There are many different types of forex accounts available to the retail forex trader. Demo accounts are offered by forex brokers as a way to introduce traders to their software and execution methods. After the trader has tried out demo accounts with a few different dealers, a funded trading account would be the next step.
Mini accounts, full accounts, and managed accounts are the most common types of funded accounts. Mini accounts are similar to regular trading accounts; however currency is traded in lots of 10,000 rather than 100,000. This allows for lower mandatory initial deposits, and greater customization of risk management.
It is important that the currency trader consider what they want to get out of their account, before deciding on the type to open. Demo accounts, and mini accounts, are great for the retail forex trader to learn a profitable system, and get used to the execution methods of the broker. For the currency speculator that doesn't want to trade by themselves, a managed account would be better.
Forex Managed Trading
Forex managed trading involves a money manager that trades a forex account on behalf of a client for a fee. Managed forex accounts are similar to hiring an investment advisor to manage a traditional investment account of equities and bonds. Returns and fees between managed accounts can vary greatly; therefore, it is important to research your options thoroughly before assigning your account to a professional manager.
Managed Forex Account
Some managed forex accounts involve the trader "teaching" the manager what signals to look for and how to interpret them. It is thought that forex managed trading takes the psychology out of managing personal wins and losses.
Another managed forex account type uses the firm's own proprietary trading systems. However, it is important to note that there is no such thing as the "holy grail" of trading systems. If a system is a perfect money maker, the seller will not want to share it. This is why big financial firms keep their "black box" trading programs under lock and key.
For more, see our Forex Market Tutorial.
Learn how sector rotation and clever options strategies, such as the long straddle, help investors profit from the cyclical ...
Learn about the option Greek vega, credit spreads and how vega affects the values of option credit spreads when volatility ...
Learn how shrewd investors employ the covered call options strategy to capitalize on the banking sector's reputation for ...
Learn how the covered call strategy works well with the pharmaceuticals segment of the drugs sector and how the long straddle ...
A financial instrument whose value is based on the value of another ...
Catastrophe equity puts are used to ensure that insurance companies ...
Open trade equity (OTE) is the equity in an open futures contract.
A category of spread betting that involves taking a bet on the ...
A company that owns or controls two or more banks. Mutlibank ...
A type of strategy regarding a put option, which is a contract ...