Best Managed Forex Account in 2024 - eToro
Top managed Forex accounts:
eToro - Biggest copy trading community in the world (over 3,000 verified investors with copiers)
OANDA - Best for trading with advanced technical analysis tools (TradingView charts support)
IG Markets - Favorable Forex trading conditions (0 fees, avg. EUR/USD spread - 0.8)
Trading.com - Farouble Forex trading conditions (leverage up to 1:50, 70+ currency pairs)
FOREX.com - Diverse range of tradable assets (80+ currency pairs)
RoboForex - Best Forex broker for beginners ($10 min. deposit, copy trading)
In this guide, Traders Union explores Forex brokers that allow traders to earn without active trading. The article examines the two main types of managed Forex accounts - PAMM accounts and copy trading services. Traders Union compares brokers based on various trading conditions in tables to simplify your understanding.
We'll also delve into what types of managed accounts offered by top brokers, the differences between different services, and how to choose the right account for your needs.
Warning:
There is a high level of risk involved when trading leveraged products such as Forex/CFDs. Between 65% and 82% of retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
| Broker | Copy trading | PAMM/MAM service | Regulation | |
|---|---|---|---|---|
|
|
|
CySEC, FCA, ASIC |
||
|
|
|
FSC (BVI), ASIC, IIROC, FCA, CFTC, NFA |
||
|
|
|
FCA, BaFin, ASIC, MAS, CySec, FINMA, BMA, CFTC, NFA |
||
|
|
|
FCA, CFTC, NFA |
||
|
|
|
CIMA, FCA, FSA (Japan), NFA, IIROC, ASIC, CFTC |
||
|
|
|
FSC |
eToro caters to both novice and experienced investors through its social trading features. Beginners can leverage the expertise of successful traders by copying their trades directly through the user-friendly CopyTrader feature. This eliminates the need for in-depth market knowledge and offers a chance to learn from the pros.
For investors seeking a more hands-off approach, eToro also offers Smart Portfolios - pre-built investment baskets managed by eToro's investment team. These provide diversified exposure to various assets based on specific market strategies. So, whether you're new to trading or looking for a guided approach, eToro offers a social trading environment to suit your needs. To connect to the CopyTrader platform, you need $200 or more.
Founded in 1996, OANDA offers a broad array of financial services globally. Registered in the United States, it operates under regulations from four jurisdictions, with the UK Financial Conduct Authority (FCA) as its primary regulator. Notable accolades include recognitions for "Best Forex Trading Technologies" and "Best Trading Platform". OANDA facilitates trading in FX, indices, bullion, commodities, and crypto, with no minimum deposit requirement.
OANDA offers a wide range of trading instruments. Copy trading is available via three trading platforms (MetaTrader 4, WebTerminal MT4, MT5).
To copy trade with MetaTrader platforms, you typically need to use a feature called "Signal Copying" or "Copy Trading," which allows you to automatically replicate the trades of experienced traders in your account. You can find this feature within the platform's interface or through third-party services that integrate with MetaTrader.
Oanda is known for its wide range of trading signals. Oanda signals are provided in four different ways, namely:
Copy trading.
Email alerts.
Signals through a blog on the website.
Clients benefit from tight spreads starting from 0 pips for currency pairs, diverse trading instruments, and multiple reputable regulators. OANDA stands out for its extensive offerings and regulatory compliance.
IG Markets, a Forex brokerage firm, operates as a distinct entity within the IG Group corporation. Listed on the London Stock Exchange and featured in the FTSE 250 index, IG Markets originated as a UK-based company established in 1974. Over the years, it has expanded its presence with representative offices in various European countries. In 2014, the company introduced a retail line of brokerage services. The international arm of the brokerage is headquartered in Bermuda, licensed by the Bermuda Monetary Authority under the number 54814. Primarily, IG Markets specializes in offering services for trading financial derivatives such as Contracts for Difference (CFDs).
Copy trading via MT4 platforms has been adeptly and seamlessly executed. Featured within a dedicated ranking on the MetaTrader community website, traders available for replication are easily accessible.
Clients utilizing the IG Trading Platform's mobile applications through their broker account have the option to configure notifications, ensuring timely entry into trades at optimal moments. These notifications cover a range of aspects including asset price fluctuations, economic events, and technical indicators.
Since I'm used to managing my capital independently, I tried copy trading purely out of curiosity. I was interested to see if it was possible to make a profit this way. The results were mixed. I filtered traders based on their consistent positive results over the past year and subscribed to 3 traders. After 6 months, one trader showed a loss of -8%, one showed a gain of +25%, and one showed a gain of +14%. Then I tried testing a service from a smaller broker, and the result was significantly worse - due to an opaque commission system, I lost about 30% in the first month. From my experience, I can recommend working only with large brokers with tier-1 regulation, which can offer transparent conditions for managed accounts.
I would also not recommend entrusting all funds to one manager. Diversification rules apply not only to independent investing but also to copy trading.
