Managed Trading Account
Managed trading accounts are where professional traders, brokers or money managers take responsibility to trade on their clients’ behalf. These accounts are somehow of the same kind of traditional investment accounts of bonds and equities in the way that a financial manager is given the job to handle all the trading logistics.
For some investors, a managed trading account works with a “set it and forget it” formula. Also, it efficiently goes alongside an active management technique that generally takes several hours of a trading day.
In addition, managed trading accounts are also a good option for those who want to take advantage of a professional or experienced trader to manage the investment they have put in the market. Other benefits include:
Experts Support
A managed trading account, let’s suppose, a forex managed account can be handy to acquire best results since it also offers professional support to both new and experienced traders.
Likewise, it enables you to invest a part of your investment on a managed trading account and rest assured that there is an expert who is managing your capital at all the time without needing your presence on the spot. This further means you can also diversify your investment portfolio in a more effective way.
Risk Management and Yielding Profits
Another benefit of a managed trading account is that it combines high risks with high return objectives through professionals’ assistance. Also, there is a higher potential to make money on both the events of rising and falling the markets.
24-Hours Trading Opportunity
Some trading markets, such as, forex trading market is open at all the time and usually depends on available liquidity. This means you can take part in trading anytime you want to and from any part of the world.
A trading account provides you with an excellent opportunity to participate in your favorite product trading round the clock even if you cannot keep an eye on your trading activities at all the time.
Real-time Management
With a diversified managed trading account, you can certainly gain many benefits of trading in the market, whether its forex market or cryptocurrency. Since managed trading accounts are supervised in real time, they allow you to get actual market reports from professional experts and managers.
Easy Withdrawal
This is certainly an important feature of a managed trading account. Like depositing money in the account, you can withdraw your money at any time. This makes a managed trading account truly convenient option for any investor.
Diversify Your Portfolio
In order to diversify your trading portfolio, it is crucial to maximize profit rate over a long period of time. Many experts agree that a board and balanced portfolio with lots of different asset categories is the key to obtain the most effective profits on your investment. However, the above scenario is the best possible with a flawless addition of a managed trading account to your trading portfolio.
Accessibility
A managed trading account is equally accessible to both the manager and the client in the capacity of opening and closing position. This means a managed trading account lets a manager trade for you or alongside you.
While it may look like an excellent approach to have an expert trading for you, it is important to carefully look at your preferences before you give someone access to your capital. This also includes determining how much time you can easily commit to the trading process.
Pitfalls of Managed Trading Accounts
In addition to several advantages of manage trading accounts, there are some potential pitfalls of these accounts too.
- Scam
The most important disadvantage of a managed trading account is that you could lose all of your investment if the account is managed by deceitful money managers.
There are many people who use the internet to set up a website and offer their services. Therefore, it is critically important for a potential trader to do their research before putting their money for the investment.
This includes researching the manager you are considering to work with, reviewing their performance statements, and finding out where they are located. Moreover, you must also verify if the manager is genuine and not a scam.
- Lack of Confidence
Likewise, using a managed trading account does not provide you an opportunity to learn trading with confidence individually. While it is important to make fewer mistakes for short-term success, everyone can learn from mistakes and work more efficiently.
While you may have enough experience, an emotional bias is likely to cripple you into no executing position. You may find out yourself in fear or lack confidence in your abilities.
A professional financial manager usually does not have such biases and is sure for their success. With such confidence, they remain focused and come up with an excellent capability to make good trading decisions within your boundaries.
- Uncertainty
Most brokers or managers possess their individual performance records consisting of their managed account representatives. This can be handy for potential clients to illustrate if the manager suits best to their outlook and has the experience of making good decisions.
This approach, however, one drawback that the past performance does not necessarily indicate future results. Instead, it may be based on circumstances or a display of the last couple of years of your career in the market which should not be difficult to navigate
Trading markets, such as, forex trading market, commodities trading market or cryptocurrency trading markets are some of the largest trading markets on the globe. Many of these continue trading 24 hours a days.
Generally, a managed trading account tends to be the right choice for those traders who do not have sufficient time to follow the trading market round the clock but still want to make some money from trading.
On the whole, managed trading accounts are the best combination of professional assistance and a non-stop trading exposure without having the trader’s presence on the spot. Also, this is an excellent option to get additional support and security for all of the investments you make in your trading career.