out which opportunities are best for you to trade, you must be sure he is not exploiting you and earning on your potential bad trades. It is best to do proper research and critically examine different brokerages before choosing a particular one.
The forex account fund manager
If a retail forex trader should choose to open a managed account, he would encounter a fund manager rather than the traditional forex broker. The most noticeable difference between these two trade managers is that the broker charges commission per trader transactions, whereas the fund manager charges an annual investment fee. This makes for less potential conflict of interests when traders are provided with advice on their different investments. However, just as the broker is bound to look out for their clients best interests so are the fund managers.
Where are the differences?
Although both fund manager and forex broker offer advice on trading opportunities, their services do differ greatly. A broker does not always monitor the trading account, whereas a fund manager oversees it on a daily basis. Based on this it may seem a better option to work with a fund manager as the maintenance of your trading account is of greater importance. However, if you are a long-term trader who does not trade on a daily basis this may not be a priority. It would be recommended to work with a broker and be charged a transaction fee instead of an annual sum.
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