1. This site uses cookies. By continuing to use this site, you are agreeing to our use of cookies. Learn More.

What is PAMM Account in Forex?

Discussion in 'Forex Discussions' started by painofhell, Aug 30, 2016.

  1. painofhell

    painofhell Content Contributor

    Jun 24, 2015
    Likes Received:
    Forex trust management (forex PAMM accounts) is a choice of those who just want to invest their spare money but not to get into trading themselves. A professional and experienced manager who knows how to trade will make the PAMM investments grow, therefore it is profitable.

    Forex PAMM accounts are being offered by major brokerages as well as by private currency traders. Giving preference to a management company, you should have a bigger deposit amount than when co-operating with a private trader. At the same time, a forex brokerage will offer more qualified management services. In case the trading is successful, you are to pay up to 30% commission; if not, the commission will be about 0.2%.

    Investing into PAMM account, where you entrust your funds to a private trader, implies both downsides and advantages. The key aspect you should be clear about before you entrust your money to be managed on the forex market is whether you are ready to risk your capital transferring it to somebody you don’t really know.

    Even a signed agreement won’t guarantee there won’t be any manipulation or fraud; the managing broker can easily drain your deposit to their advantage.

    What is account management on forex? This is an opportunity to make good money without putting any effort into it, simply by passing the right to operate your money to the managing company or to the trader. However, always remember that risks are high. This can be related to a manager’s lack of experience or to downright and impudent fraud.

    To avoid unwanted complications and to minimize the risks follow a few recommendations before you decide if you need a PAMM account management.

    Do not waste your time on managers promising 50-100% per month. Such guarantees cannot be given, and the operational history of such traders is likely not to exceed one month. Sometimes it happens that a trader has more than one deposit, but he will demonstrate the one with the highest profitability.

    Choose accounts of ‘respectable age’. Trustworthy is a trader with a longer experience on the market. In case his losses do not exceed 30%, this is acceptable. It is impossible to trade successfully all the time, but if a trader can overcome a difficult situation with dignity, he deserves trust and respect.

    Making choice of a manager, get acknowledged with his trading history. Examine the accounts efficiency declared by the manager.

    Normal profit distribution is 30% to 70%. The manager receives 30%, you get the rest. Some ask for a half, and if the manager meets your requirements, in the course of business payment terms can be reviewed. If you’re lacking experience to analyze the performance and reliability of the trader, refer to the professionals before you choose the manager.

    The risk level is to be stipulated in advance and specified in the contract.

    After choosing the manager, you must contact him in person. If it is not possible to do so, use any messenger program to communicate. You are hiring an employee, who will get paid for managing your money, so the choice of the ‘worker’ should be well-warranted. Personal contacts cannot be underestimated.

    And, what’s most important, only you should have direct access to your money! The trader should not be able to withdraw or deposit funds. If the agreement is violated by him, block the access by changing the password. Managers disapprove of investors’ trading efforts or tampering with the process, so, although you have all the rights, use them only on some occasions, for example, if the manager has failed in trust.
  2. Sharon Higgins

    Sharon Higgins New Member

    Oct 29, 2014
    Likes Received:
    It’s nicely explained what PAMM account is, I believe mostly our attempt should be to have ability to manage things on our own, but if we feel that we really can’t work it out then only we should opt for PAMM account. I have always found trading manually better, but I do like PAMM and use it for my other account and thanks to this http://alpari.com/en/investor/pamm/about/, I was able to understand how it works and since then I have been using it and it’s working very nicely for me with stable profits, but we obviously need to select right person which can be done through checking ratings.

Share This Page