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1. Identify FOREX managed accounts. An Internet search engine will quickly reveal dozens of FOREX managed accounts. Your first selection criterion will be the minimum investment required. While many managed accounts set a minimum of $10,000, wealthier investors can seek out accounts that require $100,000 or more. You may want an account that allows you to control the amount of leverage you allow the manager to use on your behalf. Leverage increases risks and rewards; it is based on margin -- the amount of collateral used to secure an investment -- and the types instruments traded. Instruments such as FOREX futures and options are highly leveraged, and margin levels can reach a ratio of 100:1. You will want to match your account's leverage characteristics to your own aversion to or comfort with risk.
2. Eliminate undesirable managers. You can research the qualifications of an account manager by checking his education, certifications and licenses. Professional organizations and universities will often verify membership and graduation information. You'll also need to check a manager's track record. Look for at least 5 years of trading history that specifies annual returns and amount under investment. FOREX account managers that trade FOREX futures and options are registered with the Commodity Futures Trading Commission and the National Futures Association as commodity trading advisers. The NFA offers on-line background affiliation status information.
3. Evaluate fees charged by the remaining candidates. You will pay for the expertise supplied by an account manager. Fees can be a flat percentage of your investment or a percentage of profits. Ideally, you'd like to incentivize the account manager by paying him only for profits. Profit-based fees tend to be high -- up to 20 percent -- and are usually pegged to a 'high-water mark,' which is the highest previous value of your account, adjusted for contributions and withdrawals. Other accounts charge a flat fee for assets under management, with or without an additional performance fee. A management fee, usually 2 percent to 5 percent, is lower than a performance fee but you have to pay it whether or not you make a profit.