Forex Account Management: How Fund Management Works

Forex account management has become one of the common practices in forex trading. It is no news that forex trading in general entails some levels of risks, especially given the technicalities associated with navigating the forex market.

The forex market, like some people would describe it can be very brutal, and seemingly harsh to people who lack the needed know-how and level of commitment required to make the most out of situations in the market. Does this mean that people don’t succeed in forex? Or to put it in a better way, what options are available to help people succeed in forex trading, while reducing the associated risks to the barest minimal? Well, that’s where forex account management comes to the picture.

This leads to the next question; what is meant by forex account management? What does it entail? How does fund management work?  This and lots more is what this article offers. Just stay with me and follow through.

What is Forex Account Management?

This refers to the professional service of managing and trading forex accounts on behalf of clients. Let me paint a scenario for better understanding.

Imagine an individual who has a case before a court of law. the individual could simply employ the service of a lawyer to assist on the case. The lawyer is well grounded and knowledgeable with regards to matters of litigations or any other issue pertaining to law and the court. The individual may have little to no such knowledge. But by engaging the service of the lawyer, in his case, some level of confidence is assured knowing that the case would be given professional attention.

Now let’s get back to the subject in hand –forex account management. Just like the individual who employed the service of a lawyer who is a professional with regards to legal matters, an individual can equally employ the service of a professional forex trader to help manage and trade  his/her forex account in order to better optimize the forex market.

in this situation, a professional forex trader manages a client’s account by  making trades and transactions on behalf of the client for a fee. Forex account management involves forex risks assessments, strategic funds allocation as well as the implementation of forex trading strategies in the client’s account in order to achieve goals related to forex trading. So, investors who lack the needed expertise in forex trading but would want to benefit from the windfall in the forex market may consider this option.

How Fund Management Works

 As has already been established, forex account management provides an investment opportunity for those who want to leverage the potentials of forex trading by engaging the services of professionals in the forex environment to help manage their accounts. So, how does fund management work? What are the processes involved in forex account management? The process may include, but not limited to the following:

•  Setting investment goals
•  Risk assessment
•  Asset allocation
•  Monitoring and adjustment strategies

Setting clear investment goals

The first step in funds management would be the establishment or setting of clear investment and trading goals. For this, the forex account manager and client would need to have a clear and mutual understanding so as to establish clear investment objectives which may include income generation, capital growth and even capital preservation among others. In setting clear investment goals, due attention would have to be given to issues relating to profit targets, overall trading strategy, determination of risk tolerance among others. These must be clearly spelt out and agreed upon by both parties involved.   

Risk assessment

Another key aspect of forex account management revolves around proper assessment as well as management of risks. It is a clearly established fact that the forex market is associated with various risks. Therefore, it’s important to be properly assess these risks so as to efficiently manage them. Consequently, forex account management is considered a viable option for investors. This is because a professional forex account manager, with his understanding of potential risks would be better able to navigate through in order to protect the client’s capital, and also ensure sustainable returns while avoiding losses. With regards to funds management, risk assessment would involve calculating an appropriate position size which is based on the size of the trading account and also the level of risk one is willing to bear on each trade.

Asset allocation

Asset allocation in forex account management would entail strategically allocating funds across different currency pairs based on client’s preferences and prevalent market conditions. Also, diversification helps with spreading funds across different currency pairs or trading strategies in order to reduce the impact of any single trade on a given account. This further helps to minimize risks and also improve the consistency of trading results.

Monitoring and adjustment strategies

In order to achieve optimal results with regards to forex account management, it is very crucial to constantly monitor market trends and market performance so as to make very timely decisions and adjustments to trading strategies. This is continuous process, requiring careful observation and attention of the market environment. Regular review of trading performance helps to assess risk exposures so as to make necessary adjustments so as to adapt to dynamic market conditions.  

Other key strategies relating to fund management include stop loss, risk-reward ratio and position sizing  

Benefits of Forex Account Management

Beyond reasonable doubts, there are numerous benefits associated with forex account management. Some of these benefits include the following:

1. It offers an opportunity for clients to leverage the expertise of professional forex account managers. This makes their account more efficient.
2. Delegating trading responsibilities to professional account managers helps client save time efforts.

   3. It also helps to reduce the high risks associated with the forex market for clients who employ             the service of forex account managers.

Frequently Asked Questions

Is forex account management legit?

• While it can be prone to frauds, there are legitimate forex account management services available.

 Best forex account management services.

• Some of the reportedly best managed forex  accounts include IC Market, FX Pro, AVA Trade, FP Market, etc.

Is forex account management free?

• forex account managers charge a fee for the services they offer. That is to say, investors who want their forex account managed pay for this service.