Best Managed Forex Accounts

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Contributor, Benzinga
May 18, 2023

Check out Interactive Brokers or AvaTrade as two of the best managed forex accounts.

Trading is a difficult job, especially in markets that are open around the clock like forex. Paying attention to stocks is hard enough, and they only trade between 9:30 a.m. and 4 p.m. But currency markets can still be accessible to individuals short on time, and a managed account can offload the work to an expert. Let's take a look at the best managed forex accounts.

Quick Look: Best Managed Forex Accounts

Disclosure: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 68% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

Best Managed Forex Accounts

Looking to open a managed forex account? Here are five FX brokers to consider when weighing your options.

1. Best for Those Already With an Advisor: Interactive Brokers

Interactive Brokers has been providing trading and investment services to clients all over the globe for nearly half a century. Regulated in the U.S., Interactive Brokers allows users to access domestic and international markets, trade complex securities and derivatives and design their own APIs for automated trading systems. And while it doesn’t have copy trading or percentage allocation money management (PAMM) services, it does allow financial managers to open accounts and trade on behalf of clients.

Type of Service: Interactive advisory services

Minimum Investment: No minimum for cash accounts; $2,000 for margin accounts

Management Fees: Varied

Regulated in: U.S. (SEC), U.K. (FCA), Canada (IIROC)

Accepting U.S. Clients: Yes

Pros

  • Variety of asset classes
  • Powerful research tools
  • Multiple trading platforms
  • Over 100 different order types

Cons

  • No direct managed account option; you must have your own manager open an account for you
  • No manager recommendations are available

2. Best for Social Traders: AvaTrade

AvaTrade is a trading account offering forex, cryptocurrency and contract for difference (CFD) trading. Clients can trade CFDs based on stocks, indices, commodities and bonds. But if you’re looking for a managed account, consider AvaSocial, a broad network of traders where clients can link their accounts to certain profiles and automate their strategy. Clients can also use popular copy trading products ZuluTrade and DupliTrade. AvaTrade supports MetaTrader 4 and 5 but also has its own WebTrader platform.

Type of Service: Social trading and copy trading

Minimum Investment: Credit cards have a minimum of 100 in the currency of choice; $5,000 min for DupliTrade.

Management Fees: Varied based on application

Regulated in: European Union, Australia, Japan, South Africa, Israel, Middle East

Accepting U.S. Clients: No

Pros

  • Multiple types of social and copy trading applications 
  • Demo account available
  • Regulated in several major jurisdictions
  • Easy deposit and withdrawal structure

Cons

  • No U.S. clients
  • Annual administration fee 

3. Best for MetaTrader Users: Pepperstone

  • Pepperstone FX
    Best For:
    Trading Experience
    securely through Pepperstone FX's website

    Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75.6% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money.

Pepperstone is an Australian-based broker known for its access to a variety of platforms, including MetaTrader 4 and 5. Pepperstone has three options for social traders: Myfxbook, MetaTrader Signals and DupliTrade. Spreads vary depending on your account type, but fees are minimal across the board and there’s no minimum to open an account.

Type of Service: Social trading

Minimum Investment: No minimum for opening an account; $5,000 min to use DupliTrade

Management Fees: None

Regulated in: U.K., Australia, Cyprus, Kenya, Bahamas

Accepting U.S. Clients: No

Pros

  • Multiple platforms include MetaTrader, cTrader, and Capitalise.ai
  • Different account types for more experienced traders 
  • Three different copy trading avenues 
  • No management fees

Cons

  • Only forex CFDs
  • No U.S. Clients 
  • Limited leveraged (30-1)

4. Best for Copy Traders: eToro 

  • eToro Forex
    Best For:
    Demo Accounts
    securely through eToro Forex's website

    CFD trading is not available to U.S. users. 76% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.

Forex traders in the U.S. often have limited options since many of the other securities on these platforms, like CFDs, are banned. But eToro is open to U.S. residents and has a robust copy trading service available to its clients. Copy traders can follow and mimic the portfolios of top traders on the network with no additional fee. 

Type of Service: Copy trading

Minimum Investment: $10

Management Fees: 1% fee on cryptocurrency trades; no fees for copy trading 

Regulated in: U.S., U.K., Cyprus, Israel, Australia 

Accepting U.S. Clients: Yes

Pros

  • No management fees 
  • $10 account minimum
  • Available in the U.S.
  • A vast network of traders to copy
  • Top performers can earn additional income through the Popular Investor Program

Cons

  •  Added fee for cryptocurrency trading
  •  No outside trading platforms like MT4
  •  Smart portfolios program has higher minimums

5. Best for Research and Education: Dukascopy

Dukascopy is a Swiss financial services company offering a wide range of products from banking to CFDs to managed forex accounts. Dukascopy uses PAMM, which allows clients to devote different percentages of their portfolios to specific traders for copy trading. The firm also has a deep library of research and education materials for novice traders looking to learn about currency trading with market updates and news.

