Managed Forex Accounts

PAMM accounts

Unlike a regular forex trading account, where you make all trading decisions and actively buy and sell currency pairs, a managed forex account consists of a trading account where a trader or fund manager trades on your behalf.

This type of account entails higher costs and fees than a standard forex trading account and requires a higher minimum deposit in most cases.

A fund manager treats the logistics of the market very similarly in a forex managed account compared to traditional stock or bond investment accounts. Nevertheless, the account remains entirely under your control, and the only thing the manager can do with your account is carry out trades; the manager cannot make deposits or withdraw funds from the account. Remember that making a profit on a managed account is not guaranteed due to the volatility of the forex market, so all managed accounts should feature a warning that you may lose money.

Most clients give their fund manager full control of trades made on their managed account, although you can often tell the fund manager of the strategies and trading signals you want them to consider when trading on your behalf. This allows you to avoid the emotions and psychological issues that come with winning and losing trades.

Remember that not all forex brokers are created equal, so you should carefully consider your needs in relation to a broker's characteristics before opening an account. Also, if you want to outsource the management of your trading account to someone else, make sure that they have the right training and infrastructure, as well as respectable experience as a trader.

Keep in mind that once you have opened a managed account, account managers usually have duration and minimum deposit requirements and sometimes charge penalties for withdrawing funds early. The minimum deposits for these accounts can also be considerably higher than for a standard forex account.

Is a forex account managed by professional trader right for you?

How involved would you like to be in the forex market? If you want full personal involvement and complete control over your positions and capital in the currency market, then a managed account may not be for you.

On the other hand, if you prefer that another trader trade on your behalf and risk your money based on their trading methods and/or software, then a managed account may be the right solution. When you open your managed account, the trader you "hire" should examine your profile to determine your level of risk tolerance and take note of any specific strategy instructions that you may have.

Managed forex accounts are perfect for you if...

You're busy and can't keep up with the market

Many people simply don't have the time, experience, or patience to trade the forex market. Paying attention is a full-time commitment, but work or family obligations can distract you. A managed forex account gives you the freedom to pursue other activities that you might not otherwise be able to do.

You prefer to let someone else handle the trading

If you've ever traded the forex, you get a sense of the directional uncertainty most traders suffer from and the noticeable volatility that currency pairs can exhibit. Know your limits if accepting losses is a struggle, and opt for a professional trader instead.

You don't have the psychological makeup of a trader

Some people just don't have the best psychological personality type for trading. For example, if you can never admit you're wrong, holding on to a losing position can wipe out your entire trading account. Another example would be a tendency to over-trade because you find trading exciting. However, over-trading can also have financial, physical and mental consequences. Rather than risk trading yourself, you can find a good account manager.

Forex trading is risky. Test your systems on a demo account! Note: past performance is not neccessarily indicative of future performance.

74% to 89% of individual trading accounts lose money trading CFDs.

The best forex brokers offering managed accounts

To keep your money safe, choose an established broker to open a managed account and look for an individual or group account manager that you feel is qualified.

All of the brokers listed below offer managed accounts (via Copy Trading, PAMM, MAM, social trading).

 Types of accountsMin. depositManagement feesManager renumerationOpen an account
Copy Trading300 €Spread + 0.8 to 1.5 pips (0 pips for AAAFX)0.5 pips per trade or 20% of profitsOpen an account
Copy Trading5 €SpreadFixed monthly commissionOpen an account
PAMM300 €SpreadUp to 35%Open an account
PAMM 1 € SpreadVariable according to the traderOpen an account
Copy Trading 2000 Spread5$ per lotOpen an account