Can I Trade Forex for Someone Else? – Do you believe your forex trading skills can benefit you and others?
If yes, you might be thinking of trading for someone else. The question is, can you do so?
We will answer this question below and also the other associated questions which you might have along with it.
Can I trade forex for someone else?
Yes, you certainly can trade for others. These accounts are known as managed forex accounts, and many traders are using their skills to help others make profits. In turn, they take a small portion of their earnings.
It helps them generate a significant amount of money as commissions. On the other hand, the client does not need to trade personally to generate profits. It is a win-win situation for both of them.
How can you trade forex for someone else? There are some steps to undertake to trade forex for someone else.
- Step 1: You have to first and foremost have a track record to attract clients.
- Step 2: You have to find out a broker allowing managed forex accounts.
- Step 3: You have to ask clients to open up an account with a particular broker.
- Step 4: The client will then hand over a limited power of attorney to you.
- Step 5: You have to sign an agreement detailing your fees and other terms and conditions.
- Step 6: After that, you can begin trading on behalf of the client once he/she adds funds to the account.
As you can see, the procedure is relatively simple to trade for others. However, there are a few things to keep in mind. Things to consider before trading forex for someone else. These things include:
1. Ironclad contract:
Often there are misunderstandings and other problems when trading forex for someone else. A much better alternative is to have an ironclad agreement. It will articulate not only your fees but what happens in case of losses and the average performance for the client to expect.
2. Understand the expectations of the clients:
Many times, clients might expect inflated returns from you. Just because you have achieved it in the past, does not mean you can do so again. You have to understand the expectations of the client.
If the expectations are pretty high, it is a good idea to shun the client and look for another one. It is always a good idea to under-promise and over-deliver rather than vice versa.
3. Follow proper money management rules:
Irrespective of your strategy, it is essential to follow money management rules to protect the client’s capital.
4. Stay in touch with the clients:
Communication is pretty essential. Without communication, the clients might start doubting you. Whether the account is in the positive or the negative, it is crucial to communicate with your client always.
5. Understand the limited power of attorney:
It is also necessary to understand the limited power of attorney. It will help you cover your legal bases. You have to consult a lawyer for the same. Only once you are clear about a power of attorney, you can proceed to trade forex for someone else.
When you consider these few factors, it is easy to set up accounts and start trading for someone else.
The answer is, yes, you can trade for someone else. However, you have to look at the few things highlighted above and then take a call. Only when you have a clear-cut strategy articulated in the past, you can go ahead and do so.