Are Fx Managed Funds an Easy Way to Riches or to the Poorhouse?

There sure are a lot of forex managed funds showing up all over the internet these days. With all the economic depression and the stock exchange tanking, it’s no wonder that many people are looking for ways to earn some extra money. Most new forex traders think that currency trading is easy and they will retire in no time at all. The truth is that only 5 to 10% of new forex traders will last half a year without blowing out their account.

Forex managed funds are a viable option for both the new and experienced trader alike. Managed forex accounts are run by professional, profitable forex traders and they trade your account for you for a share of the profits. Some managed funds use robots or expert advisors (EAs) to trade the investor’s account. This eliminates any emotion or fatigue affecting the trading results. These EAs are designed by expert forex traders and most aren’t available for purchase to the retail trader since they are either too expensive or simply not for sale at any price.

There are a lot of forex managed fund sites that claim that you can get rich quickly just by allowing them to trade your account for you. That would be nice but it is certainly not always the case. Complete transparency is vital for you to make an informed decision about where to invest your money. Most good sites will actually show the current results for a real money (not demo) account. This is one of the best ways to determine if the results and drawdown are to your liking. If you can’t find performance results on the website, then maybe they are not all that great.

When looking at performance make sure you pay particular attention to maximum drawdown as a lot of forex managed fund sites show great results but you need to be able to stomach 50% drawdowns to achieve them. Most people simply cannot handle large drawdowns. They like to think they can; until it really happens. So, decide ahead of time just how much drawdown that you could handle without wrecking your whole day…or week in some cases.