How to Invest in Forex Without Trading? A Beginner's Guide for Managed Accounts

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eToro - Best Forex broker for 2024 (United States)

eToro is a multi-asset investment platform. The value of your investments may go up or down. Your capital is at risk.

Top Forex Managed Accounts:

  • RoboForex - Best for RAMM accounts

  • FxPro - PAMM accounts with UK regulation

  • IC Markets - Best for PAMM and Copy trading account with low fees

  • InstaForex - PAMM accounts with low minimum investment (from $1)

  • XM - Best platform for MQL5 copy-trading services

The international currency market offers the trader many opportunities for making money. Investing is one of them. You can invest in PAMM/LAMM accounts, in other traders or use transaction copy services. Each of these methods has its advantages and disadvantages, and we will look at them in detail to understand how best to invest in Forex, to ultimately receive a stable income.

  • Can I make money in Forex without trading?

    Yes, you can make money in Forex without actively trading by investing in managed accounts, automated trading services, or copying trades from experienced traders.

  • How do I start investing in Forex?

    To start investing in Forex, you need to open an account with a reputable Forex broker, deposit funds, and start trading. It's important to educate yourself on Forex trading strategies and risk management before investing.

  • What are the best Forex-managed accounts?

    The best Forex-managed accounts depend on your individual investment goals and risk tolerance. It's important to carefully evaluate the performance of the managed accounts and the expertise of the managers before investing.

  • Is $100 enough for Forex?

    Yes, $100 is enough to start investing in Forex with some brokers. However, it's important to note that Forex trading involves risk, and you should only invest what you can afford to lose.

  • Can beginners invest in Forex?

    Yes, beginners can invest in Forex, but it's important to understand that Forex trading involves a high level of risk and requires knowledge of the market and trading strategies. Start with a demo account to practice trading before investing real money.

  • What does Forex investing mean?

    It means that you can invest your money in a PAMM account, copy transactions of successful traders, or use various trust management systems. The common feature for all these methods is that you do not trade on Forex on your own, but professionals do it for you in exchange for a small commission, if successful.

  • Is Forex investing a reliable system?

    The international currency market is a steadily developing system. The reliability of the investment depends on the reliability of your broker and on the success of the PAMM manager or signal provider that you chose.

  • How can risks be minimized when investing?

    At the start, you need to choose the right broker who has a convenient investment program that suits your investment needs. In the future, you can invest not in PAMM portfolios, and in the case of copying transactions, use several signal providers at once.

  • Which is better, PAMM accounts or copying transactions?

    All options for Forex investing can bring good passive income. It is difficult to say which one is better because they conceptually differ in the investment mechanism and each of them can give good results. The investor makes a choice based on personal preferences.

Do you prefer watching videos? Then watch the video summary of this article.

Below you will find all the information.

What is Forex investing?

People decide to invest in the Forex market for various reasons. But perhaps the main reason is that the profit-making capacity in the Forex market can be several times higher than that of classical methods of investing, such as buying real estate or making bank deposits.

Anyone who decides to make money on Forex is deciding: to trade on his own, or place funds under management. When a trader is trading on his own, everything is simple. He is just trying to predict the quotes’ future rates. And when he trusts someone else, then he has become a passive investor.

People who are not interested in the trading process, or who simply cannot succeed in trading for themselves, or who want to receive additional passive income without troubling themselves with the mechanics of self-trading become passive investors. Regardless of the reason to become an investor, to start investing in Forex, you need to take the following steps:

  • study all investment options available in the Forex market

    Study all investment options available in the Forex market — PAMM accounts, trust management, and auto trading. But first, understand the differences between them;

  • Check the list that contains the TOP most reliable Forex brokers that offer the most profitable investment programs;

    TOP most reliable Forex brokers
  • whose programs and conditions are right for you

    Choose a broker whose programs and conditions are right for you;

  • Register with the official site of the broker you select (preferably through the site, so that later you get more income);

    register with the official site
  • deposit into the account and transfer it to the selected investment program
              or selected portfolio on the broker’s website

    Deposit into the account and transfer it to the selected investment program or selected portfolio on the broker’s website.

