The Ideal Managed Forex Investor
After reading through a few managed forex articles, you may be asking yourself, “This is pretty exciting, but is a managed forex account right for me”? Well, as we’ll explain, the answer depends completely on the investor.
As we all know, there’s not a single thing that exists in the world which can meet the needs of everyone. Though it goes without saying, this is also true in alternative investments. Despite what many biased traders may say, diversification is what leads to success, not a “one size fits all approach”. The fact is, people have different investment goals, preferences and risk tolerances. To be successful, they must address all of these before moving forward.
To help you make decisions that match your FX goals, we’ll explain the top characteristics of managed forex investors. Keep in mind, all of these qualities MUST be present for those considering FX investments.
To get started, let’s take a look below…
Top Qualities of a Managed Forex Investor
1. High Net Worth: Most investors who open managed forex accounts have a net worth exceeding 1M. Though forex investments do start as low as 10K, most are unlicensed with high risk. In our opinion, you can test the waters with small capital, but your best decision would be to find a licensed managed forex trader. In most cases, this would require an investment of 50k or more. The fact is, since smaller FX accounts are harder to manage, they’re also higher in risk. If you’re a smart forex investor, you’ll invest 100k+. Remember, the more capital you have to invest, the more opportunity you have to diversify.
2. Strong Risk Tolerance: If you’re considering managed forex, you must understand there will be positive and negative months. For example, if you invested with a good forex trader, yields could look like this over six months: 12%, 5%, -9%, 22%, -1%, 11%. Even though you had two negative months, you’re still up over 50%. In addition, you can benefit from compounding every time you profit. Though this is a calm yield fluctuation, forex trading can be far more volatile. Before investing, always assess the trader’s strategy and decide if the risk is worth the prospective reward.
3. Understands Forex Trading: You don’t have to be a trader to read about managed forex. The truth is, you’ll only benefit from learning. The difference between FX investors with moderate success and those who become rich is one thing, education. If you understand forex strategies, and know how to implement them, you have a far better chance of finding the right trader. If you’re really serious about managed forex, take a few hours a week and study the topic. As you know, our Forex Investment Category has everything you need, so the question is, what you are waiting for? Get educated on managed forex now!
4. Possesses Diligence and Realism: If you’re pursuing managed forex investments for the high yields, then welcome to the club. Though we all enjoy the opportunity for profit, you must remember, safety’s always first!!! If you are a beginner in forex, invest a small amount of capital with a licensed trader and gain a stomach for it. Once you get comfortable and gain more experience, you can start to look into forex investments with higher yields. Though it may seem exciting to chase high yields, remember, slow and steady wins the race!
5. Must be Calm and Collected: If you’re the type of investor that likes to check their balance EVERY morning, managed forex may NOT be right for you. Even if you understand the natural fluctuations in account value, you’ll drive yourself crazy. Instead, just relax and enjoy life. If you’re with the right trader, you only need to check the balance once a week, month or quarter. In short, your level of attention should depend upon the risk of the strategy. Don’t be overly comfortable, but also, don’t get too paranoid!
If you are someone with most of these qualities, managed forex may be a good market to explore. In fact, if you find the right trader, forex can be the key to meeting your financial goals.
In contrast, if you do not possess these qualities, managed forex may not be the best for you. If you lack the appropriate characteristics, and still choose to invest in forex, good luck!
Though managed forex can be great, like any alternative investment, it’s best for those who meet the requirements. Given the failures of many new forex traders, these requirements are critical to your safety and success. Even though managed forex markets do have the highest yields, remember, it also has the biggest losses!
To briefly summarize, if you have the money and interest, managed forex could be a great fit for you! If not, then revisit the opportunity when you do. Don’t push the issue! Wait until managed forex feels right, educate yourself, and move forward with caution…
InsideTrade LLC Staff
Phone: (949) 444-2111