Professional traders are always seeking opportunities in the currency market. A large number of supported currency pairs by the broker allows traders to profit not only from major pairs but also from numerous exotic regional currencies, which are often more volatile. Traders Union has selected the top 3 brokers with the highest number of supported currency pairs in your country.
| Broker | Supported currency pairs |
|---|---|
90 |
|
80 |
|
60 |
Managed accounts services are excellent for passive investing with the leading forex brokers of 2024. Essentially, a managed forex account is a type of currency trading account that a professional trader or money management team will use to make trades on your behalf. Such accounts charge a fee for this service, but that fee is often quite negligible and can definitely be worth it.
A managed forex account can take the burden of day trading off the plate of passive investors and less active traders as such accounts provide access to different markets and assets beyond stocks and bonds. Nevertheless, any trading account should be considered high risk as the objective is usually to better optimize investment capital and take advantage of more frequent opportunities to make money in the markets. This is where utilizing the benefit of a more experienced trader or trading team to work on your behalf can pay off.
Because there is a large amount of online free and paid information about learning how to trade and do it yourself, most traders do not consider workable alternatives. They also frequently fail to assess the degree of difficulty and time commitment required to learn how to trade themselves. By using a managed forex account investors can continue to receive revenue from their company while their money is working for them generating extra income. Think of it like owning a boat. How many ex-boat owners can you find that will recommend it as a good idea? Maybe renting a boat would work fine.
The main types of managed forex accounts that are offered by brokers include forex copy trading, PAMM accounts, MAM accounts, advisory services, managed portfolios, and some other rarer types of accounts. It is worth noting that some of these “types” of managed accounts are technically not managed accounts at all, but are very closely related, as they utilize the expertise of more experienced market participants.
Copy-trading can be a part of a managed forex account, but it is a concept all of its own. Copy trading is simply the process of finding an expert trader with high profits and mimicking each and every one of their trading movements. Many traders will monitor major exchange networks and follow famous traders in order to make the best possible trading choices. Some platforms even automate this process, like eToro. You might be able to request that the manager of your managed account uses copy trading.
PAMM, or Percent Allocation Management Module, is an account management system that uses ratios to determine volume and returns. The activity of the account owner, such as trades, profits, and losses, is split between managed portfolios using the PAMM ratio.
MAM simply refers to Multi-Account Manager accounts. These accounts make it possible for a money manager to assign different ratios of leverage to different subaccounts, if the investor prefers. This makes managed accounts owners who have a high-risk tolerance gain better opportunities to invest.
Advisory services can be a part of a managed forex account, but such services are very different from simply having an account. With a basic managed forex account, you can briefly consult with your money manager and leave the entirety of trading to them. With advisory services, you’ll be able to meet with a financial advisor. That financial advisor will provide holistic portfolio recommendations to help you build your wealth. Such advisors with offer consultations that detail strategies, best practices, and market recommendations. When you open a managed account, you might be able to receive advisory services for free.
A managed portfolio is an investment portfolio that a professional forex trader or financial expert will make investments through on behalf of a client. Managed portfolios are pretty much synonymous with managed accounts, though it is worth noting that managed portfolios tend to include a diverse range of investments that go beyond just forex trading. Typically, a client will pay a financial advisor a flat fee or monthly fee to manage their account and make trading choices, though this fee will be based on the size of the portfolio itself.
Generally, a 1% to 2% annual fee applies.The manager will usually take a portfolio allocation approach with a focus on more traditional assets, such as stocks, bonds, ETFs, and mutual funds.
Managed forex accounts can include individual accounts, which are solo accounts based on an individual client’s financial goals and requests. Such accounts typically require a minimum deposit of around $10,000 to get started. Pooled accounts are also quite popular among newbie investors. Pooled accounts deal with a number of different investors in one single account. A client can open an account that is managed by one investor, who oversees the trading decisions of the entire account. Usually, the minimum deposit for such an account is a lot lower at about $1,000 to $2,000 to get started.
| Advisory Services | Copy Trading | PAMM/MAM | |
|---|---|---|---|
|
You Can Choose the Manager (Yes/No) |
No |
Yes |
Yes |
|
Managed by Professionals |
Yes |
Not Always |
Not Always |
|
Funds remain on the investor’s account |
Yes |
Yes |
No |
|
Additional software must be installed |
No |
Depends on platform |
Depends on platform |
|
Ability to halt trades at any time |
No |
Yes |
No |
|
Guarantees for investor |
No |
N/A |
N/A |
Choosing a managed forex account doesn’t have to be difficult. Any of the sixteen mentioned accounts in this guide are worth getting into. Generally, all you need to do is thoroughly evaluate the broker you want to go with. Look into the regulations and overall reputation of the broker. Who are they regulated by? What are reviews of the broker like online? Take the time to really browse online reviews from former or current customers. Is their service satisfactory?
