Managed Accounts - Road to Wealth or Ruin?

A managed account is where you have an account with a broker (a stock trading account, a futures trading account or a forex account) and you let someone else trade your account. In addition to the brokerage, they also extract a performance fee. This is called discretionary trading. Another term for this is a CTA managed account.

In theory, you have a professional placing the trades and managing your money, they are trading tested systems, so you can just sit back and watch the dollars roll in. Is it this good in practice, and what do you need to know before signing up?