Why Managed Forex?

Why open a Managed Forex Account?

Self-trading currencies are at best a very difficult proposition. Many forex investors do not have the time, experience or desire to trade in the forex market themselves. Being able to follow the market movement 24 hours a day is a very essential part of the trading. Managed Accounts are created for investors with risk capital who do not necessarily want to trade on their own.

In a managed account you own the currencies that make up your portfolio. Unlike mutual funds or hedge funds which commingle your funds with other investors, a managed account is in your name and all or part of your funds can be redeemed within one day. The managed account only holds your currencies and allows you to follow a cost-basis for each of the currencies in your account. Based on your long-term goals, risk tolerance and time horizon, you can select a professional currency manager with a managed account that can actively manage your portfolio. Whether you're interested in a conservative or aggressive program, we can assist to find the trader who will suit your risk parameters.

How it Works?

How it works, is the investor opens up an account at a reputable brokerage firm, usually of the trader's preference. The investor then funds his account. No one can touch the money in this account but the investor. The trader cannot even deposit or withdraw funds from the investor's account without the proper authorization to do so, and the investor retains full access and control over the account at all times. A managed account allows an investor to have their funds traded professionally by an experienced trader or automated system via a limited power of attorney agreement (LPOA). A managed forex account enables the trader to trade an investor's account on their behalf without having to transfer the funds into his account. It is the ideal way to have your money traded for maximum safety and control. You can check the balance of your account at anytime, see the daily trade activity, or withdraw or deposit funds when you please. You can also revoke your LPOA at anytime if you are not happy with how the trader is managing your funds.

The trader managing the account trades all investor's accounts as one large master account using PAMM or LAMM, or MAM software, which is offered by most leading brokers. The PAMM (Percent Allocation Management Module) distributes gains, losses and fees on an equal percentage basis. In this way all accounts regardless of size obtain the same percentage returns. The LAMM (Lot Allocation Management Module) allows the trader to allocate different trade lots to each investor's account. This grants the trader the flexibility to use different leverages for different types of investors. The MAM (Multi-Account Manager) is a combination of the features found in a PAMM and LAMM, and offers more flexibility to the trader managing investor accounts.

Investors are typically granted live read only access to their managed account either through an online report viewer or the trading platform. They can then view their account, including balance and activities, however they will not be able to place their own trades on the account, unless they revoke their LPOA, which enables the trader the ability to trade on their behalf.

www.cayoflow.com © 2009 | Privacy Policy | Terms Of Use | Risk Disclaimer

RISK DISCLOSURE: Alternative Investments carry a high degree of risk, and may not be suitable for all investors. Before deciding to participate in Alternative Investments you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with Alternative Investments, and seek advice from an independent financial advisor if you have any doubts or concerns.