Today, I want to reply to all of my followers and some who have read about my trading techinques. Some have been asking me if they can invest in me. I want to be very categorical here, I DO NOT accept such requests with some few reasons I will highlight here.
- I am not licensed to hold investor’s money
- I do not like unnecessary pressure from investors side.
- I am not a hedge fund.
With the few reasons of why I dont and am not even planning to do so, do not lose hope as I am going to explain to you other ways you can still invest your money to earn a living either as an investor or fund manager.
Many brokers have been offering those services for a long time now as they realized that some people have the money but they do not know how to make more from online forex trading. Others are very good traders with have decent wins and powerful forex trading strategies, but they do not have money to invest. Am I talking to? Are you the one who have been searching, “What is a PAMM account and how does it work?”
Relax! You are now going to know what is a PAMM account and how it works. You are also going to learn more from the best broker I recommend for PAMM Program services .
Percentage Allocation Management Moduleis also known as a PAMM account. This type of forex broker service enables several individual trading accounts to be pooled together and a trader is able to engage in forex trading with a purpose of profit generation.
A PAMM account involves three main players:
- An investor
- A manager
- Forex broker
Investor: This is an individual who is interested in forex trading and puts his/her money into the PAMM account.
A manager/ Trader: This is an individual who has the expertise in forex trading and is able to make sound decisions with regards to how one is able to maximize the investment to get a profit out of the trade.
Forex Broker: This is a firm through which traders are able to make trades through for example HotForex broker
A forex broker should provide an environment that is safe and reliable for traders and investors to interact.
A forex broker should also be able to follow all the set regulations that manage forex trading
A forex broker should be able to keep accounts, facilitate withdrawals and also take deposits.
How to Become a Fund Manager/ Investor
It’s easy to become a fund manager. One can follow the following steps;
- Try as much as possible to be participating in demo account contests. This will help you be conversant with forex trading and build your confidence.
- Engage yourself in live account contests as this will help you build critical skills in making important decisions during trading
How does a PAMM account work?
- A trader/ manager has to have a PAMM account where he/ she has already allocated their initial investments. One of the conditions for operating a PAMM account by the manager is that his/ her investment cannot be withdrawn as they face being unlisted from the active PAMM rankings. This serves as an incentive to the manager to trade carefully.
- An investor who wants to invest in the PAMM account searches for a reputable forex broker that engages in PAMM trading.
- Once the investor settles on a manager, they put their investment in and the manager starts trading.
It is worth noting that profits and losses are divided between the investors and the fund manager based on the share in the account.
Advantages of PAMM Accounts
- A skilled trader may get profits from good management of his own funds and also from an investor’s funds.
- An investor is able to spread risk by allocating capital among different PAMM accounts.
- There is ease of investing when using PAMM accounts as one can use various PAMM managers within a single service.
- An investor is able to get access to any PAMM manager’s equity due to PAMM brokers. There is also that security of a PAMM broker’s investment being part of the pooled resources hence trading will be done not only to the benefit of the investor but also the manager’s benefit.
- An investor’s capital is not at risk of being withdrawn by a PAMM manager as they are under a broker.
- Factual information about a PAMM manager is provided by a PAMM broker. A PAMM broker provides trading statistics of a PAMM manager. This is made possible by having easy to use search services and appropriate filters and this takes a short time to get information about any PAMM manager that one would want to use to invest.
Disadvantages of PAMM accounts
- The investor is not able to study the trading style of a PAMM manager due to the closed nature of the PAMM accounts system.
- The trading skills of a PAMM manager is very important. If a broker doesn’t advice the investor to set a maximum loss limit, then an investor can loose 100% of his investment.
Need a PAMM investment Manager?
This a step by step criterion that can help you, an investor, in choosing a suitable manager to manage your PAMM account.
After checking the ratings of a PAMM broker, the following can also be important in selecting a broker and manager to invest your capital.
- Age of a PAMM account
It is important to check on the age of a PAMM manager in terms of the account age. This will show you that the PAMM manager has gathered some experience in PAMM account trading. However, new PAMM accounts opened by managers who have a history of proven trading can be exempted from this.
- Maximum Drawdown
The drawdown criterion is a very important factor that can assist you in selecting a PAMM manager. This will shed more light on how a PAMM manager/ broker takes risks with an investor’s funds. It is advisable to look at accounts that have a drawdown level that is not above 40%.
The investor should also take into account the profitability of a PAMM account. One should base their profitability criterion by also looking at the account’s maximum drawdown criterion.
- PAMM Manager Equity
An investor considering to invest in a PAMM account, one should look at the equity of the PAMM manager. A higher PAMM manager equity value the more capital risks during trading by the PAMM manager. It is advisable that the equity of a PAMM manager doesn’t go to less that 10% of the total investment.
- Investor’s Equity
The larger the amount of funds being managed by a PAMM manager the more the investors and this translates to the confidence of the investors they have in the manager.
There are several firms that engage in PAMM trading. As you have noted from other blogs, I only recommend a broker, app e.t.c or anything that I have some experience in. You are free to comment on any other that you think is good for my followers. You can visit my first choice Forex PAMM Broker
Using PAMM accounts to trade, investors benefit from profits with very minimal involvement as they already have managers who will engage in forex trading on their behalf. This will leave them with more time on their hands to engage in other activities.
I love that you are curious and that you are checking out this page right now. You know me, I love to help and teach aspiring traders something new! You will see throughout the website and in my blog posts links that go to outside sources (other websites and services).
These links may be what is referred to as an affiliate link which means I could earn money if you end up clicking on one and purchase/sign up for that service/product. If I am sending you to an outside source know that it is only because I have tested it myself and believe in it. I am all about sharing my recommendations and providing you with the best service/product and even excellent support.
The money earned through my affiliate links is just another way for me to earn a little extra income so that I can continue doing what I love which is helping aspiring traders with the right resources. If you choose to purchase something through me and use my affiliate links it is greatly appreciated and I thank you!
“I Wish You Well In Your Journey & In Your Trading.”-