Trying to introduce a newly minted investor to the forex marketplace can be quite challenging. Unlike standardised stock exchanges, the world of foreign exchange is a dynamic, round-the-’clock affair, filled with a sophisticated array of strategies and tactics which contain their fair share of risk and reward. In today’s investing environment, there are two predominant forms of forex trading, those being online forex software and broker-managed forex accounts. Depending upon your previous experience with forex and your level of interest in the day-to-day workings of your forex holdings, each of these two forms of trading may be a perfect match for your needs. With that in mind, we’ve taken the time to outline the key differences between these two platforms in order to help you determine what your next steps should be.
On a very basic level, the primary difference between a broker-managed forex account and online forex software is the level of oversight by investment professionals. As could be expected, broker-managed accounts are managed exclusively by a seasoned foreign exchange broker. In exchange for expert-level advice, casual investors will be required to pay their broker through either a commission basis or recurring fee. Although this will likely reduce profits over time, it’s important to note that the overall gains secured through this form of collaboration may exceed those obtained by a casual investor with little to no knowledge of the forex marketplaces who chooses to manage their own account.
For those who feel very comfortable with the fine details of the forex marketplace, forex online software will likely prove to be an excellent alternative to a broker managed account. Using forex online software, investors can access virtually all of the data that brokers rely upon to make their strategic decisions for clients. Although investors who choose to rely on software instead of a broker will likely be unable to solicit advice from investment professionals, they will also be the exclusive recipient of their profits. This is a significant advantage which will most appeal to those with extensive experience in this marketplace.
Regardless of where you may find yourself in the process of determining whether to hire a broker or become your own day trader, it’s worth taking the time to download all available trials of forex online software so that you can better assess the current state of the industry. We wish you the best of luck in your investment endeavours!