Forex Trading > This page

Forex Trading - Managed Account (When you need someone to trade for you)


Forex Trading can be challenging and if you do not have the time to trade yourself a good option is to go for Forex Managed Accounts where a reputable firm trade your money on your behalf. It is usually a sound investment strategy to diversify and allocate between 10 to 20% (depending on your circumstances) of your available investment funds in the relatively high risk, high gains Forex Market.

Introduction to the CBI Forex Managed Account

You have heard about high gains that can be achieved on the Forex markets and are interested in becoming involved in Forex Trading. You realise that high gains go hand in hand with high risk and therefore you want to "do the right thing" to tap into this lucrative market and not to loose your money. You do not however have the time to study the Forex markets, methods, software systems, technical analysis and all the other information. You just want to build your investment portfolio by putting 10 to 20% of your portfolio value into the Forex markets.

The following table and graph confirm the vast difference between ordinary and Forex investments over time. With the ordinary investment with 5% pa growth, your investment of $103 will become $160 after 10 years. The Forex Managed Account with 30% pa growth (please see disclaimer at the end of this document) will be $1060 after 10 years! The following table and graph clearly indicate the vast difference between the two "investments".

It is however not a sound investment strategy to put all your money in the high yield, high risk field of Forex Trading. By using a combination of the two types of investment, you can limit your risk and expect a higher yield in your total investment portfolio. A good investment strategy is therefore where 80% of your total investment amount is in a traditional investment at 5% growth per annum and 20% of your investment in CBI's Forex Managed Account at 30% expected growth per annum.

The following table and graph indicates the possible yields of a traditional investment in comparison with a combination of ordinary investment (80% of amount) and a Forex Managed Account (20% of amount). The traditional investment of $103 will become $160 after 10 years while the combination investment will grow to $241 in the same time which gives a Return on Investment (ROI) of (241-103)/103*100 = 134%.

More important is the fact that the vast improvement in your total investment is based on a risk of only 20% of the funds invested in the Forex Managed Account. This is 20% of 20% = 4% of your total investment portfolio. Thus a ROI of (241-160)/160*100 = 51% more than only an traditional investment is realised with a risk of only 4%.

The following table can be used to do the calculations for your own specific situation and risk profile. This spreadsheet can be downloaded when you supply your information in the form at the bottom of this page.

Choosing the right Forex Trader
It is also important to choose a competent Forex Trader with a solid track record that will look after your investment.

Over the past few years, we at have investigated various international Forex Trading companies and are confident that the information we present here will be to your advantage.

We want to introduce you to Capital-Builder Investments (CBI). We have personally met with the management of CBI and after a number of meetings we have decided to link up with them and to refer investors interested in Forex Trading to them. I know their technical trading advisor personally since the year 2002.

Firstly more about CBI:
Deo Volente Empowerment and Training CC, reg nr 2004/050938/23, t/a Capital-Builder Investments (CBI), is registered as an authorized category II financial services provider by the South African Financial Services Board, license number 21606. CBI therefore comply with the very strict requirements for Forex Services Providers in South Africa.

ODL Securities Limited where the money will be traded, is authorized and regulated by the Financial Services Authority (Registration number 171487) of the United Kingdom and is a member of the London Stock Exchange. ODL Securities Inc. is registered by the Commodity and Futures Trading Commission (CFTC) and is a member of the National Futures Association (NFA, ID: 0330396). ODL is also registered and regulated in Japan, Australia en Monaco. ODL Securities is one of the biggest independent brokers in the UK and currently have a book in excess of $6 billion under fund management, of which CBI is one of their fund managers.

Over the past 4 years CBI has achieved an average return of approximately 30% per annum on the Forex Managed Accounts. It will be difficult to constantly beat this at other places!
(See risk disclosure at the bottom of the page)

The CBI Forex Managed Account comprises of the following:
CBI offer investors the opportunity to participate in their investment product and charge a performance fee of 20% on new profits only. This means that if CBI does not make a profit on your Forex Managed Account for a specific month, then no performance fee is payable to them for that month. CBI needs to get your investment up to the previous highest level before they can start charging a performance fee again. It is therefore to CBI's advantage to be intimately involved in your investment and not to blindly trade your money.

Minimum investment amount : USD 10,000 or EUR 10,000 or GBP 5,000 or ZAR 50,000

Investment Term : No minimum term (minimum of 12 months recommended)

Notice Period : 60 days

Cost :
Initial fee 3% of initial market value, thereafter none for the duration of the investment. No withdrawal costs except for normal bank charges and no other administration costs.

Trading Fee:
A transaction fee of $30 USD will be charged for every round turn lot ($100 000) traded, regardless of account performance. CBI may recover the trading fee at monthly intervals from the account.

Risk Disclosure:
The mandate, approved by the Financial Services Board in South Africa, allows for a draw-down of 20% of capital and a maximum of 5% exposure in the market of your Forex Managed Account. In practice the actual maximum exposure to the market is less that 2%. More re-assuring is the fact that the 20% capital draw-down is from the maximum amount of your investment.

E.g. if you have "invested" $100 000 initially (over and above the 3% initial fee) all trading will be stopped on your account if the value falls to $80 000 (80% of starting value). If your account is up to $120 000, then the 20% principle will apply on the $120 000 and trading will be suspended when the value reaches $96 000. Therefore your risk level can only moves up to ensure that your maximum exposure at any time is 20% of your current investment amount.

You will be able to monitor your account:
When you open a Forex Managed Account at CBI, you will receive a login and password to be able to follow the trading activity on your account in real time as CBI believes in total transparency to their account holders. Although you are not actually allowed to trade, you will have "inside" knowledge of what is happening to your money in your Forex Managed Account.

Please provide your details after which the procedures to open a
Forex Managed Account at CBI
as well as a link to the Spreadsheet download will be provided.



Risk Disclosure:

Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. Leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts. Past performance is not necessarily indicative of future results.

Recommended further reading:

Background to
Forex Trading
I want to trade myself

Main Forex Markets
Market Dynamics
Margin Trading
Trading with a Strategy
Risks inherent to Forex
Forex abbreviations

What do I have to know and do to trade in Forex?
Courses and Training