Below you will find a list of Forex Brokers that provide an opportunity to open your own PAMM-account or choose one from the pool and invest into it. The Percentage Allocation Money Management (PAMM) is a form of integrated trading in exchange markets. You can either become an investor or money manager. The service is designed to benefit both sides. Some traders make profits from utilization of third-party capital, others allocate their funds and just monitor trading activity and check outgoing results. Thoughtful compilation of PAMM investment portfolio and its accurate maintenance may ensure good profitability and continuous capital increase.
A PAMM forex broker is a brokerage platform that offers the passive investment model in forex that is known as the Percentage Allocation Management Module (PAMM). This is essentially a fund management system in forex which requires that the managing partner has a vested interest in the fund being managed. Essentially a PAMM account is setup by an individual who must generate sufficient profitable trading history. Based on this history, this individual can use the PAMM forex broker’s engine to make a call to other investors that have the funds but not the time or the skills to trade, to contribute money to a pooled fund for a share of any profits that accrue from the fund after a trading cycle is completed. All pooled funds are usually managed from a single PAMM account.
Profits and losses are shared in the same percentage as the pooled fund contributions from all investors. In addition, the manager of the fund (i.e. the one who trades the PAMM account actively) is entitled to a performance fee payment from every investor in the PAMM account fund.
The PAMM system begins with the active trader that opens the PAMM account, commonly referred to as the Master or the Manager on many PAMM account broker platforms. The Manager will first assign some capital and commit it to a trading process for a period of time, to show consistency and profitability.
Once some profit history has been generated, the Manager will put out a proposal inviting investors to place funds with the PAMM account to benefit from his/her trading strategies. Payment cycles are decided, ratios are apportioned according to the equity stake of each investor in the fund, and the compensation of the Manager from each investor’s profits is also decided. These are all referred to as the Offer Parameters. Once the offer parameters are all settled, trading can begin.
Just as is the case with copy trading, there will usually be a lot of traders who advertise their services as potential managers of PAMM accounts. However, only few will be suitable PAMM managers. Therefore, a PAMM forex broker should be able to provide a solid ranking system that will enable investors to seek out the most suitable PAMM account managers for their business. The PAMM forex broker should also be able to provide a system that effectively ranks the performances of traders seeking to manage PAMM accounts.
The PAMM Account Ranking refers to the systems used by PAMM forex brokers to rate the performance of active PAMM accounts. The rating system is usually based on performance over time. Ratings will display the best performing PAMM accounts, usually in descending order. Parameters that are used in the ranking system include the following:
The ranking of the best Managers is not static, but changes according to performance changes.
For a potential PAMM investor, it is not enough to have the trade data mentioned above from the PAMM account. You would also want to know how investors are doing with various PAMM accounts. Therefore, a PAMM forex broker should be able to display the following information for PAMM investors:
Depending on the PAMM forex broker, there may be provisions for more comprehensive analysis of PAMM accounts which will allow potential investors to get all the information that they need to make an informed choice.
Another aspect of the PAMM account system is the referral system, which allows those who refer investors to the PAMM forex brokerage system to earn from their affiliate work. Not all PAMM forex brokers will offer an affiliate system for this facility.
As the PAMM account system brings together different people who hardly know each other on a personal basis and therefore can make no guarantees on the honesty or trustworthiness of one other, it is the responsibility of PAMM forex brokers to ensure the safety and security of funds of all participants. Therefore, PAMM forex brokers generally have the following rules in place:
The list above shows a catalogue of PAMM forex brokers that we have assessed and found suitable for use by our readers. They are suitable for traders who want to become Managers of the pooled funds and also great for Investors who are looking for where they can get allocated returns in a safe and transparent setting. Are you an affiliate looking for how to earn from referring Investors to the system? Some of these brokers provide affiliate payouts for PAMM account referrals as well.
This is a service that has the potential to benefit you in three ways. Feel free to make a choice from the PAMM forex brokers that are listed above and enjoy the best that percentage allocated money management has to offer.