Jad Capital Managed Forex accounts

     Frequently asked questions

OPENING AN ACCOUNT

Q. How do I open an account?
A. Please go the page where the account program is described. On that page we provide a link to Instructions for opening an account, and the Account Application you must fill out and submit to the broker. If you have further questions, we can often help with what you need to know, or find out for you, as well as provide you the names of specific contact people at the brokerage from whom to get information most quickly.

Q. Do I have to open my own brokerage account in order to participate in a managed account program?
A. Yes, you have to open a Forex trading account with the broker used by the managed account program. We only feature programs that use highly reputable, NFA registered brokers who offer excellent customer service. You open the account in your name.

Q. Can I choose my own broker and ask the fund manager to use it for managing my account?
A. No. Your account must be opened at the same brokerage as all others under management in that program. The head trader for the program has access to software that allows trading of these accounts as a group , but they must all be at the same brokerage for the trade manager to use this.

Q. If I already have an existing self-trade account at the managed accounts broker, can it be used in the managed program?
A. You can only use your existing account if it is with the broker used by the managed program AND you have converted it to a managed account. If you do this, that account can no longer be self-traded by you. If you wish to have both a self-trade account and a managed account, you must open a second account at the broker. In most cases this is quite easy, and consists of resubmitting the signature pages of your original account application, a signed Power of Attorney for the managed program, and a note to the broker asking them to open a second account. You can even ask them to transfer funds from your existing account, to get the new managed account funded.

Q. Can I open my account as an IRA, and transfer funds from an existing IRA into it?
A. Yes! The process simply requires having an IRA trustee set up the account at the brokerage for you. The one we recommend is Entrust, who has an established relation with the brokers used by these programs. You would contact Entrust first, tell them which account program in which you wish to participate, and they will guide you through the process. There will be a small management fee that you will pay to them for acting as a trustee for your IRA. All the standard rules for an IRA will apply to your account, including those permitting transfer of funds from another existing IRA into this one!

Q. Does a managed account ever close to new investors? What if I am in the process of opening my account
when that happens?
A. Yes, sometimes a managed program reaches a limit and must close to new investors. Usually, if you have already submitted your Account Application to the broker, your account will still be permitted to join the managed program. To make sure, however, you should always fund your account as soon as possible. Many brokers will allow you to submit funds at the same time as your application, to speed up the process.
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DEPOSITING AND WITHDRAWING FUNDS

Q. How do I fund my brokerage account?
A. Most brokers accept funding by bank wire or personal check

Q. Why do some accounts have a minimum deposit higher than others, and yet the net profit history is lower than the others?
A. A lower net profit history usually comes in association with a lower history of drawdown, or lower risk of loss. The reason one might choose such an account is motivated as much or more by lowering risk, as by making profits. But because of the lower profit objectives, the account provider makes less money from their profit share and they have a certain minimum they wish to make, which they aim to achieve by requiring a higher minimum account size. It is not uncommon to see minimums of $100k, all the way up to $1 million , so what we are able to present to investors here is an exceptional set of opportunities.

Q. How do I withdraw funds from my account?
A. To withdraw funds, you simply execute a withdrawal just as you would normally from any other brokerage account, according to the procedures the broker uses. Usually this involves submitting a form that you sign requesting the withdrawal, which also specifies the means by which you wish to receive the money, such as by bank wire or check. See the brokers website for details.

Q. Do I need to keep my money in the managed account for a certain period of time to avoid penalties like
mutual funds?
A. No, there are no penalties for withdrawing from the managed account program at any time you choose.

Q. Does the trader for my managed account have access to my funds?
A. No, the funds in your Forex trading managed account are in your name at the broker. You are the proprietor of this account and the only one who can make deposits to or withdrawals from this account. The only power you grant to the trade manager for the managed program is the power to trade your account through a Limited Power of Attorney, which also authorizes deduction of the agreed performance fee/profit share ( ncentive fee) stated on the Power of Attorney.

