Managed Forex Accounts

Managed forex accounts allow you to trade currencies without lifting a finger. Instead, an experienced investor will trade on your behalf.
Kane Pepi
Author: Kane Pepi

Last Updated: May 29, 2020

If you want to trade currencies on a full-time basis, but you have little to no knowledge of how the space works, it might be worth considering a managed forex account. In a nutshell, you will be entrusting your funds with an experienced trader, who will then buy and sell forex pairs on your behalf. In return, the investor will take a share of the profits, which is typically in the 10%-30% range.

In this article, not only do we explain what managed forex accounts are and how they work, but we also list the best providers to do this within 2020.

On this Page:

    Trade with eToro - 0% Commission

    Our Rating

    • Trade Stocks, Forex, Crypto and more
    • 0% Commission on Trades
    • Copy Trades of Pro Investors
    • Easy to Use Trading Platform
    Disclaimer eToro: 75% of investors lose money when trading CFDs.

    What are Managed Forex Accounts?

    In its most basic form, managed forex accounts allow you to trade currencies without needing to do any of the work. Instead, an experienced trader will buy and sell currency pairs on your behalf. In this sense, managed forex accounts operate in a similar nature to a mutual fund or hedge fund. That is to say, once you invest a fixed sum of money, the institution will buy and sell assets for you.

    This means that managed forex accounts are ideal for those of you with no skills or knowledge of the financial markets. Even if you do understand how the forex space works, you might not have the required time to trade on a full-time basis. As such, managed forex accounts allow you to earn money in a completely passive nature.

    So what’s in it for the experienced trader? Well, the overarching concept is that the investor will take a share of any profits that they make for you. Commissions typically sit within the 10%-30% range. Expect to pay more when using a forex trader that has a verifiable, long-standing track record in the industry. In most cases, your money will be pooled together with other investors who are also looking to make a passive income.

    Note: Just because you allow an experienced investor to trade on your behalf, this doesn’t mean that you are guaranteed to make money. Just make sure you understand the risks of opening a managed forex account before parting with your funds.

    Example of a Managed Forex Account

    In order to clear the mist, let’s look at an example of how a managed forex account investment might work in practice.

    • You invest £5,000 into a managed forex account
    • The trader in question charges a commission of 30%
    • At the end of month one, the trader makes gains of 20%
    • On your investment of £5,000, this works out at a profit £1,000
    • Before the funds are added to your balance, the trader will take their commission
    • At 20%, they take £200, so this leaves you with a profit of £800.
    • Your original £5,000 investment is now worth £5,800.

    As you can see from the above, the trader took their commission before the monthly profits were distributed. Even so, you made sweet gains of £800 over the course of the month without needing to lift a finger. This is a prime example of passive income.

    How do Managed Forex Accounts Work?

    In terms of getting started, there are two ways to facilitate a managed forex account; directly with a broker or through a third-party. Let’s explore how to two investment streams work.

    Direct With a Broker

    Regardless of how you decide to open a managed forex account, an online forex broker will be involved in the process. After all, the trader will be buying and selling currencies in a live environment, so it makes sense that they need to do this with a regulated day trading platform.

    With that said, a small number of online brokers now offer managed accounts. If you are just starting out in the space, a good entry-level platform to do this with is eToro. The broker offers something called ‘Copy Trading’, which allows you to mirror the portfolio of expert traders.

    You get to choose which traders you wish to copy, and then all of their ongoing buy and sell orders will be mirrored on your account. Best of all, you’ll have a vast amount of data at your fingertips to help you select an investor, such as their historical trading results and assigned risk level.

    Third-Party Platform

    The other option that you have at your disposal is to use a third-party provider that offers managed forex account services. These platforms sit between you, the broker, and the experienced trader. This particular option is good if you want an all-in managed service.

    You simply need to invest your funds with the provider, and they will then assign you with a trader that fits with your long-term investing goals. Alternatively, some third-party providers allow you to select a trader yourself.

    A key benefit of using a specialized provider is that they will do all of the hard work for you. At the forefront of this is vetting and validating the credentials of their partnered traders.

    Best Managed Forex Accounts and Third-Party Providers

    1. eToro – Best Managed Forex Account for First-Timers

    If you're just starting out in the world of automated trading and you want the safest, easiest, and most convenient way of opening a managed forex account, we would suggest eToro. In a nutshell, the online broker offers an innovative social trading feature where you get to copy the trades of other investors.

    You will have access to more than 12 million traders at the platform, so you're sure to find an investor that meets your goals. There are heaps of filters that will allow you to do this, such as the trader's average monthly return, assigned risk level, and preferred currency pairs. This ensures that you get to do your homework on the trader prior to parting with your money.

    Once you do find an investor that you wish to copy, you will replicate each and every forex order that they place. You can cash out your investment at any given time, so your money is never locked away. In terms of the getting started, eToro allows you to open an account in minutes. There is a $200 minimum deposit, which is also the minimum amount that you can invest in each copy trading portfolio.