Choosing the correct broker

Choosing the correct broker is a key step because all financial transactions will be carried out through it. Without a broker, a trader can neither trade in the Forex market nor invest. It is the broker who determines the possibilities and limitations of the investor, the transparency of the process, and additional options for earning bonuses.

How to Make Money in Forex Without Actually Trading?

Most people associate Forex trading with the need to sit in front of a computer screen for hours, making complicated trades in hopes of making money quickly. However, there are ways to invest in Forex without trading- and still make a profit. Let's look at the main types of investments you can make in Forex without ever having to open a trade.

1 Choose the Appropriate Way to Invest in Forex

The three most popular ways are PAMM accounts, copy trading, and Forex asset management.

PAMM Accounts

PAMM accounts (Percentage Allocation Management Module) are popular among Forex investors who want to avoid the pressure of trading currencies themselves. Through PAMM accounts, traders transfer their funds to the management of experienced traders who will make trades on their behalf.Not only do you avoid having to constantly monitor the markets, but you keep access to your money, and you pay the manager only a part of the profit.

Copy Trading

Copy trading essentially means copying trades made by successful traders without transferring funds to management. All signals are automatically copied based on pre-determined settings you set in advance. This method is less risky as you can follow successful traders and mimic their trading strategies without dedicating hours to market research yourself.

8 Best Copy Trading Platforms

Forex Asset Management

Forex asset management is a type of investment service where specialized companies invest the money of clients on their behalf. As a rule, they only offer this service to clients who have signed contracts with them. This type of investment is perfect for those who want to delegate investment decisions to professionals and avoid the risk of losing money in unwise trades.

Forex Affiliate Programs

If you prefer even less involvement, Forex affiliate programs are an easy way to make money without opening trades. You earn a commission on each successful referral by promoting Forex brokers to potential traders. This passive approach can be very lucrative as you can earn money without actively trading yourself.

Forex Trading Robots

Forex trading robots have become increasingly popular as they offer a passive way to profit from Forex trading without the need to dedicate time and effort to developing trading strategies. Forex trading robots analyze the market and execute trades based on certain pre-determined criteria. They can beespecially useful for those with limited trading experience.

2 Choose a Suitable Broker Who Offers Such Services

When searching for a broker, look for one that offers PAMM accounts, copy trading, or Forex asset management. Ensure that they are reputable, licensed, and regulated by a governing body. A good broker should also have a user-friendly platform, reliable customer service, and low commission fees.

3 Top Up Your Account

Once you have found a suitable broker, you will need to top up your account. Each broker has a different minimum deposit, but it is, as a rule, from 100 to 500 dollars. Deposit an amount you're comfortable investing and can afford to lose, as Forex investments carry risk.

4 Select Successful Traders

If you are investing in copy trading or a PAMM account, it is essential to select successful traders. When selecting traders, take the time to measure their performance, as this will help determine their projected success. Look for traders with a low-risk score, high-profit score, and consistent returns over time. Many brokers feature a leaderboard of top-performing traders that you can choose from.

5 Diversify Your Portfolio

Lastly, diversifying your portfolio is crucial to minimize risk. Consider investing in a mix of different traders and assets to create a well-balanced portfolio that can weather any market conditions. Remember not to put all your eggs in one basket and to spread out your investments across different types of investments and managers.

PAMM Investing in Forex

This is a popular option for investing in the Forex market, which does not involve direct participation in trading and is aimed at obtaining passive income. The concept of PAMM comes from the English abbreviation PAMM for Percent Allocation Management Module.

Key features of PAMM accounts:

  • A PAMM account is the combined accounts of investors and a managing trader. That is, you choose an account manager that will trade in the international currency market using both his funds and the funds of his clients.