Q. If I do not withdraw profits, do they reinvest — i.e. compound — automatically?
A. Yes, eventually profits left in your account will be considered an addition to principal, and will be factored into trade size calculations for future trades. How long it takes before they are included varies according to the period used for assessing profit share deductions and the trade strategies used in the managed program. Some account programs use cycles of trades that are interconnected, and it takes times for new funds to be fully integrated in the cycle. It could take up to a month before your profits were fully reinvested.

TRADING IN YOUR ACCOUNT

Q. Once my new account is funded, how long before it will start being traded by the fund manager, when will I start seeing trades being placed?
A.This varies according to the trade strategies used by the program in which your account is participating. Sometimes it will only takes days before you see the first trades being placed, and sometimes more than a month. As soon as your account is funded, the trade manager for the managed account sees that it is ready for inclusion in the next new cycle of trades — you need do nothing, the trade manager is automatically alerted by the broker.

Q. How do I verify the status of my account?
A. When your managed Forex trading account is opened at the broker, you are issued a Username and Password which enables you to view and monitor the status of your account 24 hours a day. Through this Login, you can view a complete history of all closed trades as well as the status of any open trades.

Q. If I have a question about trades in my account, who do I contact?
A. The broker is the main contact for all questions about your account. Because we refer a lot of clients, there are particular people in the brokerage who are most familiar with the managed program in which you are participating. In the Instructions for filling our your Account Application, we give you the direct contact information for these people. You will not have direct contact with the trader. Sometimes the broker will refer questions about the trader or trading style back to us to answer if we can, because we are familiar with the traders background. With a managed account you let the trader do the trading and periodically evaluate the results, however frequently you wish. We post monthly results here which you can also check.

Q. Can I open or close trades in the account that is being managed for me?
A. No. A managed account can only be traded by the trade manager you authorize with a Power of Attorney. You can revoke the Power of Attorney to regain the ability to place trades in the account yourself, and then it will no longer be a managed account.

Q. Can I stop my account from being traded at any time I choose?
A. Yes. To stop trading, you submit a revocation of the LPOA which originally authorized the trade manager for the managed program to place trades in your account. You submit this to the broker using the link found on the brokers web site. Their web sites are open 24 hours a day. To withdraw funds, you simply execute a withdrawal just as you would normally from any other brokerage account, according to the procedures the broker uses.

Q. Is the Power of Attorney permanent?
A. No. You can revoke the Limited Power of Attorney on your managed Forex account at any time.

Q. Will my account have exactly the same results as you post on your website?
A. Individual results may vary. The results in your account should be very close, if not identical to what we post here. Because some managed account programs have a large number of accounts participating in them, the fills obtained on a particular trade may sometimes differ a little from one account to another. It all depends upon how the software the trader uses is set up by the broker, how fast the market is moving when trades are made, the size and number of the accounts, and other factors. If your results are not identical, they may sometimes be a little better or worse, but in the long run will be extremely close to those in other accounts. Do be aware that the first month you join a program, your results will not be the same, since your account did not fully participate in trading for the whole month. With some programs, it may take up to several months for your account to be fully integrated in all the trades the program is taking. We strongly encourage an evaluation period of at least 3 months to guage the performance in your account.

FEES

Q. How is profit share/performance fee calculated? What if there is a loss?
A. At the end of the first month after your account begins trading, if there is a profit, the broker will deduct the performance fee/profit share, technically called the "incentive fee" that has been authorized on the Power of Attorney you sign when opening your account. Each month they will do the same. The incentive fee is a percentage of the net profits per month from the "watermark" of previous highs. If there are no profits in a given month, there are no incentive fees. The high equity point established after incentive fees are calculated creates the "watermark" which must be surpassed before any future profits may again be calculated. Example: you start with $10,000 in an account with an incentive fee of 40%, and during the month there is $4000 in gross profit. The incentive fee deducted would be 40% of $4000, which is $1600, so your net profit would be $2400, and your account would now have a "watermark" new balance of $12,400. If in the next month there was a loss of $1000, there would be no incentive fee deducted, since there is no profit, and your new balance would be $11,400. Your "watermark" is still $12,400. In the third month, if there was $3000 in gross profit, then the incentive fee would be calculated on only $2000 of that, since the first $1000 in profit gets your account back up to its "watermark" of $12,400. So the incentive fee would be 40% of $2000, or $800, and your net profit for that month would be $2200 (which is $1000 + $1200), and your new account balance would be the new "watermark" of $13,600 (which is $11,400 + $1000 + $1200). Standard performance fee is only 35% <$50K and decreases with higher investments.

