Obviously an understanding of forex exchange instruments and the multitude of options, time frames, currency cross pairs, volatility and a country’s fundamental strength and weakness that affects it’s currency is something one must take into account when trading forex.   Not everyone has the expertise or time to learn these things.  Professional traders get paid to do just that, understand what drives the market and how to place positions on in a way that won’t wipe you out within days.

How Much to Start With?

It’s not necessary to start with large amounts of capital in the forex market.  Forex traders have leverage that hardly any other market can offer.  Whilst this can magnify the returns that forex can provide, it is also a double edge sword in that it can also magnify the losses.  Most brokers can offer leverage of up to 100:1 and some to 200:1.  Obviously, choosing a a managed fund that has sound money management principles and position sizing is one of the most essential factors to consider.  Even if one was trading themselves, money management and position sizing is considered one of the most important points to focus on when trading.

There was a time when only traders with larger sums of money could trade the forex.  Now, since the deregulation of the forex industry which was once the domain of the large banks and institutional traders, anyone can trade the forex.  The internet is also providing a multitude of information that allows anyone to educate themselves in the fundamental workings of the industry.  One can utilise the services of the fund manager whilst they educate themselves on the inner workings or develop a strategy that suits their personality or style.

Your Hands Are Not Shaking

Obviously, if you are an inexperienced trader but the lure of large profits is appealing to you, using a managed fund is a smart move.  A lot of inexperienced traders become very nervous and scared when trading.  They will often do the wrong things, in letting their losses run when they should have got out of a trade or cutting their losers too short when they should have let them run.  Second guessing their indicators or decisions to trade.  Using a fund manager who is experience in trading and treats it like a business will eliminate a lot of the wrong things to do when trading with live money.

What To Take Into Account

When entering into any sort of managed fund, questions must be asked of one’s self and the broker.  How much risk are you prepared to take on is very important.  If you are not able to take a large draw down in capital, which can definitely happen in the forex market, then reconsider your decision to trade in this market.  You should also ask what are the fees and commissions that will be charged by the fund manager.  Some managers will charge a flat percentage fee per year, regardless or return, some will opt for a percentage of any profits that are attained and nothing if there is low or negative returns.  The latter is somewhat attractive as it provides more of an incentive for the fund manager to perform.  Obviously, under these conditions, the percentage will be higher, but if your account can return 50% plus for the year, which is definitely possible, 10-15% commission isn’t too bad.  These are purely theoretically amounts and each manager is completely different.

Money Is Everywhere

And finally, the lure of trading in the forex market is the fact you are participating in the largest market in the world.  The market trades 24hrs a day five days a week and amongst every leading financial institution in the world.  There are literally opportunities many times a day to profit from the exchange of currency’s.

Due to the enormity of the market, it is very hard to manipulate unlike some other instruments in finance.  There is a constant flux of buying and selling of currencies across many countries, through many platforms, from speculators, large hedge funds, companies exchanging currencies for multinational deals and people exchanging currencies for holidays and travel.

So, if you want to participate in the largest, most liquid market in the world, but you don’t want to throw yourself int he deep end of the pool, using the services of a managed forex fund could just be the shot.  Obviously, teaching yourself to fish so you can feed yourself for life is an analogy in the trading world that basically means if you can learn to trade yourself, you can make all the money yourself and not have to pay anyone anything.  These are all questions that only the individual can answer, but in the meantime, the forex managed funds are there for you while you ponder your decision.

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There are many forex brokers out there that provide their customers with their software to trade on demos with.  One of the most universally accepted software programs that brokers use is metatrader 4.  Many of the brokers provide their customers with the ability to trade what they call mini accounts, where they can trade only a fraction of a full lot in a currency pair.  This can start from .1 up to .9 of a lot.  This allows the customer to limit their exposure in margin terms and participate in the forex market with much less money, as litte as $250.

What follows is a brief description of what Metatrader 4 is and what it can do.

Meta Trader 4

Forex traders carry operations with currency or other financial instruments with the help of trading platform. The most popular trading platform for today is a trading terminal MetaTrader 4 developed by the company MetaQuotes Software Corp. – one of the leading companies-developers, specializing on software development for financial markets. According to the data of the year 2006 the informational trading platforms developed by MetaQuotes Software Corp. are used by more than a hundred financial institutions and banks in more than 30 countries of the world. The trading platform MetaTrader 4 is a leader on the market of on-line trading informative systems. The comprehensible interface makes the terminal easy for monitoring the history of operations and trading accounts’ state.

The terminal’s settings make it possible to use graphics during the technical analysis with unlimited number of diagrams in various periods of time. Their quality influences the creation of your own trading advisors with the help of programming language MetaQuotes Language 4 built in the trading terminal MetaTrader 4. The programming language MQL4 makes the trading platform multifunctional and gives a trader lots of new possibilities necessary for the analysis of current quotes and quotes’ history. To test MetaTrader you can download the free of charge demo-version of the platform on the official site Forex Ltd and to set it up on your computer.

The advantage of the MetaTrader platform is the friendly user’s interface as well as the possibility to select and moderate language. You can change the language of interface from Russian into any other language any time you want by choosing from the list: German, French, Arabian, Farsi, Poland, Japanese, Chinese, spanish, Korean, Indonesian, Turkish, Bulgarian etc. You should just choose Languages in menu View. The user’s manual is built in the terminal that helps to find an answer on any current question concerning the use of terminal. The MetaTrader program popularization is not limited by the single financial instrument, the terminal is easy to adjust for both Forex and Futures or CFD in current time mode. Confidentiality of trade operations is guaranteed by the 128-bit security coding. Due to the editing function of quotes history, data import and export, the creation of your own trading strategies using the language MQL 4 became available. You can now program the actions and then follow them automatically. There is an interior mail system in the terminal to provide access to the support.

After the start and download of MetaTrader 4 you should get acquainted with the User’s Manual built in the program, to do this you should choose ‘Help’ – ‘Provide help’. You can use F1.

In the client terminal there is also the transmission of financial news from the leading information agencies – the Russian agency of economic information PRIME-TASS and the worldwide financial economic news agency Dow Jones Newswires.

With the help of programming language MQL 4 built in the client terminal you can create your own trading strategy script and after testing on demo-account use it on a real trading account. Trade automatization helps a trader monitor the fund market only once a day. The mechanical trade system realizes the set up algorithm of carrying trading on your own and excludes the human factor.

More details about programming trading terminal you can find on the site of the company MetaQuotes Software Corp. – the software developer – MQL 4 Community.

By: Odrew Wise

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