  • There can be many investors, but sometimes managers set limits on the number of participants. The manager can not interact directly with your account or the amount that you want to invest in his order. The bid amount will be automatically withheld in your account.

  • When he bids he will be risking not only the investors’ money but also his own. That is why investing in PAMM on Forex is reliable, the manager is assumed to be more prudent because he is risking his own money, too.

  • The manager is an experienced Forex player with a high percentage of successful transactions. The manager is selected based on statistics provided by the broker. With this option of Forex investing, the choice of manager naturally impacts the success and level of income of your investments.

There are also LAMM accounts

There are also LAMM accounts. They are less common, but it is worth mentioning them, especially since these two types of accounts differ from one another very little.

The only important difference is that with the LAMM system (Lot Allocation Management Module), the amount of investment is equal to the value of the bid of the managing trader. That is, you risk the same amount as the manager, and you get the same income (less the manager’s commission if the trade was successful).

  • PAMM accounts are a more common type of investment because they give you the possibility to invest any amount in the manager’s bid, not necessarily equal to his bid. If the amount is less, then the profit is logically less as are the risks. In this case, the percentage of profit for each investor is calculated by the system individually following the value of his investment.

  • The most modern type of PAMM accounts, which few brokers use today, are RAMM accounts. They operate like regular PAMM accounts, but investors have the opportunity to choose many parameters, for example, acceptable risks and drawdowns, after which funds are automatically withdrawn from the manager’s order.

Key features of PAMM accounts

For all these types of accounts, there are two investment options. You can invest in a specific account or in a portfolio containing multiple accounts. Let’s consider the advantages and features of each method.

PAMM Accounts Investments

This is a traditional method of Forex investing where you entrust your funds to a professional managing trader. You alone choose the amount, but sometimes the manager can set limits on the minimum and maximum investment amount.

👍 Advantages of PAMM Investing:

The investor (you) chooses the manager and the amount to invest

The manager’s work is transparent

The manager is an experienced professional

The manager also risks his funds

👎 Disadvantages of PAMM Investing:

The investor is not involved in decision making

Even the most experienced traders make bad decisions

If you are a beginner trader, then a more experienced player has a better chance of winning, this is what PAMM investing is based on. However, all traders lose sometimes. Sometimes professionals lose a series of bids in a row, it happens to everyone. Therefore, when investing in Forex in a PAMM account, please remember, you reduce your risks, but you cannot eliminate them.

PAMM Portfolio Investments

PAMM portfolio accounts differ from a standard PAMM account in that funds are invested in the orders of several managers at once, and not just one manager. The opportunity to invest in a PAMM portfolio is a separate service that is not provided by every broker. Check the broker’s website for details or inquire at the Traders Union support service.

👍 Advantages of PAMM portfolio investing:

The main advantages are the same as when investing in a PAMM account

Plus the investor is diversifying his investment risks to the maximum

👎 Disadvantages of PAMM portfolio investing:

To allocate the funds across several portfolios, you need a larger deposit than when investing in a single PAMM account

The main advantage of the PAMM portfolio is that the investor diversifies risks. Therefore, even if one order loses, you can stay in the black because other traders might win. But this is the main disadvantage of such a system, i.e., to successfully reduce risk and level losses, you need to invest in several accounts at once, which requires a more substantial deposit.

Copying Transactions of Successful Traders

This Forex investment option is equally popular with PAMM accounts. An alternative name for the method of transaction copying is auto trading. As in the case of PAMM accounts, everything is simple, but the mechanism itself is substantially different.

Transactions copying method:

  1. You install a special program or use a standard trading platform (it depends on the broker)

  2. The broker offers you signal providers. These are professional traders who are ready to share their orders with you in real-time

  3. You choose the trader you like and copy his transaction onto your trading terminal, that is you duplicate or “copy” his order

  4. The signal providers may let you copy their transactions for free or for a commission of the transaction if it wins

The trader does not act as an investor because all transactions occur within your own account and on your trading terminal. Your money never leaves your control. If you copy a transaction from an experienced and successful trader (statistics are provided by your broker), then the chance of winning is higher than if you would conduct the bid yourself.