Q. When is the monthly profit share/performance fee deducted from my account?
A. The monthly profit share, or incentive fee, is usually deducted by the broker on or near the first of each calendar month. Only the broker can say exactly what date they use, however, though generally you can expect it will be about the same time every month.

Q. I see a commission taken out on every trade — what is that?
A. Some brokers are able to offer the managed account traders the benefit of a smaller fixed spread for trades they make. To do this they must charge a small commission. It is the "price" of having a low fixed spread. In most cases this is more than offset by the additional profits that derive from the lower bid-ask spread. This is especially likely during times of greater market volatility, when most brokers widen their spreads making trades much more costly to open and close. We strive to feature managed programs that use brokers with the lowest spreads possible, and prefer those who can offer fixed spreads for these reasons.

Q. Do I have to pay taxes on profits made in a managed Forex account?
A. You are responsible for paying all taxes on your income, according to the laws of your country. Profit made in your managed Forex account is income in every classification of which we are aware, upon which taxes would be due.

MANAGED ACCOUNTS

Q. Do the owners or employees of this website manage these accounts?
A. No. We have searched the financial world to find the best managed fund traders, who offer managed accounts at the best brokers, that offer you the best returns. You open your account yourself at the brokerage used for the account program. Your account is then managed by the trader, completely independently of us. Our role is to find the best opportunities for you, gather all the information you need to evaluate them and open your own account. You never send us any money, and we play no part in its management.

Q. What are the risks involved with a managed Forex account?
A. Risks of Forex trading are described on our LOGIN PAGE. Basically the managed account program provider is acting as a trader just as you would yourself, if self-trading your account, so the same risks apply to them, and thus to you and your account, as if you were trading it yourself. You are exposed to the risk of draw down or loss in your account whether it is managed by someone else or whether you trade it yourself. Please read the Risk Disclosure statement on the Login page.

Q. How often do you introduce new managed account programs on this website?
A. We are always looking for excellent managed Forex accounts to introduce to you. However they are quite difficult to find. Sometimes we must act as liaison to get them set up with the best broker, such that you receive the best combination of profit share and minimum size to open. When we discover them, and verify them, and the account program is setup, we post them. It could be a year before we post a new one, or there could be a new one we post next week. We strongly encourage you to diversify your Forex investments between at least 2 different account programs. As we bring new ones to feature, they will offer you new opportunities to diversify.

FOREX

Q. What are the benefits of portfolio diversification, such as by opening a managed Forex account in addition to my other investments?
A. Here are some reasons to diversify.
1) Investment advisors have always advocated diversification.
2) Most investor portfolios are heavily concentrated in the stock market and or bond market.
3) Most of the 8,000 mutual funds are highly correlated to each other and the market.
4) Protecting yourself from the risks associated with investment concentration is important to your financial well being.
5) Forex is not correlated to the stock market, so it provides true diversification to lower your overall investment portfolio risk.
6) Forex offers profit/loss potential regardless of market direction, unlike some other markets (no "Bear" Market).
Do not see your question answered here? Please contact us!

 

Why Forex?

It is possible to make more than 5%-10% per year on investments, in a way that is not vulnerable to economic declines, just as it is possible to lose the same or more on your investments. Several years ago a friend of ours, nearing retirement age, began an exhaustive search for the ways people do this. He was particularly interested in possibilities accessible to someone with smaller amounts of risk capital. In his investigations he met professionally experienced financial partners pursuing the same thing, working to identify the best alternatives, and he (like many of them) gravitated toward the kinds of opportunities presented to you on this website. He has since become an investor in many of the managed programs listed on these webpages.

Below is a summary he sent to us in which he explains why he thinks managed Forex accounts deserve the highest priority consideration. Whether you have heard of Forex before or not, please stop and think how helpful it might be to your life. But the world of investing is bewildering, large, and fraught with pitfalls and lucrative dead-ends. So he found, as you will see below. Thank you for visiting this page. Also please recognize by presenting his thoughts neither he nor we are giving investment advice, and that you are responsible for making your own investment decisions and that all investments involve risk.

