FOREX INVESTMENTS

Have you heard about Forex, but don’t understand the risks and rewards of investing? If so, click here to learn more about the fastest growing market in the world.

HEDGE FUNDS

Did you ever wonder what makes Hedge Funds so successful? If so, click here to learn the real story about the hedge fund market, as well as the benefits and risks to hedge fund investing.

MANAGED FUTURES

Have you heard that Managed Futures Trading is rare and quite risky? Well, click here to learn the facts about one of the most profitable investment markets in the world.

PRIVATE EQUITY

Are you interested in learning more about Private Equity or Venture Capital investments? If so, click here to get more information on the market that fuels wall street.

PRIVATE PLACEMENT

Are you interested in Private Placement Programs, but don’t know what to believe? If so, click here to start learning fast from someone who has been successful.

Home » FOREX INVESTMENTS

Offshore Managed Forex Investments, Good or Bad?

forex offshore managed fx trader risk investmentsForex trading has become a trend that has taken the alternative investment markets by storm.  At one point 20 years ago, managed forex was a small investment niche which very few succeeded in.  Today, just two decades later, it has become the most widely traded investment market in the world.

Due to the growing access to information, there are now thousands of wealthy investors looking for managed FX. Though this is great for the markets, the problem is, most investors go into managed forex investments before they should, making critical mistakes along the way. In this article, we will cover one of the most common mistakes, investing with a offshore forex trader.

Despite its monumental growth in recent years, forex is still widely unregulated. To add to this problem, most investors don’t know about forex licensing, so they don’t understand what to look for. In addition, most investors have no idea how to evaluate a managed forex investment, whether it’s domestic or offshore. Facts such as these have lead to a market with high demand and plenty undereducated investors.  In response to this ripe environment, private forex traders and offshore FX companies flooded the market to meet the demand, aiming for “HIGH YIELDS”, while claiming “low risk”.  As you’d expect, this recent movement in private forex has lead to stories of great success and immense disaster.

Since many investors have had trouble with offshore forex investments, we’ve provided some key tips to protect you.  Take a look below, and soak up the knowledge!

Tips for Offshore Managed Forex Investments

1.  Be Very Cautious with Private FX Traders:  Private managed forex traders are already risky to invest with, but if they’re also offshore, you have a recipe for disaster. Even if they are not in the USA, ask them for some sort of license or certification in their country.  Remember, all traders must be held accountable in some manner, no matter what the situation.

2.  FX Accounts Must Always be Transparent:  If you are sending money to an offshore forex broker, make sure the account is held ONLY in your name. Also, make sure you have access to your account at all times.  Sending money directly to a “forex trader” will reduce the transparency of the account, and in many cases, you can be scammed out of your investment.

3.  Always Withdraw the Initial Principal:  Once your account doubles, ALWAYS withdraw the amount you initially invested. If everything runs smoothly and the funds return to your account, you have just eliminated your risk, and have likely found a good managed forex investment.

4.  Make Sure there are References:  Though I am not a stickler about references, I feel they are a MUST for any offshore forex investment.  If you’re investing with a offshore forex trader based upon their word, you may just deserve to lose your money.   In all honesty, if the trader is unlicensed, can’t show proof, and resides in another continent, you have very little chance to succeed.

5.  Keep in Touch with Other FX Investors:  If you’re lucky enough to have references, or you know others investing with the same FX trader, keep in touch with them. It is always good to compare notes, and make sure there are no inconsistencies that have popped up.

6. Define Accountability and Contract Obligations:  Before investing with any offshore forex trader, you must always feel comfortable with the contract.  If the contract presented to you is bare, as most are, make sure you can define accountability. Also, make sure there are various obligations the trader must fulfill.   If they aren’t included, this can be accomplished by adding addendums to the contract. By doing so, you may have the opportunity for recourse if something unsavory was to occur.

7. FX Trader Must Guarantee Max Drawdown:  If you’re working with a licensed forex investment, HUGE drawdowns can usually be avoided, but with offshore forex investments this is usually not the case. When you first speak with an offshore forex trader, you should address their stop loss strategy, and ask them to guarantee a max drawdown limit (i.e. Max % of account value at risk).  If they are unwilling to add this agreement to the contract, it may not be a good idea to proceed. Unfortunately, we’ve heard stories from several managed forex investors who were raking in the profit, to see it ALL disappear overnight.

8. Conduct thorough Due Diligence on the FX Trader:  If you are investing with an offshore forex trader, it’s more important than ever to complete a background check. The problem is, if the trader lives in another country, how do you find the proper channels to do so?  In all reality, most of the time you can’t access the information you need on offshore FX traders, which is another reason we feel it’s risky.

9. Never Pay Attention to Hypothetical Track Records:  Offshore managed forex traders are HIGHLY UNLIKELY to have their yields audited by credible third parties.  With this in mind, you should NEVER make decisions based upon their history of yields.  Though the numbers may look great, there is no way to truly know if the yields are real or hypothetical.