    Supported payment methods include a debit/credit card, e-wallet, and bank account. There are no fees to deposit at eToro, nor will you be charged anything to copy trade. Most importantly, eToro is a heavily regulated platform, so you should have no concerns about the safety of your funds. This includes regulatory licenses from the FCA, ASIC, and CySEC.

    Our Rating

    • Catered to newbie traders
    • Choose from more than 12 million copy traders
    • Regulated by three tier-one licensing bodies
    • Minimum withdrawal of $50
    • High spreads
    • MT4/5 not available
    75% of investors lose money when trading CFDs

    2. World Markets - AI Managed Forex Account Services

    If you're looking for a more traditional managed forex account, it might be worth choosing World Markets. First and foremost, the entire investment process at the platform is 100% streamlined. This means that as soon as you open an account and deposit funds, World Markets takes care of the rest. With that being said, the platform actually utilizes an automated algorithm that is powered by Microsoft AI.

    This means that the software will buy and sell assets autonomously, as opposed to relying on a human investor. In terms of performance, World Markets claims that it made 718% and 647% in 2019 and 2018 respectively, which is huge.

    If you do like the sound of World Markets, the platform offers a 30-day Trial Account. You will be required to deposit €1,500 to activate the trial, which you can then withdraw at the end of the month if you are not satisfied. After that, you can then choose from a Standard Account (minimum €5,000) or Gold Premier Account (minimum €25,000). Commission-wise, the former attracts a performance fee of 20%, and the latter account reduces this to 10%.

    Our Rating

    • 30-day trial account with a minimum deposit of €2,500
    • Upfront about their revenue share model of 10-20%
    • No mark-ups on spreads or pips
    • Minimum investment on standard account is €5,000

    3. FX MAC - 6 Managed Trading Strategies to Choose From

    FX MAC is a managed forex account provider that gives you heaps of flexibility. Unlike the other top-rated platforms that we have discussed thus far, you actually get to choose the type of trading strategy that you wish to employ. This subsequently allows you to partner with a seasoned investor that meets your personal goals.

    For example, Investment Program 1 focuses exclusively on the fundamentals. The experienced trader will only buy and sell assets when a real-world news development surfaces. At the other end of the spectrum, Program 4 focuses on key technical indicators like the Fibonacci Levels and Moving Averages. Regardless of which program you select, the investment process at FX MAC couldn't be easier.

    To get the ball rolling, you'll need to fill out an application form and specify how much you wish to invest. The platform will then suggest a trading strategy that meets your 'risk vs reward' profile. Once you deposit the funds, that's it; FX MAC will do the rest. Although the minimum investment amount depends on the program you opt for, this starts at $5,000. In terms of performance fees, this is as high as 50% at FX MAC, so do bear this in mind.

    Our Rating

    • Allows you to choose your trading strategy
    • The entire investment process is passive
    • Very transparent on its fees
    • Minimum investment of $5,000
    • Commission is high

    4. FX Pig - Middleman Between you and Independent Forex Traders

    FX Pig is a third-party platform that offers a number of automated investment steams. At the forefront of this is its managed forex accounts. In a nutshell, the platform has partnered with a small number of expert forex traders that not only have a long-standing track record in the space, but the results are verifiable.

    Crucially, FX Pig does all of the hard work for you, as they pre-vet all of the traders that they partner with. Once you have chosen a trader that you like the look of, you will be required to open an account with FX Pig and deposit funds. Account minimums start at $500, but some forex traders require at least $2,000. Expect a commission share in the region of 20%-40% which is the price you have to pay for partnering with proven investors!

    Our Rating

    • Can connect you with proven forex traders
    • Get started with a minimum deposit of $500
    • PAMM account traders are pre-vetted
    • Profit share commission of 35% is huge

    What are the Risks of Managed Forex Accounts??

    Managed forex accounts are hugely popular with newbie traders, as they allow you to gain exposure to the global currency investment space without needing to have any experience. This is also the case with individuals that simply don’t have the time to trade. But, it is important to note that there are no guarantees that you will actually make money. After all, past performance is never a sure-fire way to predict future results.

    With this in mind, there is always the chance that you will make a loss. If and when your chosen investor does have a losing month, you won’t need to pay any commission. This in itself acts as extra motivation for the trader, as if they make nothing, they get nothing. Ultimately, just make sure that you have a firm grasp of the underlying risks of managed forex accounts before parting with your money.

    Choosing a Managed Forex Account Provider

    Although we have already discussed our top-rated managed forex account providers of 2020, we would urge you to conduct some independent research of your own. This will ensure that the platform is right for your long-term investing goals.

    Below you will find some of the main factors that you need to look out for when choosing a managed forex account.

