PAMM – Percentage Allocation Management Module
Estimated Reading Time: 4 minutes
Large Forex brokers provide platform where money managers offer their PAMM (Percentage Allocation Management Module) to you. In short, PAMM is Collective Fund meaning it’s a Managed Account, or a sort of mini-version of a mutual fund for mainly Forex trading. You choose the specific PAMM account to generate profits for a predetermined commission.
- Safety – It’s a collective fund but the trader can’t withdraw your money but only trading in the broker, so your money is basically scam free.
- Low Minimum – threshold of managed account with dedicated trader is very high like over $100,000 but PAMM may start with $100.
What’s PAMM All About?
PAAM (Percentage Allocation Management Module) is actually a software application, which is primarily used by foreign exchange (Forex) brokers to allow their customers to attach cash to a particular trader managing one or more accounts, appointed on the base of restricted legal powers a.k.a. Power Of Attorney such as below image;
The PAMM solution enables the trader to handle infinite amounts of managed accounts concurrently on one trading platform. Each managed account has its own PAMM ratio, depending on the amount of the payment. The outcomes of trade activities (commerce, profit and loss) are assigned according to the proportion between the managed accounts.
How PAMM Works
A money manager trades on his PAMM account using his private assets ($300) as well as his investors ‘ funds ($100 from Client 1 / $60 from Client 2 / $40 from Client 3) in the below example. As said in the previous section, this money manager & 3 clients are contracted through POA. The money manager can trade the clients’ fund but can’t withdraw it.
If the manager in the graph above continues to trade on his PAMM account using their private assets as well as their investors ‘ funds.The better their place in the ratings outcomes from the trading of the manager.
The quantity of money on the PAMM account rises if the manager earns a profit and the profit is spread between the manager and the shareholders depending on the quantity of their original assets. If the profit produced 200% and the balance of the account had increased to $1,500 in our instance, the new fund balance for the manager & each client would be as below;
In compensation, the investors pay the manager some of their profit specified in POA. In this example, the compensation of the manager is 50% of the profit of the investor as below;
How To Find The Best PAMM Money Manager
to analyse all about PAMM including the methods to identify the Best PAMM account, Visit;
PAMM Investment Ultimate Guide – 7 Secrets To Find The Best Account
PAMM Account Provider
There several PAMM account providers (mainly FX Brokers), some of them are;
Among the top rated providers, Alpari gained the highest reputation (they are supposed to invent PAMM system).
We plan to review Alpari & a few other key PAMM brokers in due course.
PAMM – Percentage Allocation Management Module is the 2nd of 3 Passive Trading, the others are;
Lastly, you may be skeptical about trading Forex PASSIVELY, then suggest you first read the below report;
【 3 Practical & Safe Ways To Succeed In Passive Forex Trading 】 , which gives you good insight on how it works.
Publisher – GEM (Global Extra Money)