While browsing Forex Peace Army, I was taken aback by the fact that there are so many so-called Forex Asset Managers. Just by taking a quick glance at their websites I can say that most if not all of them (never say never) are in reality one of the lowest form of scammers. It’s bad enough that there are so many self-professed professional traders who charge hundreds for worthless courses. But these guys take advantage of the naivety and greed of some people to fleece them of more than $10k. Not only that, but they give respectable traders and the forex market a bad name.
Some people believe that as long as the managed forex account is opened in their name and they don’t send money to a stranger’s account, there’s no way for them to get scammed. There are actually two ways. First one is through the monthly management fee. This is normally disclosed in advance, so there shouldn’t be any surprises. The second way, and this is where it gets dirty, is through a process called ‘churn and burn’. The manager, acting as introducing broker, will make lots of trades because he’s being compensated with a percentage of the commission/spread of every trade, irrespective of the overall profitability of the account.
Here are the most important things you should pay attention to when looking at someone who pretends he’s an asset manager and wants to manage your money:
- what’s the proof for the performance claims ? Ignore any photos, excel spreadsheets or .pdf documents. Ask for third-party verification (on sites like Myfxbook) or audited track-records from a reputable CPA. It should go without saying that only real money accounts should be considered. The longer the track-record, the better. Beware that in cases where third-rate brokers are used, you can’t trust Myfxbook. It’s not their fault if the broker sends them falsified account statements. You should also make sure that the CPA really exists. Check their website, and contact the firm. I know that a scammer set up a website for a fake accounting firm which could fool you at first sight.
- who are the traders ? Ignore faceless, nameless traders that only go by such generic terms as ‘team of profitable traders, XX years combined experience ).
- what’s the general aspect of the website ? Does it look more like a get-rich-quick, no risks involved infomercial ? Just ignore it then.
I hope you found this helpful. If you’re in doubt about a company offering managed forex accounts, leave a comment or get in touch with me. I’ll be happy to give you my opinion.