Trust management on Forex, features of use

Trading on the forex currency exchange seems simple only at first glance; in order to become a successful trader, you need to take more than one training course and gain experience in practical trading. Not all investors are up to this task; many novice traders lose quite large sums of money in the first days of work.

You can protect yourself from risk by entrusting your money to a professional trader, who is a representative of a brokerage company. This choice of investing funds is called trust management.

Forex trust management is the transfer of the rights to manage your own capital to one of the representatives of the brokerage company or simply to a professional trader. The first option is more preferable, since in this case the broker himself acts as a guarantor of the safety of your funds.

Practical points.

In order to make this type of investment, you should contact one of the brokerage companies that provides a similar service.

The second step will be the selection of a managing trader, that is, a person to whom you entrust your money; usually detailed reports on the work of all managers are published on company websites. Thanks to the presented statistics, you can get an idea of ​​the average level of profitability over the past months.

After the choice is made, you will have to sign a service agreement and deposit money. At the same time, be careful, since the contract is the document confirming your cooperation with this company.

Your profit will depend on the success of the selected trader; at the end of the month you will receive part of the profit he earned, usually it is 50%. For example, the profit on your account was $300, which means you will receive only $150.

Advantages and disadvantages of trust management.

Advantages.

1. High profitability - obtaining profitability that far exceeds the interest on a deposit placed in a bank; on average, when using trust management, the profit ranges from 10 to 20 percent per month or 120-240 percent per annum. Which is several times higher than investments in other areas of business.

2. Passive investing - unlike trading Forex on your own, you do not need to spend time studying a lot of financial information and constantly monitoring the news. Your responsibilities include only withdrawing the profit received to your own account.

Flaws.

1. High risk of losses , even the most successful trader can make mistakes that lead to a drawdown of the deposit, as a result you can lose part of your funds. To minimize the risk of loss, you can insure your deposit, but such a step will significantly reduce the profitability of your investment.

2. Availability of funds - in order to receive your money, you will need to spend from several hours to several days, because they can be involved in maintaining an open position, the urgent closure of which will lead to losses. Therefore, it is not always possible to withdraw funds instantly, as is done when closing a bank deposit.

One of the options for trust management is trading using PAMM accounts; in this case, you do not transfer funds to the manager, but provide him with access to your account. At the same time, you have complete control over it and can close all orders and withdraw your funds at any time.

A similar service can be obtained from InstaForex or Alpari , interesting investment programs are also available from the broker AForex .