What is forex pamm account

PAMM — it is the abbreviation for P ercent A llocation M anagement M odule account is intended to raise investment capital for management by Forex trader.

Nowadays investing in PAMM accounts is one of the less risky ways of earning passive income online. The idea behind the PAMM account forex for traders: The idea behind the PAMM account forex for investor: Investing in PAMM accounts is available in an automatic mode.

Profits and losses are allocated among investors and PAMM manager according to the percent defined by the manager in PAMM manager offer. Simply speaking, the offer is an agreement regulating relationships between investor and PAMM manager.

Percent allocation management module - Wikipedia

The profits or losses resulted from a trading activity of PAMM manager are allocated between investors in proportion to their percentage share. Trader opens a special PAMM account. Investor checks trading results of the trader with a system monitoring PAMM accounts held with a brokerage company or any other system, analyzes terms set in the offer and then takes a decision to invest.

The trader performs trading transactions. Funds of the trader and investors are used in trading: In the given case you need to set the maximum loss limit if the feature is available with your broker or to monitor your account.

You should make use of opportunity of early withdrawal of your funds if it is allowed by the terms defined by your broker in case of increased risk.

Profit gained by the trader is proportionally allocated between PAMM account participants. After we have dealt with what are PAMM accounts, a reasonable question arises: However, there is a series of general criteria and filters that facilitates selection of reliable PAMM accounts.

I think it is the most important criterion of the selection.

The first reason for thinking so is that it excludes the possibility of a plain luck of PAMM manager. The second reason is that an account having a long history is amenable to more deep analysis. New PAMM accounts opened by proven PAMM managers can be regarded as exceptions; at that, history of their old accounts should be also analyzed.

les comptes PAMM

After you have filtered accounts by their age, you should filter them by maximum drawdown criterion, if possible. This is the very same criterion that gives you a clear idea about risks, to which funds of investors are exposed during investing in PAMM account.

You should consider potential profitability criterion only after you have filtered PAMM accounts by their age and maximum drawdown level.

How Forex PAMM Accounts Work | Investopedia

Selection of accounts by their profitability depends on an individual approach of investor. In my experience, accounts, where ratio of maximum drawdown to profitability is not higher than 1: You should pay your attention to equity of PAMM manager , while selecting a PAMM account.

It is obvious that the higher is equity value, the more own capital PAMM manager risks during trading. The logic behind it is fairly simple: In our Forex brokers List you can find PAMM brokers you need use Advanced search filter.

We recommend you these Pamm brokers:. Alpari This was first company provided PAMM service.

PAMM: extra income for professional traders - FIBO Group

The main problem of the PAMM accounts system is that investor is not aware of who manages his capital in particular. There is a partial solution of the problem involving an openness of Forex trader: This is a clear explanation of PAMM accounts, if in need of some proof reading for missing conjunctions.

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