Are You Making These 10 Managed Forex Investing Mistakes?

You may have heard of the high returns many generate on the Forex market, but have also heard how easy it is to get your account wiped out if you don’t know what you’re doing as a trader. So, you’ve decided that the best approach for you would be a managed Forex investment account as it would still allow you to take advantage of the high Forex returns without the risk involved of trading yourself.

While this is a smart move, especially if you have little trading experience, there are some mistakes investors make that can land them in the deep end. The key to investing in managed Forex funds like a pro is preparation, which means that you don’t dive in, head first, without covering your bases first. So, if you’re considering investing in a managed Forex fund and have made or are making any of these mistakes, you need to slow down and start applying a bit of common sense.

Focusing Solely on High Yields While everyone wants to get the highest possible yields on all their investments, high yields mean high risk, which is even more applicable in the extremely volatile Forex market. This is why stability over the long term is a lot more important. If you have little to no experience with managed Forex accounts, then opt for a trader whose strategy involves low to moderate risk. Once you’ve gained more experience, you can commit a portion of your managed Forex investment to a higher risk strategy for higher yields.

At Synergy FX, we offer a variety of portfolios to suit any risk appetite. Though we target high yields and we achieve above average returns, our ultimate goal is to protect our clients, which is precisely why the strategies we use minimize our clients’ exposure as much as possible. We rely on low risk strategies that generate high frequency trading, which exploits relative mispricing as well as short-term and arbitrage opportunities. In other words, we generate high yields while using low risk strategies.

Putting Your Money in the Hands of an Unlicensed Forex Trader One of the biggest mistakes you can make is to put your money in the hands of an unlicensed Forex trader. A private trader is only really interested in their own account and how much money they are making, which means they often play fast and loose with other people’s money. And as a private trader, no accountability is involved whatsoever. On the other hand, a licensed Forex trader will generally do the best they can for your account because they are accountable for any mistakes they make and maintaining a good reputation is essential for them to generate more business, which means they really will do their best.

So, while you might make more money with a private trader at first, you can be certain that this success won’t last and you’ll end up losing everything. Your money will be much safer in the hands of a licensed Forex trader, even if their yields are lower.

Synergy FX is fully licensed. We are regulated and licensed by the Australian Securities and Investment Commission (ASIC), which means you will always be safe with us. ASIC requires all licensed providers of financial services to meet stringent capital requirements. Strict internal procedures pertaining to risk management, account, audits and staff training also have to be implemented.

Handing Your Money to a Novice Forex Trader Forex trading isn’t something you can learn to do overnight. Becoming consistently profitable on the Forex market takes time and lots of experience, which is why you should never risk handing your money over to someone with less than two years’ experience. And don’t take their word for it. Make sure they can prove it with a documented track record or licensing history.

The fact is that it is difficult for a Forex trader to be successful and maintain their license for two years because of the various events that take place in the market, which can severely test the trader’s strategy. Most tend to fail at some point because of these big events, but the very few who do survive and continue to show positive results beyond this two-year period are definitely traders you’d want to invest with.

Our team of traders have a combined experience of more than 100 years in trading the currency markets profitably. Synergy FX has helped hundreds of Forex investors achieve high levels of profitability, a fact which we can prove with the performance results of all of our managed Forex funds. Just drop us a line and we’ll be more than happy to provide you with all the details.

Investing Too Much The Forex market is volatile, which means that investing in managed Forex, regardless of the trading strategy being used, is still a high risk proposition, at least in comparison with other forms of investment. So, make sure that you don’t put more than 30 percent of your money into Forex.

Emotions can result in poor decisions being made, which means that even managed Forex accounts come with a lot of risk. If you do want to invest more money, make sure you have a high tolerance for risk and that you are prepared to lose that money. In other words, don’t invest next month’s rent and grocery money.

Though we are committed to generating the highest yields possible for our clients, at Synergy FX we know how risky the currency markets can be. And that’s precisely why we advise all of our clients to consider their investment objectives and risk tolerance before deciding how much they want to invest. Our ultimate goal is to protect our clients.

Keeping All Your Money in Your Forex Account If your managed Forex account is making a profit, you should withdraw some of those funds. Compounding is definitely a good thing and a great way to grow your investment, but withdrawing funds – at least to the point where you recover your initial capital – is definitely the safer approach. If you have made the mistake of working with an unlicensed managed Forex investment account, you definitely want to make those withdrawals as soon as possible, ideally once your account doubles in size. Thus, you’ve already recovered your initial investment, protecting you even if the worst were to occur.