Type of Service: Copy trading and wealth management services

Minimum Investment: $1,000

Management Fees: No management fee; $5 commission per $1 million of volume traded

Regulated in: Switzerland, Latvia, Hong Kong, Japan

Accepting U.S. Clients: No

Pros

  • Multiple platforms available, including MetaTrader 4
  • PAMM method for clients to copy multiple traders at once
  • 200-1 leverage available 
  • Transparent pricing and margin requirements

Cons

  • No U.S. clients
  • Higher fees than competitors

What is a Managed Forex Account?

A managed forex account is one where the owner outsources trading decisions to a third party, often a more experienced trader with a solid history in the market. Managed forex accounts can be set to copy all trades by other investors through linking, or the account owner can divvy up portions of their portfolio to different traders for strategic diversity.

Who Managed Forex Accounts Are Best for

If you fit any of the criteria below, you may want to consider a managed forex account:

  • Busy individuals who can’t watch the market: Forex markets operate 24 hours per day during the week, and that’s far too much time for most individuals to study the market. If you have a demanding career or family obligations, a managed forex account lets you outsource some (or most) of the work.
  • People who prefer to let someone else do the trading: Maybe it's not the time but the experience that worries you. Are you a novice in the currency markets and want to learn from an expert first?  A managed account will provide you with a trading history to study for a deeper understanding.
  • You don’t have the psychological makeup of a trader: Trading isn’t for everyone. Money tends to make people emotional, and the last thing you want is to become overly aggressive when trading. A managed forex account will remove emotion from the equation and allow you to focus your energy elsewhere.
  • Anyone who wants to plan for the future: A managed account provides access to different types of experts and can provide a basis for forex market education. If you have long-term plans in currency markets, why not take some time to learn different techniques from experienced traders?

Who Doesn’t Need a Managed Forex Account

Managed accounts aren’t for everyone. The following factors might be dealbreakers for you.

  • You want complete control of your trading and finances: A managed account requires you to let go of control of your capital. Sure, you can change your parameters and follow new traders, but you must be comfortable with others handling your money.
  • You lack enough risk capital: A managed account often requires a decent amount of initial capital to earn profits. Many brokers on this list have zero account minimums, but sophisticated trading practices will likely require a few thousand dollars minimum.
  • You want to make quick cash: Forex trading takes time, and the best traders aren’t making reckless decisions. Managed forex accounts are meant to increase wealth slowly over time, not create new millionaires overnight.
  • You don’t want to go through the process required for opening a managed forex account: Perhaps you want to keep things simple, skip the extra paperwork and open a standard forex trading account. You can still find different traders to imitate, although you won’t be able to automate your trading.

Things to Consider with Managed Forex Accounts

Before making a decision on a managed forex trading account, make sure to ask questions about the following:

The Forex Broker

Is the broker regulated in the proper jurisdictions? Does it have a reputation for squashing scams and malicious community members? Always research a few different forex brokers and select the one that best fits your needs.

Minimum Investment Required

How much capital do you need to start with a specific copy trading of managed investment service? Make sure you have the funds to maintain your account successfully.

Allocation Methods

How are your funds managed? Does your account mimic a single trader, or are PAMM techniques offered? Understand how your account can be split before signing up and making a deposit.

Managed Forex Accounts Still Require Owner Participation

A managed forex account can be useful, but it’s not a set-it-and-forget-it tool for forex trading. Clients still need to watch their managed accounts for changes in market trends and fluctuating capital. Don’t ignore your account just because someone else is handling the trading. If your strategy falls out of line with your long-term goals, you’ll want to adjust sooner rather than later.

Frequently Asked Questions

Q

Are managed forex accounts safe?

A

If using a reputable broker, your funds will be secure in a managed account. However, that doesn’t mean you won’t lose money if you copy an ineffective trader.

Q

What is the minimum to invest in a managed forex account?

A

It depends on the broker; some have no minimums and others have minimums measured in the thousands.

Q

How many forex accounts can I have?

A

There’s no limit to the number of forex accounts an individual can open.

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About Dan Schmidt

Dan has written about a wide range of topics including stocks and investing, cryptocurrencies, banking, student loans, and credit cards.