How to Invest in Forex Without Trading in South Africa

What are Forex Managed Accounts?

Managed accounts services are excellent for passive investing with the leading Forex brokers of 2023. Essentially, a managed Forex account is a type of currency trading account that a professional trader or money management team will use to make trades on your behalf. Such accounts charge a fee for this service, but that fee is often quite negligible and can definitely be worth it.

A managed Forex account can take the burden of day trading off the plate of passive investors and less active traders as such accounts provide access to different markets and assets beyond stocks and bonds. Nevertheless, any trading account should be considered high risk as the objective is usually to better optimize investment capital and take advantage of more frequent opportunities to make money in the markets. This is where utilizing the benefit of a more experienced trader or trading team to work on your behalf can pay off.

Because there is a large amount of online free and paid information about learning how to trade and do it yourself, most traders do not consider workable alternatives. They also frequently fail to assess the degree of difficulty and time commitment required to learn how to trade themselves. By using a managed Forex account investors can continue to receive revenue from their company while their money is working for them generating extra income. Think of it like owning a boat. How many ex-boat owners can you find that will recommend it as a good idea? Maybe renting a boat would work fine.

Types of Forex Investment Accounts

The main types of managed forex accounts that are offered by brokers include Forex copy trading, PAMM accounts, MAM accounts, advisory services, managed portfolios, and some other rarer types of accounts. It is worth noting that some of these “types” of managed accounts are technically not managed accounts at all, but are very closely related, as they utilize the expertise of more experienced market participants.

Forex Copy Trading

Copy trading can be a part of a managed Forex account, but it is a concept all of its own. Copy trading is simply the process of finding an expert trader with high profits and mimicking each and every one of their trading movements. Many traders will monitor major exchange networks and follow famous traders in order to make the best possible trading choices. Some platforms even automate this process, like eToro. You might be able to request that the manager of your managed account uses copy trading.

PAMM/MAM Accounts

PAMM, or Percent Allocation Management Module, is an account management system that uses ratios to determine volume and returns. The activity of the account owner, such as trades, profits, and losses, is split between managed portfolios using the PAMM ratio.

MAM simply refers to Multi-Account Manager accounts. These accounts make it possible for a money manager to assign different ratios of leverage to different sub accounts, if the investor prefers. This makes managed accounts owners who have a high-risk tolerance gain better opportunities to invest.

Advisory services

Advisory services can be a part of a managed Forex account, but such services are very different from simply having an account. With a basic managed Forex account, you can briefly consult with your money manager and leave the entirety of trading to them. With advisory services, you’ll be able to meet with a financial advisor. That financial advisor will provide holistic portfolio recommendations to help you build your wealth. Such advisors will offer consultations that detail strategies, best practices, and market recommendations. When you open a managed account, you might be able to receive advisory services for free.

Managed Portfolio

A managed portfolio is an investment portfolio that a professional Forex trader or financial expert will make investments through on behalf of a client. Managed portfolios are pretty much synonymous with managed accounts, though it is worth noting that managed portfolios tend to include a diverse range of investments that go beyond just forex trading. Typically, a client will pay a financial advisor a flat fee or monthly fee to manage their account and make trading choices, though this fee will be based on the size of the portfolio itself.

Generally, a 1% to 2% annual fee applies.The manager will usually take a portfolio allocation approach with a focus on more traditional assets, such as stocks, bonds, ETFs, and mutual funds.

Other Services

Managed Forex accounts can include individual accounts, which are solo accounts based on an individual client’s financial goals and requests. Such accounts typically require a minimum deposit of around $10,000 to get started. Pooled accounts are also quite popular among newbie investors. Pooled accounts deal with a number of different investors in one single account. A client can open an account that is managed by one investor, who oversees the trading decisions of the entire account. Usually, the minimum deposit for such an account is a lot lower at about $1,000 to $2,000 to get started.

How much can I earn?

Forex traders have varying degrees of success considering how much they make daily, weekly, and monthly trading Forex. While this is not 100 percent accurate, a successful manager can earn 30-50% per month, but not all Forex trading can guarantee such a profit.

Undoubtedly, there can be ups and downs in Forex trading, coupled with the high-risk nature of this type of investment. But you must realize that you need to have solid trading experience to make money from Forex trading.

A seasoned trader can invest $15,000 in an account and earn an average profit of $1500 each month. But given that other traders could earn between 20 and 50 percent of the same investments, that might be a living wage for some traders. And this is accomplished through consistent trading using a continually improved and updated strategy.

Excellence in Forex trading depends on many factors, such as the type of account, the skill of the manager, and possible management fees. The main factor affecting your income is the size of your account. So your earning potential increases as your investment does.

So your chances of profiting from Forex trading start when you choose a managed Forex account in South Africa. If the broker you are using for their managed Forex accounts has better features and experts handling the copy trading or PAMM accounts, you stand a chance to gain more.

What are typical minimum investments?

You are likely to see the minimum investment amount on different managed Forex accounts in South Africa to be between $100 and $500. Notably, the minimum investments will depend on the broker with whom you are vying for their Forex-managed accounts. Some brokers permit trades with a lower minimum deposit, conceivably between $25 and $100, possibly even for novice traders. So anticipate a minimum investment that is lower or even higher than the amount stated above.