When you invest in a Synergy FX managed account, you don’t have to worry about accessing your money. You can withdraw funds or top up your account at any time you like. We pride ourselves on complete transparency, meaning you can constantly monitor the performance of your account, based on which you can decide whether to withdraw funds, leave the money in the account, or even add more to increase your absolute returns.

Investing in a Managed Forex Account with No References A good Forex trader will have at least one client who will vouch for him or her, which is why you should never sign on with a trader who refuses to produce references, especially if said trader is unlicensed.

A licensed, effective trader will be more than happy to provide references. If the trader you are considering refuses to provide references and contact details so you can verify the claims, regardless of the reason, you need to move on and find someone else.

Synergy FX is one of Australia’s leading Forex brokers. We pride ourselves on our transparency and our entire staff has a single goal and that is to generate the highest possible yields for our clients while minimizing their risk exposure. We have helped countless clients increase their investments and we have more than USD$10 billion being traded over our platform every month. And we are more than happy to provide you with references that will attest to our integrity on the market.

Investing in Offshore Managed Forex Accounts Offshore Forex traders tout their high yields and high levels of profitability coupled with tax benefits to convince novice Forex investors to place their money with them. Unfortunately, more often than not, these Forex traders are less than honest and are more interested in scamming you out of your money. If you put your money with a Forex trader who’s in another country on the other side of the world, you will have no legal means at your disposal to recover your money if something does happen. So, if you don’t want to have to deal with multiple jurisdictions and a lot of hassle only to lose your money anyway, then avoid all these offshore Forex traders.

Synergy FX is based in the heart of the financial district in Sydney, Australia, right across from the Australian Stock Exchange. You can’t get any more “on-shore” than that.

In terms of jurisdiction, Synergy is a member of the Financial Ombudsman Service (FOS), which is an approved Australian external dispute resolution scheme. The FOS can deal with any complaints regarding the financial services we provide under our Australian Financial Services License.

Investing with a Forex Trader You Found Online While there are plenty of legitimate companies and Forex traders online, there are also thousands of so-called traders out there who want nothing more than to get their hands on your money. In the worst case scenario, they’re just scammers, and in the best, they’re novice traders. In both situations, you’ll lose your money. So, don’t use Craigslist and similar sites or social media platforms to find a Forex trader to invest your money with. In fact, don’t trust anyone who can’t offer you proof and references with regards to the yields they are promising, regardless of where you found said person.

Synergy FX has been operating as a broker for many years. We are fully licensed by the Australian Securities and Investment Commission, which has stringent rules in place regulating the activities of Forex brokers. We are also more than happy to provide proof under the guise of performance results as well as references from countless happy clients.

Giving Your Money Directly to the Forex Trader The way these things are done is that your money should be sent to a licensed third party, such as a clearing house or a Forex brokerage, who will hold the money. Of course, this third party should be licensed, as mentioned, but also in good standing with their regulatory authority. If you decide to send money directly to the Forex trader, there’s a good chance they’re running a scam and you could lose your entire investment. Losing your investment on a bad trade is one thing, but being scammed out of your hard earned cash is something completely different.

Synergy FX will never ask you to send us your money directly. All client funds are held in completely segregated client trust accounts at Commonwealth Bank of Australia, one of Australia’s largest and most prestigious banks. Thus, in the unlikely event that Synergy were to become insolvent, your money

will be safe and won’t be used to pay back creditors because it is kept completely separate from our own funds.

Investing without Understanding What You’re Investing In This holds true for any investment, including a managed Forex account. Forex trading certainly has the potential to generate higher yields than other types of investments, but it also comes with greater risk. And that’s precisely why you need to understand how Forex investing and trading works before you put in your money. Even if someone else is doing the trading, you still need to understand what is going on so make sure you get educated before you put your money down.

At Synergy FX, we want our clients to understand what we do. So, whether you will be investing in a managed Forex account or will be trading yourself, we offer an extensive range of training guides, webinars and video tutorials in our Forex Education section, which we constantly expanding. We give you all the tools and resources you need to learn all you need to know about the currency markets.

Not all these mistakes are catastrophic, but the more of them you make, the riskier the investment environment will become. And though risk is an inherent part of Forex trading and investing, you definitely should take as many measures as possible to limit your exposure.