From there, you’ll want to evaluate the actual platform. Although it won’t matter much if you are handing over trading decisions to a manager or professional trader as the platform will impact them. However, you will be monitoring your managed account, so it helps to make sure that the platform is user-friendly, easy to use, and very visual. Subsequently, examine the details of the terms and conditions to ensure that you understand your risks and detailed costs.
As an example, cryptocurrency traders that are stuck in accounts due to excess volatility in 2022 were surprised that their account assets once held at the broker, exchange or lending provider, became assets of the firm in the case of bankruptcy or reorganization.
Managed forex accounts work by simply putting your forex investment processes in the hand of a professional. A professional trader or financial expert will select your bids and trade for you. All you have to do is fulfill a minimum deposit and determine how much money you will be putting into the account per month. Those who opt for this type of account can get very large gains, but also potential losses. Essentially, if you are not confident in your trading ability, your best bet would be to leave your portfolio in the hands of a professional.
Active trading is the process of regularly trading in the forex market on your own. Also known as day trading, traders who take on this line of work spend hours monitoring the conditions of the market, identify different asset movements, make trades, and make decisions before their investment of choice reaches a particular expiration date.
Managed forex accounts have quite a few advantages over active trading. To start, you’ll have professionals taking on the process of trading for you. You won’t have to sit in front of a screen to make trades all day. The trading will be happening privately, passively, and behind the scenes. You won’t have as much control, but you won’t have to worry about making rookie mistakes.
Any type of forex trading is risky. This is a very risky and volatile market. There is the potential to make serious gains but also serious losses. However, when it comes to a managed account, their risks are lower than individual trading. Still, no one can guarantee profits in financial markets. For example: In copy trading, you can adjust the maximum risk level by subscribing to different traders and setting the maximum loss size after which copying will stop. You can set up a similar arrangement with the manager of your investment account. You won’t simply throw your account at a professional and be on your way. You’ll be able to choose your level of risk and what strategies you would like your account manager to utilize.
An important aspect related to the risk of a forex managed account includes the maximum amount you are willing to risk to participate. This is the maximum stop loss for the account. In other words, let’s say the maximum you are willing to lose is 15%, for example. Then, if the account goes down 5% you and the manager agree to have a conversation about the performance and reiterate that your acceptable loss is 15%. If the account goes below 15% the manager must stop trading and the relationship is to be reevaluated during a meeting with the manager.
Performance fees are commissions that are paid to the managed forex company, broker, or individual traders. Fees vary significantly, you can expect it to be anywhere from 25% to 50%. Performance fees are typically applied at the end of the month, assuming that there are profits in your managed account that go beyond the high water mark.
This is the absolute maximum amount of money that is generated after performance fees have been applied to the account. A high water mark needs to be exceeded before any additional profits can be deducted again.
Management fees are often one-time starting fees that investors will need to pay in order to open their account in addition to the account minimum deposit. For other accounts, management fees are deducted yearly and have to be paid to keep the account open. Unlike a performance fee, you’ll still have to pay a management fee even if your account does not have profits.
Yes, they are safe. However, it’s worth noting that foreign exchange is a very volatile market. Even if you have the best traders managing your portfolio, you could still experience unexpected losses.
A broker is a legal entity or individual that performs as an intermediary when making trades in the financial markets. Private investors cannot trade without a broker, since only brokers can execute trades on the exchanges.
Trading involves the act of buying and selling financial assets like stocks, currencies, or commodities with the intention of profiting from market price fluctuations. Traders employ various strategies, analysis techniques, and risk management practices to make informed decisions and optimize their chances of success in the financial markets.
Copy trading is an investing tactic where traders replicate the trading strategies of more experienced traders, automatically mirroring their trades in their own accounts to potentially achieve similar results.
An investor is an individual, who invests money in an asset with the expectation that its value would appreciate in the future. The asset can be anything, including a bond, debenture, mutual fund, equity, gold, silver, exchange-traded funds (ETFs), and real-estate property.
CFD is a contract between an investor/trader and seller that demonstrates that the trader will need to pay the price difference between the current value of the asset and its value at the time of contract to the seller.
Oleg Tkachenko is an economic analyst and risk manager having more than 14 years of experience in working with systemically important banks, investment companies, and analytical platforms. He has been a Traders Union analyst since 2018. His primary specialties are analysis and prediction of price tendencies in the Forex, stock, commodity, and cryptocurrency markets, as well as the development of trading strategies and individual risk management systems. He also analyzes nonstandard investing markets and studies trading psychology.
Bruce Powers is an expert trader and technical analyst with over 20 years of experience in Forex, commodities, ETFs, cryptocurrencies and other assets. He is an active trader, technical and fundamental analyst, media commentator, educator and a writer. As an author for Traders Union, he contributes his deep analytical skills, expertise and understanding of the global economy and financial markets to provide market analysis and insights. Powers is also a frequent guest on business TV news shows.
Mirjan Hipolito is a journalist and news editor at Traders Union. She is an expert crypto writer with five years of experience in the financial markets. Her specialties are daily market news, price predictions, and Initial Coin Offerings (ICO).
