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Metatrader Forex Broker

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Forex Managed Account Report

Learn how to trade various forex accounts from a single platform without any
administrative or compliance issues.

Managing Forex Trading Accounts

Forex Basics

Organizational Structure

- CTA

- CPO/ Hedge Fund

Forex Basics

PAMM & LAMM Accounts

- LAMM

- PAMM

Forex Basics

Fee Structures

- Performance Fees

- Management Fees

- Commissions

- Combination Fee
  Structures

Forex Basics

Registration & Compliance

Forex Basics

Platform

Forex Basics

Marketing

Forex Basics

Conclusion

Commissions

Another way to charge your investors is through a cash commissions. Because there is such a high amount of regulatory scrutiny over forex commissions it is imperative that this commission is predetermined with the investor at the inception of your business relationship. Basically the investor must sign off on the POA that he understands that he is paying a commission and that he understands the conflict of interest associated with the commissions.

The way that the commission model works is that the investor pays you a set amount for every standard lot that is traded on his sub account. For example letís assume that you have a master account of $100,000 consisting of 2 sub accounts with $50,000 in each sub account and you charge your investor a cash commission of $10 per standard lot round turn trade. Letís say that throughout the month you traded 100 standard lots. This means that you will receive $1,000 in commissions for your trades. This money will be debited from the accounts of the investors and will be credited into your account. The debiting will happen based on the percentage of the master account that the sub accounts make up. Since in this case its 50-50 half of the commissions ($500) will be debited from the first account and the other half will be debited from the second account. If it was a 60-40 split, the first account would be debited $600 and the second $400.

The cash commission model is one that is typically preferred by money managers that trade more frequently because they get paid regardless of performance, just for making trades. Money managers that trade less frequently typically prefer the performance fee.

I am sure that you can imagine that the cash commission model causes a great conflict of interest between the investor and the manager. With this model the manager has the ability to simply churn through the account by making trades regardless of their success. As a money manger, if you decide to use the commission based fee structure it is imperative to prove to the investor that you will not do this to their account.

Managing Forex Trading Accounts   Managing Forex Trading Accounts
Forex trading involves significant risk of loss and is not suitable for all investors. While you can earn a cash bonus,
you can also lose money due to the inherent risk of trading. Read full disclosure.

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