mANAGED FOREX ACCOUNTS
MANAGED FOREX ACCOUNTS
Managed Forex accounts are an investment opportunity for those who want the potential of returns from leveraged forex trading, are willing to take serious risks, and want to have professionals do the work of trading and selection. It consists of putting money in a Forex account and having a professional trade that money in the Forex markets.
A managed forex account is a trading account where a professional forex trader (money manager) manages the trading on the clients’ behalf and charge a performance fee for the service. Managed Forex Accounts are fully segregated accounts individually owned by each investor at a brokerage firm. These forex trading accounts are also called sub or slave accounts and the money manager trades from a master account at the same brokerage firm
UNDERSTANDING MANAGED FOREX ACCOUNTS
Managed forex accounts offer exposure to an asset class much different than stocks or bonds. Unlike these equities which deliver returns in the form of share growth, interest payments or dividends, forex trades gain in value as the value of one currency will rise or fall in relation to another.
Those who are not experts in foreign currencies but still want exposure to the market and another asset class, may consider a managed Forex account. Using a managed account, they can take advantage of the expertise of an experienced and proven Forex trader. The downside to this approach is that the best managers typically charge high-performance fees of between 20% and 30% of a trade’s earnings.
Brilliant plans executed with expertise
HOW CCL TRADERS PAMM/MAM WORKS
If a PAMM / MAM account has 3 clients with various deposits as follow, which in total the amount is US$ 100,000.
Investor A – US$ 15,000 (15%)
Investor B – US$ 50,000 (50%)
Investor C – US$ 35,000 (35%)
If the portfolio managers generate profits of US$ 12,500 in the PAMM / MAM account, the profits will be divided among the investors according to the percentage above. CCL Traders portfolio managers charge performance fee of 25% of the total profits of US$ 12,500. The portfolio managers shall be entitled for US$ 3,125 and the balance of US$ 9,375 shall be divided among the investors.
Investor A – US$ 1,406.25 profit (15% of US$ 9,375)
Investor B – US$ 4,687.5 profit (50% ofUS$ 9,375)
Investor C – US$ 3,281.25 profit (35% ofUS$ 9,375)
The following chart shows the profit and loss allocated proportionally to the participating investors and performance fee to portfolio managers in the PAMM / MAM account.