The decision to invest in a managed Forex account can be a difficult one. This is a significant decision just like any investment you might make. The big difference in this investment compared to others is the leverage used.

Basically, you are trading with money that has been borrowed and because of this the broker can and will interfere with any trades to protect its own entity. Once you make the decision, sign up for it, put funds into the account, and you are ready to go.

When you have decided you are ready to invest in the Forex market there are three types of accounts you can choose: standard, mini, and managed. Each has their pros and cons but it is you who has to decide which option is best for you.

1. Standard. This account is the most used type of account. You will be trading lots equal to $100,000 per trade. With leverage you will not actually be putting up this much money but that is the amount used in the trade. Typically you will have to put up $1,000 per lot to place the trade.

Pros Service – Many brokers will give perks and service to investors who choose this option as you are investing more money. Gains – possible profits in this type of account are much higher because of the high amount invested.

Cons Capital Requirement – Most brokers would require you to have a starting balance of at least $2,000 and others more than that. Potential to Lose – Just like you could make $1,000 a day, you could also lose that $1,000 in a day.

2. Mini – The mini account lets you trade much smaller lot sizes. Each lot on the mini account is only $10,000.

Pros The risk – Because you can trade much smaller lot sizes the risk is lower. This is ideal for those who are new to trading the Forex. It can also allow for you to try out new trading ideas with much lower risk. Capital – The amount of money to open an account can be as small as $250.

Con Reward is low – when you don’t risk much you don’t get much. This is a type of account for those beginning in the market.

3. Managed Forex Account – A managed account is very different than the other two. You will allow for a pro trader to place all of your trades for you. You will not place the trades yourself.

Pro Pro trader – You will have an experienced trader who will be making the trading decisions for you. This means you do not have to watch the market all the time.

Cons Capital Requirement – Each managed forex account will have a minimum amount required to invest which can range from $5,000 to $100,000. Fees – You will have to pay a percentage of your gains each month to the account manager and this can range from 20% to 50%.

You must choose which option is right for you. It is wise to always test out each option before investing to much money. Know that it is your money and you must choose what is best for it.