Another advantage of auto trading is the opportunity to learn from professionals. Because all the information on the current orders of your signal provider will be available to you. You will be able to calculate his strategy, see how he reacts to certain market changes, and what decisions he makes. This is a unique, invaluable experience that you cannot get by investing in PAMM accounts.

However, the risks are the same; even the most experienced professionals “stumble” sometimes, and losses can follow. But you can diversify the risks with this option by distributing funds among several signal providers. Nothing prevents you from copying several orders at once from several signal providers.

Examples of auto trading services:

  • CopyFx.
    This is RoboForex’s auto trading system. It supports the cross-copy function, that is, you can copy orders at once from many signal providers. The work is 100% transparent, and the service works with the typical MetaTrader 4 trading platform. The minimum deposit is $100.

  • Share4you.
    This is an auto copy service that belongs to Forex4you. It provides an extensive list of hundreds of signal providers with detailed statistics. The service has many settings that allow you to copy orders, not 100%, but according to individual parameters. It is fully automated, and an important feature is there is no minimum deposit.

  • FOREXCOPY.
    This service belongs to InstaForex. It also offers a wide selection of signal providers with their ratings and transparent statistics. It is fully automated with the possibility to fine-tune the copy function. The minimum deposit is $10.

Trust Management as an Investing Option

Investing in trust management is the third way to get passive income on Forex. This investment option is a classic but it has evolved to include copying transactions and PAMM accounts.

Investing in trust management is a direct contribution to the trading of another player in the Forex market. That is, you transfer part of your deposit to the specified account, and the trader uses these funds in trading. If the bid wins, the trader transfers the winning amount to you, less his pre-agreed upon commission.

The main risk is obvious. You are entrusting your funds to a third party. And if the contract is not concluded, the trader may simply not return your funds to you or return a lesser amount than promised. There are two ways to prevent this from happening:

Trust Management as an Investing Option

Invest in traders who are employees of a brokerage company. Some brokers provide such a service, that is, they have professional traders to whom you can transfer your funds to be managed;

Alternative option: work with a third party based on a contract. The contract can be drawn up in different ways, but if you conclude it yourself, without the broker’s help, then all legal defects fall on your shoulders. Theoretically, having a contract is a guarantee of compliance with the terms by both parties. But in practice, much depends on how competently the contract is drawn up.

Alternative option: work with a third party based on a contract

Investing in trust management is riskier than PAMM accounts and auto trading. However, the risk is successfully minimized if you trust the funds to the “personal” traders of your broker. With this option, the situation is substantially similar to investing in PAMM accounts, but in the case of trust management, you transfer funds directly to the account of traders who trade on your behalf.

Top 7 Forex Managed Accounts

The comparison table provides information about different forex brokers, their regulators, minimum deposit requirements, and the types of investment programs they offer.

Broker Regulator Minimum deposit Type of Investment program

RoboForex

IFSC

$50

RAMM, Auto-trading (CopyFX)

FxPro

CySEC, SCB, FCA, FSCA

$100

PAMM

IC Markets

CySEC, ASIC

$200

PAMM, Copy trading

eToro

CySEC, FCA

$200

Copy Trading

FXTM

FCA, CySEC, FSCA, FSC

$10

FXTM Invest

Instaforex

FSC

$1

PAMM-accounts, auto-trading (Forex COPY)

XM Broker

ASIC, IFSC, CySEC

$5

Autotrading (MQL5)

RoboForex CopyFx

Open an account
Your capital is at risk.

RoboForex CopyFx is a managed account service for forex trading with a $50 minimum investment requirement. Investors can copy experienced traders' trades and diversify their portfolios by selecting from a range of traders based on their performance history. The platform also offers risk management tools such as maximum drawdown limits and stop-loss levels to protect investments.

