If you want to make money on the forex market, but do not actually want to trade you should consider a managed trading account. These trading accounts are ideal not only for people who do not actively want to trade, bur people who do not have the time to trade as well. When you look at these accounts you have to consider their costs. When you consider the costs you have to determine whether or not the costs are worth what you are getting.
What is a Managed Forex Trading Account?
Before you can determine if this account time is worth the costs you have to know what a managed account is. As the name would suggest the account is one that has a manager. The manager of your account is the person who will do all the analysis and trading for the account. All you have to do is provide the capital investment. This hands free way of making money on the forex market appeals to a number of different people. Of course, you have to verify that the service you are using for your account is not a scam and that you will get the money your account makes.
The Costs of a Managed Account
When you consider if something is worth the costs you need to know what the costs are. With a managed account there are two main costs that you have to consider. The first cost is the capital deposit you need to make. The second is the commission you will have to pay for the account.
The initial deposit you have to make will vary depending on the type of managed account you are getting. If you are getting an individual account then you may have to deposit anywhere from $5000 to $10000 to open the account. If you are looking at a pooled account then you will have to deposit a minimum of $1000 with most companies.
The company offering these accounts are not like forex brokers who make their money from the trade spread. This means that you have to wither pay a commission on the trades and profit or pay a monthly amount to keep the account.
Are They Worth It?
Now that you know the two primary costs you have to consider if what you are getting from the account is worth the cost. If you are unable to trade on the market at all there are some cheaper alternatives that you can look at. Automated systems can trade for or you can look into social trading. These are the two most commonly used alternatives for people who look at managed accounts because they do not have the time to trade.
If you are looking at a managed account solely for the gains you can get you need to consider what gains you are actually getting. No managed account will ever be able to offer you guaranteed returns because of the unpredictable nature of the forex market. The type of account you get also limits the returns you actually receive. With a pooled account you have to share your profits with all the other investors for the account.