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Choosing A Trustworthy Forex Account Manager
If you do not have the time to learn how to trade forex you have the possibility of managed forex accounts. However, the first downside is that there are a lot of people out there that will try to scam you. In order to avoid them, you first need to learn to differentiate between a normal managed forex account and a pooled account. In the first one, the account will be in your name and the money will go from you to the forex broker. In the second type of account, you will have to send the money to the account manager who is supposed to pool your money from various clients into a trading account that he controls.
Despite the fact that there are legitimate pooled accounts out there, these are still considerably more susceptible to fraud. Why? Because basically anyone that has a computer can easily create fake account statements. With such an account, you can never be sure where your money actually is.
If you have a friend or you know someone that has been receiving checks for 10% monthly return on their investment for more than 12 months, it means that most likely he is in the middle of a Ponzi scheme which works ...
... like this:
That account manager will get only one person to invest, regardless of the amount of money. The returns of anywhere from just a few percent each month to even 30% monthly are guaranteed. The good part is that none of the money is actually invested in the forex market. If that account manager promises 15% each month, the money can be very easily hidden under a mattress and the payments can be maintained for 10 months. Although you might think that this is a rather silly way for the manager to make money, it actually is not. The reason for this is because he will tell his very first victim that by reinvesting half of that 15% the account will grow faster. He then says that if the total amount of money in the account is increased, the return percentage can also be increased.
Due to the reason that this is an attractive deal, or at least it seems that way, many people will start telling their families and friends about it. However, the problem is that if there is a significant drop in the new investment, the entire deal will collapse in a fast manner, that is if the scammers do not decide to run with the money sooner than that.
For these reasons, you should choose a normal managed account which will keep your money in your personal forex account with a forex broker. You will sign a LPOA (Limited Power of Attorney) which grants the account manager the right to trade the account and make sure that the contract specifies how the account managers gets paid. By choosing this method, you will be capable of logging in and see for yourself which trades are being placed and your real-time balance.
Of course, except fraud, incompetence can erase the balance of the forex account just as fast. You should fully understand the concept of risk management before signing the aforementioned LPOA. Don’t forget to talk to your account manager about how he will control risk.
All in all, the types of frauds found in the forex managed accounts are simply repackaged versions of the ones in the stock market as well as other trading markets. As a consequence, you need to be very careful and pay attention to anything that might sound suspicious as there is a lot of money involved and you can lose your life’s investment in a matter of seconds.
About Author: Access reliable and high quality Forex managed accounts services by visiting us at www.forexaccountmanagerservices.com .
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