👍 Pros:

User-friendly

Provides real-time monitoring

Robust risk management tools

Excellent asset selection

👎 Cons:

High risk of losing money

FxPro PAMM Account

Open an account
Your capital is at risk.
79.27% of retail investor accounts lose money when trading CFDs with this provider.

FxPro is a reputable brokerage firm that is well-regulated by multiple global authorities, including the FCA and CySEC. Opening an account with FxPro requires a minimum deposit of $100 USD, making it accessible for traders of all levels. Additionally, the FxPro PAMM account offers the unique advantage of utilizing Expert Advisors along with comprehensive reports on performance. This allows traders to make informed decisions and maximize their returns.

👍 Pros:

Highly regulated

Segregated client funds

Low minimum deposit

User-friendly registration

👎 Cons:

High trading fees

Inactivity fee

Only allows Forex and CFDs

IC Markets PAMM and Copy trading

Open an account
Your capital is at risk.
Up to 75.93% of the broker’s non-professional clients incur losses when trading CFDs.

IC Markets offers both PAMM and copy trading services. The PAMM service allows investors to allocate funds to experienced traders, while the copy trading service allows investors to automatically copy the trades of successful traders on the platform. These accounts require a minimum investment of $200. One of the benefits of IC Markets PAMM and copy trading services is their low fees. Additionally, the platform offers a range of risk management tools, including stop-loss levels and maximum drawdown limits.

👍 Pros:

Low Forex fees

Easy account opening process

👎 Cons:

Slow chat response

Limited product selection

eToro Copy Trading

Open an account
eToro is a multi-asset investment platform. The value of your investments may go up or down. Your capital is at risk. Don’t invest unless you’re prepared to lose all the money you invest.

eToro's copy trading service enables investors to automatically copy the trades of successful traders on the platform. The minimum investment required is $200, and investors can select from a wide range of traders based on their past performance. The platform also offers a range of risk management tools, such as stop-loss levels and a maximum investment amount.

One of the unique features of eToro's copy trading service is its social trading community, which allows investors to interact with and learn from other traders. However, it's essential to carefully consider the performance history and risk profile of any traders you choose to copy, as past performance does not guarantee future success.

👍 Pros:

Used by over 6 million traders

Highly regulated

User-friendly platform

👎 Cons:

High fees

FXTM Copy Trading

Open an account
Your capital is at risk.
80% of retail investor accounts lose money when trading CFDs with this provider.

FXTM copy trading is a managed account service that allows investors to automatically copy the trades of successful traders on the platform. With a minimum investment of $10, investors can choose from a wide range of traders based on their performance history, risk profile, and other metrics.

One of the standout features of FXTM copy trading is its user-friendly interface and detailed performance metrics. These allow investors to analyze and monitor the performance of the traders they have allocated their funds to. The platform also offers risk management tools such as stop-loss levels and margin call alerts to protect investors' funds.

👍 Pros:

User friendly

Detailed performance metrics

Highly regulated

👎 Cons:

High fees

Limited customization

InstaForex PAMM

Open an account
Your capital is at risk.

InstaForex PAMM is a managed account service that enables investors to invest in professional traders who manage their funds on their behalf. The service offers a low minimum investment of $1 and a variety of managers with different investment strategies to choose from. Additionally, InstaForex PAMM provides risk management tools to help investors manage their portfolio risk and protect their investments.

👍 Pros:

Low minimum investment

Variety of managers

Risk management tools

Flexibility in investment strategy

👎 Cons:

Performance not guaranteed

Manager evaluation required

Forex trading risk

Potential loss

XM Autotrading

Open an account
Your capital is at risk.
77.74% of retail investor accounts lose money when trading CFDs with this provider.

