Managed Forex Accounts Malaysia
Professional traders manage your account
If you are new in the Forex market or an experienced trader, then you might have heard about the Managed Forex Accounts. These are the type of forex trading account where the specialist traders with a proven track record, manage your trading account. A professional trader with a decent reputation manage your account and trade in your account on your behalf, and you’ll pay a share from the profit for their service. This is a great opportunity for retail traders who don’t have the time or abilities to invest in the Forex market personally.
How does Managed Forex Accounts work?
Managed accounts can be helpful for traders of all categories. They provide you an exceptional level of accessibility to various asset types and let you broaden your investment strategy. Unlike Bonds and stocks, managed Forex accounts deal in the FX market and bring profit through currency trading. The veteran traders trade and manage the accounts of several traders along with their own account; they generate profit for all. The traders pay the account managers a share from their profit, usually 10 to 30 percent of the profit.
Foreign exchange markets are most common among traders who can invest a large number of funds and expect to earn a higher profit over time. The Forex market is considerably more liquid and gives more trading opportunities compared to other markets. Since Forex trading is the most effective market to look for higher profits, several experts have started offering their service to manage your Forex account. These Forex account managers have their trading history available, which can help you select a reliable Forex Account Manager.
Are the Managed Forex Accounts in Malaysia Safe?
All trading environment comes with risk. Forex markets can be risky, based on how you address them. If you don’t know the market, or how to take advantage of your investments, then you’ll strive to make anything out of your forex trades. The people who get the most out of it are those who discover how to react to financial developments and to global developments that affect currency prices.
Most of the Forex brokers have Forex Account Management built into their system, where you can select the account manager to manage your account. You can choose the best account manager for your fund by verifying the trading history of all the listed account managers.
The Forex Account Management system with the Forex broker is safe because you don’t have to rely on any individual account manager to have access to your funds. When trading through the brokers’ managed account to service, the account managers have trade only access to your funds.
Types of Forex Managed Account
Before you invest through a managed Forex account in Malaysia, you should know the different types of Account Management available in the industry. There are generally 3 types of managed forex accounts; they are – Individual, Pooled, and PAMM accounts.
Individual Forex Account Management
This is the simplest form of Forex Managed account, where the trading takes place in a segregated account, and the account manager makes all the trades. The account manager solely takes all the trading decisions. In an Individual Type of managed account, the account manager is trading for you and only you.
Since there are no other traders’ funds involved in this account, the minimum deposit required may be quite high- exceeding $5,000. Since the fund manager is trading this account exclusively for you, you must ensure a professional and competent account manager is selected. This type of account management is a private agreement between the trader and the account manager.
Pooled Account Management
This type of Managed account is very similar to mutual funds, where many investors put their money together in an account and share the profits after fees and expenses. With pooled managed accounts, there are often a variety of pooled accounts to choose from. Each type may be offering different risk levels, minimum deposits, investment strategies, currencies traded, and fees and expenses. These pooled accounts are usually supervised by the brokers, and the account has only trade access to the funds. So, you get the confidence of fund security with these account types. You can invest in more than one pooled accounts to diversify your risk.
Usually, there are often minimum deposit requirements for participating in pooled accounts. You must know all these factors before investing.
The PAMM Account stands for Percentage Allocation Management Module (PAMM). This type of accounts is held with the broker where an account manager trades his own fund along with funds of others. At the end of the month, the broker distributes the share of profit based on the invested amount. These types of accounts use advanced technology to distribute profits, losses, and fees based on percentages of funds each investor has invested in the master account.
The operating methods of this type of account are similar to copy trading, but the trading takes place in a master account managed by the broker. Hence, it offers the satisfaction of dealing directly through the broker of your choice securely and transparently. However, all the brokers don’t provide a PAMM account.
Who are the users of Forex Managed Accounts?
These accounts are an efficient answer to the Forex traders who want to trade but don’t have enough time to spare and also knowledge in the market. You can hit into the expert abilities of different traders with a managed account. But of course, you will require to give something for the professional service you get. Some Forex account managers take up to 30% share from your profit amount every month.
When you’re picking a Forex managed account in Malaysia, ensure that you watch at the profit and risk ratio of the account manager. This will give you an idea of the average yearly income from your account. Look back into the account managers’ historical profit and risk data and plan your investment accordingly. Check out Forex Copy Trading topic for an alternative to managed Forex accounts in Malaysia.