The Best Investments

Finally I got some retirement money. But not enough to retire soon, nor anytime in the foreseeable future! It led me to investigate what alternatives there are for investing such money. This resulted in a multi-year long project that began late in 2003. Money is an important issue and the cause of much anxiety for most of us. Here I want to share with you some of the results of my own search to find the best investments that achieve certain objectives.

My Goals

I sought alternatives that might best satisfy the following requirements. Understand that I have a skeptical view of the economy and its future, so safety is a huge factor. I believe the debt situation in the US will have a major negative influence on valuations of things, although not in the short term, and not all at once. Here are my guiding questions:

Through the course of these years I investigated practically everything you can think of, and things you may not even know about. I have consulted with financial planners, investment advisors, and done extensive financial and investment research. Add to that years of actual experience trading the markets in stocks, options, futures, and currencies, and exposure to a huge variety of advisors, account management providers, trade recommending providers, and investing/trading systems. I have considered real estate, tax liens, and similar investment approaches.

I wanted to consider everything, to leave no stones unturned, so that I could then rest easy. Because either I would find something I was satisfied with, or, I could be satisfied knowing that I looked prodigiously and it wasnt there!

The Results

MY CHOICE FOR LOW-RISK: CD Ladder at a LARGE bank (the kind that will not go bankrupt in a depression, such as Bank of America). Another alternative could be U.S. Savings Bonds (but do investigate what happens to these during a depression). A CD Ladder works like this. Rates for 5-year CDs tend to be higher than for shorter term CDs like 1 year. So you take your principal and divide it into fifths. This year you take one fifth and buy a 5-year CD. Next year, you take the second fifth and do the same. Every year you invest one fifth of your principal in a 5-year CD. After 5 years you are fully invested, and all your money is earning the 5-year CD rate. To be really really safe, you could have no more than $100,000 at any one LARGE bank, so all your funds are FDIC insured. The disadvantage to this is that if you need your money, you can only get 1/5 of it per year without paying a large penalty.

A word on mutual funds. On the whole not very many people I have come across do well with them. Some are a lot riskier than others. There are expenses associated with many of them. They are vulnerable to economic conditions. You cannot get your money out of them on a moments notice. Having said that, I do hold some in my accounts. My principal holdings are in a bear market fund, BEARX. I also have sizable portion in GLD and SLV, which follow the price of gold and silver but trade on the stock market. Check several years performance for either of these for yourself. I chose them based on balancing expected return, likely profitability, risk in the event of US economic decline, etc.

EVEN BETTER POTENTIAL RETURNS: Here is where the biggest focus of the project was for me, and the bulk of my research over these years. And, for one reason or another, practically every single option I found has been rejected because it failed one or more criteria. The criteria were:

–It not involve my time placing trades or monitoring markets
–It not be vulnerable to sudden economic news, terrorist events, corporate earnings announcements, governmental
announcements such as interest rate changes, other world events economic or otherwise
–It make at least several percent profit PER MONTH, and offer compounding (leaving the profits in the account to
increase the principal)

Generally, I found that the best possibilities for meeting these criteria are MANAGED ACCOUNTS, that have professionals who trade your account for you, who watch the markets every single moment. This way they can get you out if things turn sour. But not just any managed accounts will do, because not all markets in which they can trade are the same. The market that is open around the clock, except for weekends, is the off-exchange foreign CURRENCIES market (Forex). Foreign currencies can be traded by banks, via futures exchanges, and on Forex. Bank hours and some futures exchange hours are limited compared to Forex, which trades 24 hours a day except weekends. This is beneficial because if something happens overnight your account is able to respond to it instantly and not have to wait for the morning and potentially suffer a huge gap in the wrong direction.

How big have the profits been?

Having identified the best investment options to explore, when I considered actually investing in these, another criterion emerged as important: I wanted to be able to open a small account first, to see how it did. Then, if the account performed in a way with which I felt comfortable, I could add more money. Unfortunately, not all managed accounts offer minimum account sizes that are small enough — in fact most DO NOT — and by "small" I mean only $5,000 to $10,000 to open.

