Equility Forex About Managed Forex Account

Copyright (c) 2011 Equility Inc.

What Does Forex - FX mean?

The market in which currencies are traded. The Forex market is the largest, most liquid market in the world with an average traded value that exceeds $3 trillion per day and includes all of the currencies in the world. Forex is An over-the-counter market where buyers and sellers conduct foreign exchange transactions. The Forex market is useful because it helps enable trade and transactions between countries, and it also allows an investment opportunity for risk seeking investors who don't mind engaging in speculation. Individuals who trade in the Forex market typically look carefully at a country's economic and political situation, as these factors can influence the direction of its currency. One of the unique aspects of the Forex market is that the volume of trading is so high, partially because the units exchanged are so small. There is no central marketplace for currency exchange; trade is conducted over the counter. The forex market is open 24 hours a day, five days a week and currencies are traded worldwide among the major financial centers of London, New York, Tokyo, Zürich, Frankfurt, Hong Kong, Singapore, Paris and Sydney.The forex is the largest market in the world in terms of the total cash value traded, and any person, firm or country may participate in this market.

Divesification benefits:

Diversification has always been a crucial element of portfolio management, and this has become increasingly evident in light of the recent market turmoil. As we have seen, traditional asset classes generally move in the same direction simultaneously. Equities, commodities, real estate - all moved up in tandem together as the global economy expanded on cheap credit - and all plummeted in tandem in spectacular fashion as the markets crashed in 2008 and early 2009. As a result, investors had few options to protect themselves against the downside. Thus today, more than at any other time, there is a strong argument to add interrelated assets to an investment portfolio.

Forex as an asset class:

Similar to investment funds which invest in traditional asset classes, such as the equity and bond markets, Equility Seek to profit from the currency markets by employing a variety of approaches and strategies. However, unlike the equity and bond markets, there are some characteristics of the foreign exchange market which create inherent market inefficiencies, and create opportunities for profit making. As opposed to the stock market, where the vast majority of participants are seeking to make a profit, there are many entities operating in the current market whose primary motivation is not to seek a profit. Managed Forex: Forex has great potential for pure diversification, our managed forex accounts offer diverse selection of strategies that coincide with each other to create the perfect portfolio for every Investor, all on one forex management platform.

How does it work?

1. Sign Disclosures/ risk agreement: Upon enrollment you will need to sign a Non-Disclosure agreement that will keep the confidentiality between you (the client) and Equility Inc. as your account manager this will make sure you are not disclosing the trading activity on your account with any 3rd party.

2. Open an account on your name with designated broker: Upon submission of your account opening application you will need to establish your own broker account on your name by completing a simple account opening form.

3. Sign LPOA: Once you submit your application for processing you will be provided a Limited Power of Attorney form that will allow us the ability to put your account under the managed Forex Master account for the trading signals.

Master Account The managed forex master account has 3 different types of structure:

1.LAMM- stands for "Lot Allocation Management Module". It uses a fix number of lots per account. 2.MAM- stands for "multi account manager", it uses a predetermined amount of margin to allocated per each account.

3.PAMM- stands for "Percentage allocation management Module". It uses a certain percentage per account (generally evenly distributed between all accounts under management).

Management Fees The managed forex accounts have a basic Incentive fee for the forex management services and consists of 25% Per Profit based on a "High water mark"

High-Water Mark:

The highest peak in value that the account has reached. The high-water mark ensures that the manager does not get paid large sums for poor performance. So if the manager loses money over a period, he or she must get the fund above the high watermark before receiving a performance bonus. For example, say after reaching its peak a fund loses $10,000 in month one, and then makes $25,000 in month two. The manager therefore not only reached the high-water mark but exceeded it by $15,000 ($25,000 - $10,000), which is the amount on which the manager gets paid the bonus.


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Information for this article is brought to you by equility forex Equility is a proud market developer relations company in the forex market with an objective to provide as well as meet higher trading standards, and improve yearly returns. You may find a copy to this article on Equility website at managed forex accounts