10. Never Send the Money Directly to a FX Trader:  There’s rarely a reason to send money directly to forex traders, offshore or not.  Forex investments will always have a clearing house / FX broker which holds the funds of the investors.  Though you CAN lose your account on a bad forex trade, it’s better than having someone run away with your cash.

Just like any other alternative investment, taking the risky route can pay off, but it rarely does.  With offshore managed forex investments, you can easily find the opportunity of a lifetime to see it all implode overnight!  Personally, I don’t like to invest with a forex trader without a track record and licensing history.  In most offshore forex investments, this is exactly what you’re left with.  No matter how good the trader sounds, you should never invest based upon someone’s “word”.

Though this article is merely our opinion, PLEASE be careful when working with offshore managed forex investments. We’ve received plenty of phone calls from investors who got burned in offshore forex, and most never saw it coming.  Since this has become such a consistent story, we felt it was critical to reinforce the seriousness of this issue one final time before ending this article.

If you have any insight or questions, as always, feel free to post below. We truly appreciate any new input, and thank you once again for a few minutes out of your day.

InsideTrade LLC Staff
Phone: (949) 444-2111
Info@InsideTradeLLC.com

18 Comments »

  • Offshore Managed Forex Investments, Good or Bad? | InsideTrade LLC | Investments Forex said:

    [...] Read more: Offshore Managed Forex Investments, Good or Bad? | InsideTrade LLC [...]

  • John Carrol said:

    This is one heck of an article. Good job!

  • realestatexpert said:

    I invested with a company called mexbank offshore and got ripped off after what i thought was a year of profits. Dont be fooled with this type of crap. I wish I found this article sooner.

  • Top 10 Mistakes of Managed Forex Investors | InsideTrade LLC said:

    [...] we do encourage compounding, we also encourage safety. If you are not working with a licensed managed forex investment, it is always best to withdraw your initial investment once the account doubles in value.  This [...]

  • TRADEwhileYOUsleep said:

    Offshore forex is great right now because it is allowing us to keep trading with high leverage since the laws may be changing here soon. I do agree with the article in many points, but I would rather be investing offshore anyday, but I also dont have to worry about fraud since I trade my own money. Overall, good summary to the author

  • managed forex said:

    Forex is a great market to make money,but is not easy so 95% of traders loose so you have to be careful since only few make money.And the best is to use a successful manager to trade your account.

  • The 10 Facts of Alternative Investment Brokerage | InsideTrade LLC said:

    [...] Markets:  If you are wondering which alternative investment may be best to broker, it’s managed FX or futures.  Though there are great opportunities in other markets, if you are working with the [...]

  • uberVU - social comments said:

    Social comments and analytics for this post…

    This post was mentioned on Twitter by mywiseshopping: Offshore Managed Forex Investments, Good or Bad?: Forex trading has become a growing trend that has taken the alternat http://bit.ly/dcPOBU

  • Dan said:

    Would you mind explaining exactly what happened and when you initially invested. I know the Swiss financial institute AMC that MexBank was going through was raided by the police and litigation is moving forward. Loss of funds by investors occurred pre Dec 2008. Do you know about the ACM fraud probe? http://www.swisster.ch/content/acm-answers-back-f

  • bigincomeop.com said:

    Forex Trading Tutorial – The Advantage of Using Forex Tutorial in the Currency Trade…

    ……

  • Robert said:

    Thanks for sharing these thoughts. This has been very helpful to me. Looking forward to read more informative topic.

    Robert

  • On the Square said:

    I am looking for reliable forex trader with platform and good history. I am launching forex fund for RIA and independent BD industry and need trader who will operate off LPOA and has trading program that is tested. I expect 25-50M in AUM in 12 months. I had a trader who showed statements with 20% monthly average and no down months over 2+ years but seemed to good to be true…Another source confirmed performance of a trader w 90%+ ytd and another trader w 60%+ ytd. Please respond and also send email to OntheSquare2010@gmail.com

  • 10 Steps to Open a Managed Forex Account | InsideTrade LLC said:

    [...] Once you’ve completed these basic steps, you should have a far better chance of finding a FX investment that meets your [...]

  • Forex school said:

    There are many source out there. Lots of individual that offer this kind of managed account service. But many are false. it is a pity though.

  • Kim Harron said:

    I got burned with an offshore forex fund, glad to find this though at the top of google so others dont do the same thing…….

  • jason said:

    Yeah for sure, because my friend had lost a ton of capital in a single night. It was a horrible thing to see happen to a friend.

  • Cat said:

    I agree! The man can write!

  • Birute said:

    There is a website http://www.finra.org where you can check on brokers and brokerage firms.

Leave your response!

Add your comment below, or trackback from your own site. You can also subscribe to these comments via RSS.

Be nice. Keep it clean. Stay on topic. No spam.

You can use these tags:
<a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>

This is a Gravatar-enabled weblog. To get your own globally-recognized-avatar, please register at Gravatar.


2 + = three

);