Frequently Asked Questions
1. What is an alternative investment?
An alternative investment is an investment other than conventional investments such as stocks, bonds, mutual funds and real estate. Managed forex accounts is one type of alternative investment. Many alternative investments including managed forex accounts, offer the use of a high degree of leverage, which can produce either significant gains or losses.
2. Are your trading programs suitable for all investors?
No, definitely not! Alternative investment programs, including managed forex programs such as those listed on our site, are speculative in nature. Only true risk capital should be used. Never invest funds that you can not afford to lose. See our Risk Disclosure.
3. These results sound "too good to be true". How can it be proven that the system really works?
We can't really answer that question directly since we are not the traders of these managed accounts. However by investing our own funds with a managed account for a period of time we are able to gain an understanding of the trading strategies and the risk management used. We believe that the managed accounts that passed our test will stand a much better chance of surviving for the long term than the vast majority of managed accounts offered on the internet. In fact, several account managers that looked promising initially, failed our live funded test for one reason or another.
4. I don't know anything about forex. Can I still participate from a managed forex account?
Yes. It is not necessary to be a forex trader yourself to intelligently invest in a managed account. The purpose of Best FX Funds is to help you find qualified professional account managers who will trade your account for you. We encourage you to more fully educate yourself about forex. Our favorite educational site is www.babypips.com.* Especially the pre-school section.*
5. My Investment Advisor recommends diversifying my assets. Do managed forex accounts have a place in a traditional portfolio?
Yes, allocating a percentage of your total assets to an alternative investment, uncorrelated to the stock & bond markets such as managed forex accounts, has historically shown an ability to provide a portfolio with better balance, proper risk management and consistent performance. We suggest that one use several different account managers simultaneously to diversify the portfolio further and get the proper risk management in order to identify trade opportunities. Trade managers work diligently and aim to accurately identify trade opportunities with the market, this reinforcing their strategy.
6. What is an account manager?
An account manager is who we believe to be an experienced professional trader in the foreign exchange currency markets. This person has a track record of results from past trades that they have placed to manage other peoples funds.
7. Where will my managed account be set up to trade?
Your account will be set up at one of many forex brokerages depending on the specific managed forex account you decide to open. To participate in a managed account, you must have an account open at the same broker that the account manager is using. Your account is then linked to the traders account.
8. How are managed accounts traded?
In most cases the trader uses software provided by the brokerage to trade/manage multiple client accounts as one account. The PAMM (Percent Allocation Management Module) distributes gains, losses and fees on an equal percentage basis. In this way all accounts regardless of size obtain the same percentage returns. The LAMM (Lot Allocation Management Module) allows the trader to allocate different trade lots to each account. That way the trader has the flexibility to use different leverage to suit the needs of each client.
9. What kind of volatility do managed forex accounts exhibit?
We strive to offer a full range of managed forex accounts from conservative to aggressive. In general, accounts with higher returns will also have higher volatility and down side risk.
10. Will I be able to access my account?
Yes, you will be provided with read only access to your account either through an online report viewer or the trading platform. You can view the account, including balance and activities, but you will not be able to place any trades.
11. Does the trader have access to my money and why do I need to sign a Limited Power of Attorney (LPOA)?
No, the trader does not have access to your money and cannot transfer, deposit, or withdraw your funds. Your account is set up directly with the brokerage who clears all transactions and handles all transfers, deposits, and withdrawals. It is necessary for you to sign a Limited Power of Attorney (LPOA) to authorize the brokerage to allow the trader to direct the trading of your account.
12. How does the Account Manager get paid?
At the end of the month, the broker will do an accounting process. Typically, the account manager is paid a percentage of the profits, called a performance fee. If there are no profits, he will not be paid that month. Your account has to be brought up to an equity balance higher than the previous months high mark, creating "New" profits by the end of the next month for the trader to be paid. The LPOA will specify the performance fee, which varies for each account manager. Typically, our account managers do not charge other fees like management fees, commissions or pip spread fees.
13. Does Best FX Funds invest their own funds into the managed forex accounts offered?
Yes, the principals of Best FX Funds invest personal funds with all traders offered to our clients. We test them out first before recommending them.
14. Can I trade my IRA account in managed forex accounts?
Yes, if the broker is in the US, it is possible to open a forex account through a trust company. The IRA must be a "Self Directed" IRA through a third party IRA Trust Company like Entrust.
15. What is the minimum I can invest using managed forex accounts?
The minimum depends on which managed forex account you open. Each one has different parameters.
16. Can I withdraw my money and close my account any time I want?
Yes, but the time to fulfill the request varies from brokerage to brokerage. This typically takes one to three days.
17. How do I open my account and get started?
Please email info@bestfxfunds.com for more information and application documents.
Glossary
Resource Links
Forex Education -
Learn the Basics of the Forex Markets
www.babypips.com *
FOREX - Learn the FOREX market alongside professional traders with 20+ years experience.
www.fxpipcapital.com*
Forex Daily News - Get the latest news affecting the currency markets
www.dailyfx.com*
Forex Calendar - News events that effect the Forex market, plus Forums, News and industry expert articles. www.forexfactory.com*
Assurance Trading - Assurancetrading.com will custom build your investment strategy to fit your needs and goals.
www.assurancetrading.com*
Currency Trading - Forex Trading First develops and supports its own Online FX trading platform. The full range of Forex tools enables importers, exporters, and others with Forex exposures, to easily hedge their funds. It eliminates the need to download proprietary software.
www.forextradingfirst.com*
Credit Card Processing - MSG is a lead supplier of credit card processing software for businesses.
www.businesscreditcardprocessing.com/software.html*
Stock Control System - TechnoSource Australia offers stock control system ideal for businesses ranging from small to medium business operations with multiple locations.
www.technosource.com.au*
Toronto Mortgage Broker - If you need a mortgage broker in Toronto, We are here to help you! http://www.getmemortgage.ca*
*The views and opinions represented in the provided website links are not controlled by the referring Broker or the FCM. Further, the referring Broker and FCM are not responsible for their availability, content or delivery of service. For a full list of Resource Links, please visit bestfxfunds.com/resourcelinks