Foreign Exchange

What is a Managed Forex Account?

A managed forex account is a trading account where a professional trader handles trading activities for you. Instead of making trades yourself, you hire a skilled trader or money manager who knows the ins and outs of the forex market and has a really good track record. You give limited power of attorney to the money manager, permitting them to perform certain trading activities on your account. They’ll take care of all the buying and selling and will try to make profitable trades by utilising their knowledge and skills. The ultimate aim of a money manager is to grow your investment. Managed Forex accounts are great for those who don’t have time to trade the market on their own or are still learning the concepts of trading in demo accounts. But it’s also great for professional traders to want to supplement their income by leveraging their skills.

Who Can Benefit From a Managed Forex Account?

Managed Forex accounts are a convenient option for both individual investors and professional money managers.

It’s a well-known fact that the forex market is extremely volatile. Even though entering the market is easier because of low barriers, staying there and winning consistently over time is difficult. Most traders only end up losing money rather than making any profits. If you want to succeed in the forex market, you must know the complex factors that influence currency values. However, you can opt for an easy route by using a managed Forex account. In such a type of trading, you can leave the trading decisions to skilled money managers who have a deep understanding of the market dynamics, and you can enjoy the profits they generate on your accounts. They have all the necessary trading tools to determine the right lot size, entry and exit points to achieve success consistently. This allows you to benefit from the expertise of professional traders who analyse markets and execute trades on their behalf.

Similarly, professional money managers can use managed forex accounts as a way to earn commissions. They get an opportunity to trade big lot sizes and make an additional income by helping beginner traders. While some money managers charge a fixed fee for managing your accounts, others have a profit-sharing model in which they may ask for a certain percentage of your total profit.

Types of Managed Forex Accounts?

MAM: MAM or Multi-Account Manager accounts allow traders to combine individual accounts into a larger fund that includes both trader and investor accounts.

The great thing about MAM accounts is that all trades executed on the master account are automatically replicated on each associated MAM account based on predefined settings. Moreover, investors can also modify their trades according to their needs and preferences. This level of control is a crucial advantage of MAM accounts. Additionally, MAM accounts offer performance-based compensation to the master trader. The master trader receives a performance fee based on their trading performance and a percentage of the returns generated. MAM accounts provide advanced features and control for investors, combining the benefits of both PAMM and LAMM accounts. They are suitable for traders who handle multiple accounts and seek efficient trade management and customisation options.

PAMM: PAMM or Percentage Allocation Management Module allow investors or account holders to allocate a percentage of their capital to a master account which a money manager manages. PAMM accounts are unique because investors can follow multiple trader accounts and allocate different percentages to different trading systems. By spreading their investments across various trading systems, PAMM investors can reduce the risk associated with relying on a single strategy or trader. They have the flexibility to choose and adjust their allocations based on the performance and track record of different traders.

LAMM: LAMM is an acronym for Lot Allocation Management Module. In a LAMM account, the investor determines the number of lots to be traded, and the profits or losses are calculated based on the multiple of lots invested. It’s a simpler version of the PAMM account and is suitable for larger accounts with higher trading capital.

LAMM accounts are particularly useful for investors with larger funds because they address liquidity concerns. When trading with higher capital, filling orders at interbank exchanges can be challenging if insufficient liquidity is available. Investors can mitigate this issue by specifying the number of lots and ensuring smoother order execution.

Pros & Cons

There are several pros of managed forex accounts:

  1. One big perk of having a managed Forex account is the freedom it gives you. If you’re busy with a job or another business and don’t have time to analyse trades or execute them yourself, a managed account can be perfect for you. Instead of dealing with all the decision-making and challenges of trading on a daily basis, you can delegate the trading responsibilities to an experienced trader. A managed account is a brilliant trading tool that allows you to focus on other things in your life while still benefiting from forex trading.
  1. By entrusting your funds to a professional trader, you can benefit from their skills and potentially avoid costly mistakes that beginners often make in the market. Basically, working with a professional can accelerate your progress and protect your investments.
  1. Trading can be quite challenging emotionally and not everyone has the same tolerance for it. If you also have a hard time managing your emotions, you can use a managed account. Since trades will be executed by a professional trader on a managed account, you won’t have to deal with the burden of managing your emotions. As you won’t have to be stressed about monitoring the trades closely or making trading decisions, it can take the pressure off your shoulders.


  1. While talking about the cons of managed accounts, you will agree that the biggest downside is the lack of personal trading experience. A professional money manager may not have the same level of personal investment and care as you would put into your account. After all, it’s your money, and you’re the one who truly wants it to succeed.
  1. If someone else is handling your trades, you take advantage of the opportunity to learn and understand the ins and outs of forex trading yourself. A certain satisfaction and empowerment come from making your own investment decisions and experiencing the market firsthand. By actively participating in trading, you can learn valuable skills and insights that can benefit you in the long run.


Managed forex accounts are excellent options for beginners as they allow them to invest in the forex market without worrying about their lack of experience or time. However, choosing the right money manager is extremely important to ensure a smooth trading experience.