Forex Managed account is a style of forex account and an excellent mode of alternative investments that is designed for investors and traders wanting to have their funds traded and administered by skilled and certified money manager(s).
Independent trading in the foreign exchange market can be an intricate proposition. 95% of traders get defeated and lose funds, 4% earn a livelihood, and a mere 1% amass wealth. Achieving consistent profits month after month is an extremely arduous job and most people never get there. Extensive knowledge is required trading forex and many investors don’t have the time to learn the essentials, do research and develop a true strategy. Incalculable hours are required to be spent tracking currency rate movements, and they may find the process complex and quite demanding.
Hiring a money manager is an excellent way of gaining access to the world’s largest and most liquid market, the ‘Foreign Exchange’ (Forex), for individuals and companies. A proficient certified manager handles your forex account and helps you earn revenue. Hiring a manager for forex investments is a viable way out for investors looking to accomplish diversification in their portfolio, and benefitting from their knowledge and experience. Managed Forex accounts is also suggested for the investors or traders who do not have suitable experience, or else for some reason are short of confidence to place their own trades.
Diversification improves portfolio returns and lessens overall volatility, and Forex Managed Accounts is an excellent avenue to alternative investments. The world’s largest and most liquid financial market, Foreign Exchange, is very strong in mechanics, has controlled movements, and free from manipulation.
Investment in foreign exchange is noticeably an easier option when compared to other instruments. Other instruments having similar or even lower returns require a larger initial principal than what you would typically require with a managed account.
Forex does have the potential to post massive profit than any other asset class. It’s largely on account of the leverage that they have access to when compared to classical avenues of investment such as stocks. The gains achieved every month outperform what most conventional investments post every year. The resulting compounding effect over time is even more astounding.
Compared with investments in a stock market, the currency market is free from bear markets! Profits can be made in any market direction whether bullish or bearish and even sideways. There are trading opportunities and the potential to make money.
Opting for a Managed Forex Accounts service is perhaps the best and easiest way to access the Forex markets with professional managers. Unlike mutual funds or hedge funds which commingle your funds with other investors, a managed account is in your name and all or part of your funds can be redeemed within one day.
Forex Managed Accounts are completely segregated accounts independently owned by each investor at a reputed and regulated brokerage firm, but traded by a certified money manager on their behalf via Limited Power of Attorney agreement (LPOA). The document is an agreement which enables the manager “trade only” rights—to execute trades and manage the account. The broker allocates the profit as agreed on the basis of LPOA. All deposits and withdrawals are made by the investor. This arrangement results in maximum protection, control, and transparency.
Managed forex accounts presents complete transparency compared to an orthodox fund where your money is held by the fund house placing you at risk. The investor retains complete access and be in command of his account at all times. Investors can view their account 24/7 via read-only password for complete details associated with trading, though will not be able trade on their own unless LPOA is revoked. Investors have the authority to invalidate the LPOA agreement anytime if unsatisfied with the manager’s performance and opt out.
Management and Returns
We believe managers’ and clients’ interests must be aligned. If you don’t earn money – we don’t! The manager only gets remunerated when they yield positive returns. The management does not charge any kind of fee but only an incentive fee based on high-water mark (HWM) ensuring righteousness for the investor at all times.
High-Water Mark is the highest peak in value that a fund has reached. Its implementation ensures that the manager does not get paid for poor performance and receives strictly a performance-based fee. If there is a negative return for the month, it is carried forward and must first be recouped before performance fees can again be earned. So if the manager loses money on an account, he or she must get the fund above the high-water mark before receiving performance fee [assuming no intermittent withdrawals].
Let us look at an example:
[Note: All numbers presented below in this example are arbitrary and for illustration purposes only. They do not reflect any trading performance].
Jan 01, 2012: Client’s Investment = $50,000
Jan 31, 2012: Investment increases to $55,000 [ Profit: $5,000]
Performance Fee deducted: $1,500 (30% of $5,000)
Closing balance: $53,500
Feb 29, 2012 Investment decreases to $52,000 [Loss: $1,500]
Performance Fee deducted: $0
Closing balance: $52,000
Mar 31, 2012: Investment increases to $53,250 [Profit: $1,250]
Performance Fee deducted: $0
Closing balance: $53,250
Note: No Performance Fee is charged because
The ‘High Watermark’ of $53,500 has not been reached.
Apr 30, 2012: Investment increases to $60,500 [Profit: $7,250]
Performance Fee deducted: $2,100 (30% of $7,000)
Closing balance: $58,400
Fee charged on the profit in excess of ‘High Watermark’.
Also, watermark is now raised to $58,400.
SomaSys Managed Forex Accounts service offers low-risk high-return forex investing, guided by professional management. The key objective of SomaSys is to maximize capital growth whilst managing risks. We consider Risk management as central to our approach and success.
We only trade with ECN Brokers avoiding the risk of Market Makers brokers. ECN brokers are stable and more reliable. We trade high probability scalping strategies which necessitates fast order execution in the markets, and the ECN broker provides ultimate trading experience and environment.
Our broker, Dukascopy Bank SA, offers a unique feature to limit the possible losses on your account through its "Stop-Loss" functionality. Should your account reach the Stop-Loss level set by you, the trading would be instantly deactivated and all open positions would be closed so as to protect your remaining capital against further losses. It is up to the investor’s risk profile as how much drawdown they can handle.
Our clients are the sole reason for our existence. They choose to work with us because they trust us to be transparent and deliver the finest execution with the highest ethical standards. We are thorough professionals and have years of experience facilitating us to bring superior opportunities to our clients.
Key Features and Benefits of SomaSys Forex Managed Account:
No spread mark-ups on quotes.
Manages funds through ECN Brokers.
One of the lowest drawdown in the industry.
Accounts administered by professional and certified managers.
Backed by more than 10 years experience in the financial arena.
Stringent money management (Average Risk <1% Per Trade) 1>
We do not take trades around and during news announcements.
Incentive Fee based on High-Water Mark convention.
Exclusive Capital Protection through its "Stop-Loss" functionality*
Accounts held at reputable and regulated brokerage house.
Clients’ funds are not placed in pooled account; kept and traded separately.
Investors open account in their name; have entire access and control.
Investors fund their accounts directly; no restrictions on withdrawals.
Accounts can be monitored 24/7 tracking equity and activity.
Management has no access to client funds.
Immediate Trading Deactivation**
*Please speak to us for setting optimal level on your corpus. We will guide you based on your needs.
**Closing or taking a substantial amount out of your account without notification to the account manager will affect your earning performance, or potentially disrupt a trade in progress.
Terms of offering
Minimum Investment: 10,000 USD or equivalent
Upfront/Setup Fee: 0%
Management Fee: 0%
Incentive Fee: 30%
No lock-in Period
Our Managed Accounts are offered through Dukascopy Bank SA and have established managed account trading agreements with the house.
If you should have any query or need assistance, please contact us. We will be glad to answer any question you may have.