One of the options, which can eliminate such concerns and increase investment - is the system of trust management system. An investor does not need to know all the details and peculiarities of trading at Forex as the job of making profit will be done by professional traders. They will analyze market, make all trading decisions and carry out trades on the investment accounts. An investor pays off an interest from the profit in the amount agreed between an experienced trader and an investor.
Such investment or duplicator accounts are part of the Social Trading service, which is a reliable method of investing at Forex. Copying trades of the successful traders is the safest option of making investment and gaining profit.
Let’s have a closer look at how it works:
A duplicator account is an investor’s account on which he/she can conduct trading operations. Profit of the investors is distributed in accordance with the share of their investments. A Manager and an investor sign a contract, which specifies the amount of interest an investor will pay off in favor of the Manager. The contract also specifies all conditions necessary for mutually beneficial cooperation between an investor and an experienced trader or a Manager in the system of Social Trading. The contract clearly stipulates the terms of distributing profits between the parties.
Note that in the Social Trading system a Manager uses his/her own funds for making transactions. It means that a Manager is interested in making profits using effective trading strategies for two reasons: he/she receives profit from his/her own investments, and an interest from the profit made on the duplicator accounts.
When an investor decides to open dublicator accounts it is very important to select an experienced trader (Manager) who will make trading decisions for you and to whom you will trust your money. This person should be a professional with good experience of work at Forex and a remarkable trading strategy enabling to earn high profits. Brokers usually make a rating of the Managers, which shows full information on the Manager’s account - profitability, equity, periods of maximum drawdown, duration of trade. This data is a reliable guideline enabling an investor to choose the best Manager.
The advantages of the investment accounts are as follows:
- Non-trading risks for a Manager and an investor are very low as the Social Trading system is based on the fully automated technologies.
- It gives a chance for an investor to distribute investments between several Managers, reducing the risk of loss. If one of the Managers bears losses, investments made into the accounts of the other Managers can be profitable.
Thus, the system Social Trading is quite transparent and simple, regulated by the contract agreed by both parties and is based on automated technology of calculating profit for the participants.
Benefits of the Social Trading system make this option of investing money at Forex very attractive and the number of private investors into this system is permanently increasing.
The content of this article reflects the author’s opinion and does not necessarily reflect the official position of LiteForex. The material published on this page is provided for informational purposes only and should not be considered as the provision of investment advice for the purposes of Directive 2004/39/EC.