Forex managed accounts vs. social trading networks – Suitability issues, Part 1

Forex managed accounts offered by regulated portfolio management firms are going head-to-head in direct competition with the unregulated social trading networks, with the outcome likely to have a major impact on how the rapidly growing forex industry shapes in the years to come.

Social trading network is the process when an investor connects his account to the trading signals generated by either a trader or a computer application also known as Expert Advisors (EA), whereby when the signal provider issues a buy/sell signal, the trading account of the investor mirrors or replicates the trade.

The most popular social trading network providers are Zulutrade, Tradeo, Ayondo and Currensee to name a few, with more such networks springing up at a record pace, lured by the spread markup that the social trading network negotiates with the forex brokerage where the trading is made.

Regulated vs. Unregulated

One of the key differences is that the portfolio management firm is ......

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shavasb@eurivex.com (Shavasb Bohdjalian is a certified Investment Advisor and CEO of Eurivex Ltd., a Cyprus Investment Firm, authorized and regulated by CySEC, license #114/10 with expertise in managed forex accounts. The views expressed above are personal and do not bind the company and are subject to change without notice. The comments mentioned above are not to be considered as an offer to subscribe, invest or benefit from an investment scheme, nor are to be considered as advice for trading in markets. The comments are for information purposes only and are general in nature. The examples will vary and depend on individual circumstances. Trading on margin and leverage is risky and may result in losses. Past performance is no guarantee for future performance.)