Getting Started in Currency Trading, + Companion Website: Winning in Today's Market, 4th Edition

Chapter 25

Managed FOREX

Introduction

You may have decided, or will eventually decide, you like the idea of trading FOREX as a complement to your total investment portfolio—but just do not want to do it yourself. The reasons could be many: not enough time, not the right skill set, not to your personal disposition, or too long a learning curve.

If so, the solution may be hiring a professional FOREX money manager. Money managers have long been in equities as SEC-registered investment advisors. In commodity futures, managers are registered as a CTA (commodity trading advisor) if they control individual accounts, or CPO (commodity pool operator) if they control a pooled interest or fund. In the United States, a currency manager now comes under the auspices of the CFTC (Commodity Futures Trading Commission) and the NFA (National Futures Association). They are registered and regulated as CTAs and CPOs at this time.

The matrix of selecting a FOREX money manager is substantial. There are many managers now trading, numerous trading methods used, and alternative investable entities to select besides an individual account. This chapter will explore the managed FOREX landscape and provide you the information and tools to make an intelligent and safe decision about hiring a professional currency trader.

Tip: Remember that the FOREX manager introduces at least one more link in the chain from you to the FOREX broker. If the manager uses a pooled or funded entity, that will add at least one more. ...