Forex vs. Mutual Funds

Managed Account

Managed Forex Accounts vs. Mutual Funds, Hedge Funds, Stocks and Bonds

Why do people invest in stocks bonds or mutual funds? Why do they have a stock broker?

The stock broker advises them of what stocks to buy and when to sell them and lock in their profits or cut their losses.

Why do people invest in mutual funds?

Low cost of entry. Buying a lot of one stock is a lot of money and it is easier to pool in a mutual fund. Also, they aim to diversify their investments. Another reason people choose mutual funds is because they do not have the time, knowledge and patience to manage investments on their own.

Why do clients invest in hedge funds?

Because they are investments that yield above average returns. However, not all people can invest in them. They must be high net worth investors. Sometimes the minimum investment for those clients is in the millions.

Managed Forex Accounts

Now with  Managed Forex Accounts everyday retail clients and investors can take part in these advanced alternative investments that were recently only available to the extremely wealthy. At TheFXHelpers , we aim to make Managed Forex Accounts available to all types of clients and investors so that capturing the returns of these assets is in everyone’s power. Now we can all have our own money truly working for ourselves.

Forex vs. Equities.

If you are interested in trading currencies online, you will find that the Forex market offers several advantages over equities/mutual fund trading.

24-Hour Trading. A true 24-hour market, Forex offers a major advantage over the limited hours of equity trading. Whether it’s 6pm or 6am, somewhere in the world there are always buyers and sellers actively trading foreign currencies. Traders can respond to breaking news immediately and Profit and Loss is not affected by after-hours earning reports or analyst conference calls.

Superior Liquidity. Forex boasts a daily trading volume that is over 80 times larger than the New York Stock Exchange, so there are always broker/dealers willing to buy or sell currencies. The significant liquidity of this market helps ensure price stability, especially for the major currencies.

Greater Buying Power. The leverage offered by most Forex brokers substantially exceeds the common 2:1 margin available in equity trading. At 100:1, traders can post $1000 margin for a $100,000 position, or 1%. While certainly not for everyone, the substantial leverage available from online currency trading firms is a powerful moneymaking tool. Rather than merely loading up on risk, as many people incorrectly assume, leverage is essential in the Forex market because the average daily percentage move of a major currency is less than 1% (a stock can easily have a 10% price move on any given day).

Lower Transaction Costs. It is much more cost-efficient to trade Forex in terms of both commissions and transaction fees.

Profit Potential In Both Rising And Falling Markets. In every open Forex position, an investor is long in one currency and short the other. A short position is one in which the trader sells a currency in anticipation that it will depreciate. This means that profit potential exists in a rising as well as a falling market.

The ability to sell currencies without any limitations is another distinct advantage over equity trading. In the US equity markets, it is much more difficult to establish a short position due to the Zero Uptick rule, which prevents investors from shorting a stock unless the immediately preceding trade was equal to or lower than the price of the short sale.

Forex vs. Futures.

Global foreign exchange is the largest and most active financial market in the world. Forex traders worldwide trade actively around the clock, exchanging more than $5 trillion daily.

As outlined below, the benefits of Forex over currency futures trading are considerable.

More Volume = Better Liquidity. Daily currency futures volume on the Chicago Mercantile Exchange is just over 2% of the volume seen every day in the Forex markets. Incomparable liquidity is one of the many advantages of Forex trading.

Forex markets offer higher leverage – you are able to use the money more effectively to achieve better returns. With higher leverage comes higher risk.

Forex terminology and prices quotes are easily understood and universally used. Currency futures quotes are inversions of the cash price. For example, if the cash price for USD/CHF is 1.7100/1.7105, the futures equivalent is .5894/ .5897; a methodology followed only in the confines of futures trading.

Forex markets offer tighter spreads. By inverting the futures price to compare it to cash, you can readily see that in the USD/CHF example above, inverting the futures dealing price of .5894 – .5897 results in a cash price of 1.6958 – 1.6966, 8 pips vs. the 5-pip spread available in the cash markets.

Our managed Forex accounts offer investors the following benefits over traditional investments in the equity markets and mutual funds:

  • Absolute returns in either a rising or declining equity market
  • Diversification from a traditional equity/bond portfolio
  • Disciplined, risk controlled trading of liquid assets
  • Daily reporting, usually online, of account positions
  • 24/7 access to account balance
  • Immediate access to funds
Ideal for those who are:
  • In full-time employment
  • Busy somewhere else
  • Lack confidence in self-trading
  • Struggling with losses
  • Cannot stay at the computer all day long
  • Looking for a hassle-free monthly income
  • Building up assets for retirement