XM offers an automated trading service called XM Autotrading, which allows you to automatically copy trades from experienced traders to your own trading account. This service is especially useful if you don't have the time or expertise to analyze the markets yourself.

With a minimum investment of just $5, XM Autotrading gives you access to a variety of signal providers, each with its own trading strategy and performance track record. Additionally, the service provides risk management tools to help you manage your portfolio risk and protect your investments.

👍 Pros:

Automated trading convenience

Low minimum investment

Variety of signal providers

Risk management tools

Access to experienced traders

👎 Cons:

Signal provider performance not guaranteed

Evaluation required

Forex Investing Risks

Forex investing would not be so popular if the risks could not be controlled. Effectively, the risks in the foreign exchange market are no higher than with any other investment option, and sometimes even lower. There are two main risks:

  • You can lose your investment if the PAMM manager or trader you trust to manage your funds turns out to be a scammer. This risk is easily eliminated by working only with trusted licensed brokers;

  • You can lose funds because the manager of the PAMM account, signal provider, or trader to whom you entrusted the management of your funds made an error in his market forecasts. This happens to all traders because it is impossible to win 100% of the time. But to reduce this risk, you can distribute funds between several PAMM accounts or signal providers.

For a novice trader, the chance to win when investing with an experienced player is always higher than when bidding on your own. Plus, as we mentioned already, this is an experience that cannot be obtained in any other way. And if everything is done correctly and all risks are diversified to the maximum, the probability of losing all your funds will be extremely low. However, we recommend investing only the amount that you are willing to lose, and never invest all your funds.

Investing in the Forex Market: Expert Opinion

“Modern Forex investing systems offer the easiest and most convenient way to generate passive income. The main thing is to choose the right broker and investment program. PAMM/MAM/RAMM accounts are now gaining great popularity, but auto trading services are equally promising. All options for investing in the Forex market make it possible to successfully diversify risks using a wide range of mechanisms. As a result, the investor can receive a stable income without becoming a professional trader. However, one should always remember that in financial markets, income always reflects the level of risk. This is one of the main economic laws”.

Ivan Andriyenko

Ivan Andriyenko

Author at Traders Union

Team that worked on the article

Mikhail Vnuchkov
Author at Traders Union

Mikhail Vnuchkov joined Traders Union as an author in 2020. He began his professional career as a journalist-observer at a small online financial publication, where he covered global economic events and discussed their impact on the segment of financial investment, including investor income. With five years of experience in finance, Mikhail joined Traders Union team, where he is in charge of forming the pool of latest news for traders, who trade stocks, cryptocurrencies, Forex instruments and fixed income.

The area of responsibility of Mikhail includes covering the news of currency and stock markets, fact checking, updating and editing the content published on the Traders Union website. He successfully analyzes complex financial issues and explains their meaning in simple and understandable language for ordinary people. Mikhail generates content that provides full contact with the readers.

Mikhail’s motto: Learn something new and share your experience – never stop!

Dr. BJ Johnson
Dr. BJ Johnson
Developmental English Editor

Dr. BJ Johnson is a PhD in English Language and an editor with over 15 years of experience. He earned his degree in English Language in the U.S and the UK. In 2020, Dr. Johnson joined the Traders Union team. Since then, he has created over 100 exclusive articles and edited over 300 articles of other authors.

The topics he covers include trading signals, cryptocurrencies, Forex brokers, stock brokers, expert advisors, binary options. He has also worked on the ratings of brokers and many other materials.

Dr. BJ Johnson’s motto: It always seems impossible until it’s done. You can do it.

Mirjan Hipolito
Cryptocurrency and stock expert

Mirjan Hipolito is a journalist and news editor at Traders Union. She is an expert crypto writer with five years of experience in the financial markets. Her specialties are daily market news, price predictions, and Initial Coin Offerings (ICO). Mirjan is a cryptocurrency and stock trader. This deep understanding of the finance sector allows her to create informative and engaging content that helps readers easily navigate the complexities of the crypto world.