Of course the bottom-line question is what kind of returns did these accounts have in the past? The answer: 4% to 15% PER MONTH. But please realize that Forex investments carry substantial risk and are certainly not suitable for everyone. Past performance is no guarantee of future results. There are plenty of managed accounts that LOSE people money, and if you invest in a managed account this can happen to you.

Why havent you heard about these? I think one reason is that until lately, managed Forex accounts like this were offered with much higher minimum investments. Many invest in managed accounts in currencies because the modern portfolio theory calls for a portion of your portfolio in high risk non-correlated investments, and liquidity is high. Do they put all their money there? Of course not, some of it is in the most conservative investment instruments like CDs, bonds, and bond funds, etc. But now that so many people are turning away from financial advisor middlemen, private managed account providers are slowly opening their doors to the public. It is about time! In today’s financial climate, you are called upon to do your own research. My years of doing this research for myself has definitely convinced me that alternative investments like managed Forex should be considered by all.

Keep reading if you are interested in what happened next. Feel free to point other people here. Also please recognize that I am expressing my own opinions, I am not giving investment advice, and that you are responsible for making your own investment decisions and their consequences. All investments involve risk! Please read the detailed information on risk on the Get Login page and consider it carefully before considering any investment in Forex.

Best Managed Currency Accounts

The best managed currency accounts I found, with the features for which I searched — show actual NET returns that average from 4% to 15% per month or more historically. Let me be quick to remind you that past performance is not necessarily indicative of future results. To understand why I believe it is so important to consider these, let me describe Forex (short for “foreign exchange", or currency trading) in general.

Overview of Currency Markets

Currencies trade on an off-exchange market, known simply as  Forex. Off-exchange means there is no central exchange. Yet Forex is the largest financial market in the world, involving most major banks of the world, most of the worlds governments, and many of the worlds corporations and financial organizations. Compared to the US stock markets, it is 1000 times bigger.

In Forex the basic trade is the buying of one currency and selling of another. For example, the French government might decide to buy 2 billion US dollars, paying for it with 2.4 billion euros (depending on the exchange rate at the time). Later, when the exchange rates have changed, they would plan to sell their 2 billion dollars for more euros than they originally paid. They might do this if they see an economic decline coming, to hedge their governmental assets.

There are several basic reasons why I discovered that Forex represents such a good investment alternative.

Forex is more liquid than stocks. The Forex market is open and trading 24 hours a day, 5 1/2 days a week — because it is always daytime on half the globe and banks, corporations, and countries are always active in the market at any time. This means that when holding a Forex position, with a protective loss-limit order in place — when or if the markets begin to move against your position your protective order will get you out in most cases (market conditions can still occur where such orders do not fill at their prescribed price). This is unlike stocks, where you can go to sleep one night, to awaken the next morning to find your stock has gapped down and lost you additional money, giving you no chance to have saved it.

Order size is not a problem. Since the size of transactions is typically in the millions to billions of dollars, you do not usually have to worry about trading large accounts and pushing a thin market around with your trades. Because the liquidity is high, you are almost always able to get in, or get out of any position instantly. Conditions can still occur that would prevent this, though, that are common to any financial market, but in general they are less frequent in Forex.

Broker commissions tend to be minimal. The more costs you can remove from trading and investing, the higher your profit. Unlike stocks, bonds, mutual funds, commodities, and other investments, you tend to pay smaller commissions when trading in Forex. There is a difference in bid and ask rates when buying and selling, which is where Forex brokers make most of their income. Naturally this varies from broker to broker, and in some cases spreads can be widened considerably to represent sizable commissions — so broker choice is an important decision in Forex. Some brokers will add a small commission cost to transactions to offset maintaining smaller spreads. But generally because the market is so large, the spread and/or commissions are in most cases an exceptionally small amount and impacts any individual trade in only a minuscule way. For example, at many prominent Forex brokerages, the difference between bid and ask for the dollar-euro exchange is most often 1/50 of a cent.