    • Historial Trading Results

    The most important factor that you need to assess is the historical trading results of the investor. More specifically, you need to ensure that the stated results are verifiable. For example, if I told you that I had made 30% gains for 24 months straight, would you believe me? Probably not.

    As such, not only do you need to choose a trader that has a long-standing record of making gains, but you also need to be able to validate this!

    • Account Minimum

    The vast majority of managed forex account providers will ask you to meet a minimum investment. This can vary quite significantly depending on the platform you go with. For example, while eToro requires a minimum deposit of just $200, the likes of World Markets requires $1,500 for its trial account and $5,000 for its standard account. Just make sure that you feel comfortable meeting the minimum investment requirement before making a deposit.

    • Currency Pairs

    It’s worth exploring what currency pairs your chosen managed forex account provider specializes in. It’s best to pick a platform that focuses on a small number of pairs.

    If you are using an automated platform like World Markets, which utilizes AI technologies, then there is no limit to the number of financial markets the bot can trade. 

    • Maximum Drawdown

    The maximum drawdown is an important metric to look into when choosing a managed forex account. In its most basic form, it seeks to look at the highest swing the trader has made from the portfolio’s peak. Expressed as a percentage, the maximum drawdown indicates the largest amount of money the trader has lost in a single day, week, month, or year.

    In Layman’s terms, the higher the drawdown, the riskier the trader is. We would suggest sticking with investors that have a single-digit drawdown percentage rate.

    • Revenue Share

    As we have noted throughout our guide, managed forex account traders will take a percentage of any profits that they make for you. This particular metric is a difficult one to judge, as you should never choose a trader just because they charge a competitive commission.

    On the contrary, you should look at whether the commission charge is justified. For example, although FX Titan (via FX Pig) charges a revenue share of 35%, the investor has an excellent track record. As such, you typically get what you pay for in the online forex space.

    • Safety

    It’s best to stick with providers that offer a number of safeguards on your funds. For example, as the likes of eToro are regulated by the FCA, CySEC, and ASIC; you will be benefiting from three licensing bodies. At the other end of the spectrum, heaps of managed forex account providers active in the market offer no safeguards at all. This is something that you should look at closely, as you don’t want to end up depositing funds with a rogue provider.

    • Payments

    Finally, you then need to look at the types of payment methods that the broker supports. The easiest way to get money into a managed forex account is to use a debit or credit card. E-wallets are also handy, as deposits as instant and free. You can also deposit money with a traditional bank account, but expect to wait 3-5 working days before the funds arrive.   


    In summary, managed forex accounts are suited to two types of individuals. Firstly, if you have little to no experience of the online forex space, managed accounts allow you to trade without needing to lift a finger. Secondly, the phenomenon is also ideal if you don’t have the time to buy and sell currency pairs yourself. All in all, managed forex accounts allow you to earn passive income.

    There is never any guarantee that you will make money. Sure, the trader that you choose might have a great track record in the forex scene, but this isn’t to say that they won’t have a really bad run of results. If they do, you could end up losing a lot of money. Crucially, not only do you need to do your homework before choosing a managed forex account, but you also need to have a firm understanding of the risks.

    Trade with eToro - 0% Commission

    Our Rating

    • Trade Stocks, Forex, Crypto and more
    • 0% Commission on Trades
    • Copy Trades of Pro Investors
    • Easy to Use Trading Platform
    Disclaimer eToro: 75% of investors lose money when trading CFDs.


    How do managed forex accounts work?

    By investing money in a managed forex account, an experienced trader will buy and sell currencies on your behalf. In return, they will take a percentage of any profits they make for you.

    What is the difference between a managed forex account and copy trading?

    Some would argue that both investment streams refer to the same thing. That is to say, managed forex accounts and copy trading allows you to buy and sell forex without needing to do any of the work.

    How much do I need to invest with a managed forex account provider?

    This can vary depending on the provider you sign up. While this can start from just $200, some providers require surplus of $2,000.

    How do managed forex account traders make money?

    The trader will take a commission of any profits they make for you. This can start from 10%, all the up to 50% or more. In other words, expect to pay much more for a seasoned trader with a verifiable track record.

    What happens if the trader makes a loss?

    All traders encounter losing months every now and then - so this is something that you should prepare yourself for. If and when this does happen at a managed forex account platform, the trader will not earn any commission that month.

    See Our Full Range Of Trading Resources – Traders A-Z

    All trading carries risk. Views expressed are those of the writers only. Past performance is no guarantee of future results. The opinions expressed in this Site do not constitute investment advice and independent financial advice should be sought where appropriate. This website is free for you to use but we may receive commission from the companies we feature on this site.
    Kane Pepi

    Kane holds academic qualifications in the finance and financial investigation fields. With a passion for all-things finance, he currently writes for a number of online publications.

    HTML Snippets Powered By : XYZScripts.com