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A managed Forex account is a type of account in which a professional money manager trades a client account for a fee. By this way, investors can save precious time, earn stable returns, and reduce their overall portfolio risk.
Investors can choose between various types of managed accounts, but we focus on the PAMM, LAMM, and MAM accounts. The reason is that these three account types offer extended flexibility, low entrance requirements, and anti-fraud protection. PAMM investors are dealing directly with the Forex broker of their choice and money managers have no access to the investor’s capital.
What is Actually a Managed Forex Account?
A managed Forex account is a segregated trading account owned by each investor but managed by a professional money manager. A managed account should offer safety, transparency, flexibility and full control.
General Types of Managed Accounts
There are five general types of managed accounts: individual, pooled, PAMM, LAMM, and MAM.
(a) Individual Accounts
This is a classic account type and refers to an individual account where a professional money manager trades on the behalf of an investor. Usually, there are minimum deposit requirements that exceed $10K. The management fees are customizable, but as in any other managed account type, the fees are based on the performance.
Needs a lot of caution
High deposit requirements
(b) Pooled Accounts
The pooled account type refers to an account type where many investors join their capital in a single fund and share fees, profits, and losses. The main advantage of a pooled account compared to an individual account is the lower deposit requirements. The deposit requirements start as low as $2K. The main disadvantage of a pooled account is the minimum period required before investors can withdraw their capital without a penalty.
Lower deposit requirements
Shared expenses and standard fees
Minimum period before investors can withdraw their capital
Penalties for early exit (withdrawal)
Bitcoin Forex Brokers
Launched in 2008, Bitcoin is the first cryptocurrency in the world. The Bitcoin market has no central bank intervention and there are no interbank dealers to control the order flows. Bitcoin is a very volatile digital currency and there are many ways to speculate on the extreme Bitcoin’s price swings which are driven mainly by the news and the prevailing investor’s sentiment.
Trading Bitcoins with CFDs
Since 2013, Bitcoin traders can take advantage of a contract for difference (CFD) to trade Bitcoin. A contract for difference (CFD) is a derivative product that offers easy speculation on the rising or falling prices of any financial market. Actually, a CFD contract ‘mirrors’ the price movements of any financial instrument without owning it.
Advantages of Trading Bitcoins with CFDs
Disadvantages of Trading Bitcoins with CFDs
Review Bitcoin Forex Brokers
These are some popular choices for trading Bitcoin CFDs.