Managed forex accounts are set-up in the name of the investor and managed via a forex broker through signed ‘limited power of attorney’ (LPOA). Investors therefore do not initiate or conclude forex trades. All currency trades are completed via a managed broker account.
The LPOA gives the broker authority to manage funds that investors place within their account, but only the investor has access to their funds in managed forex accounts. The LPOA can be ended at any time, preventing further trades. Typically, investors are able to redeem their funds within a day.
Managed forex accounts have minimum investment limits in the currency of the account’s location. Brokers may offer clients different types of managed forex accounts with various limits and benefits. Authorised brokers usually deduct an agreed profit-share or performance fee from trade yields.
Personalised trading accounts are linked to the broker’s master account, so that when the broker makes trades, they are duplicated in the personalised account. Investors using managed forex accounts do not have to do anything once the accounts are funded, as the personalised accounts are automatically included in the broker’s normal trading cycle. Trades may be professionally managed or automated through online electronic currency trading.
Nowadays, brokers use specialised forex software to manage their accounts and provide client investors with read-only online access to view trade performance, yields, fees and balances. Managed forex accounts may average approximately 50 to 100 trades per month, with account balances compounded daily for investment growth.
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