Leverage! One of the major reasons why profit/loss potentials are higher in Forex is the use of leverage. This means that $10,000 in your account can be allowed to control as much as $1 million or more on the foreign exchange market. Now, none of the managers of accounts listed on this website uses all that leverage because the risk of loss is equal to the potential for gain. But they certainly do use SOME of that leverage. For example, if a Forex position makes a 1% profit/loss at 1:1 leverage, but you are leveraged at 5 to 1 (the maximum allowed is typically 100 to 1), then the profit/loss on your principal will be 5%. Leverage is used in other investments — such as in real estate, where you can buy a $500,000 house for only $25,000 down (your $25,000 being leveraged at 20 to 1 in this case). The maximum leverage allowed for stocks is 2 to 1, and for mutual funds, no leverage is allowed. Be aware that higher leverage also carries higher risk of loss, however – so a sound trading approach is crucial when taking advantage of higher leverage opportunities.

Why a Managed Forex Account?

How good an investor are you? If you are like me, when you look at the choices you will find they are overwhelming. If you begin to do some research, you soon find that it is very time-consuming. If you try to make your own trades, with any kind of frequency, I am sure you will have discovered how emotionally draining that can be, and how frustrating the results. There are only a small percentage of traders who are successful. Many of the best ones do it professionally.

So after a number of years (nearly a decade) of trying my hand at all sorts of investing, in various kinds of markets (stocks, options, funds, futures, and Forex), I discovered the following. The professionals are better than I am. And, I do not really like doing it. It does not give me peace of mind. My talents and fulfillments lie in other areas of life. So the optimal solution for me is finding a good professional source to manage my account for me. All I want to do is check it every so often, as I would with any other long-term investment, and make occasional deposits and withdrawals as desired.

Toward the latter stages of my investment search all my attention was upon the various managed account providers there are. From banks to large investment firms, to smaller companies and even automated systems, I looked and looked. It is a can of worms and takes a lot of digging.

Basically I found that if the provider is big — the investment managing firm that is – they are going to be way too expensive in terms of costs they pass on to me. Your net returns will be low. And I also discovered that the best account managers are snapped up by private individuals and private hedge funds. The question eventually boiled down to: how could I get in with some of these private account managers, given that I only had a small amount of money? You see, they usually manage accounts starting at $100,000 or $1 million … and what I wanted to do was open a small account (several thousand dollars) to see how it did, THEN perhaps follow it up with a little more significant money.

And the Best I Found Were …

The managed Forex account providers that had the combination of criteria for which I was searching, that are open to small investors as well as large ones, with outstanding performance records and reasonable fees, are presented to you on this website! They are available now. Please click the individual pages describing them to read more about them for yourself. Please also read the FAQs to get answers to some important questions you may have.

I suggest … that you pick one of the accounts listed here to which you are attracted. Look at the account minimum. Then pick a percentage that represents the maximum decline you might expect from the initial account size – if you were very unlucky and happened to invest at the very moment when the trader was about to experience a maximum drawdown. Maximum drawdown is the loss in your account of the largest run of losing trades that have occurred in past circumstances. Add 5% to that. Then decide that this number, say 30% or 35%, represents your UNCLE point – how much you are willing to risk losing, in order to investigate the possibility of gaining the returns suggested here by historical records.

Next look at how much you might gain if performance was even half as good as historically (remember past performance is NO GUARANTEE of future results!). Perhaps that is a continuing stream of 3 to 10% net profit per month. Look at how much profit that is over time. What would that do for your life? Or for your IRA? Then consider this: would you be willing to risk losing several thousand dollars (or however much is represented by getting to your UNCLE point) in order to see if you can access the reward of that stream of returns? Because if it is true that you can get those returns – they are quite extraordinary in comparison to the risk – wouldnt you want to investigate this sometime in your life?

I believe the generally acknowledged approach to take then would be to diversify your holdings, spreading them between the various alternatives. Would I put all my money in these? No, of course not, I still hold mutual funds, bond funds, and some ordinary money market cash. I would never put all my money in any one place, or all at just one level of risk. But I definitely am inclined to put more of it where I see the most promising combination of safety and return. And I definitely allocate some portion of it to less conservative, higher reward investment vehicles. To that end, I would recommend you to diversify funds between several of the accounts offered here.