PAMM-account is a unique way to earn in the Forex market without having special knowledge and skills, which allows you to get income from several tens to several hundred percent per annum on the invested funds.
You, as an investor, use the rating to independently choose one or more managers and get an opportunity to increase your capital without taking part in trading on the Forex market.
Advantages of the PAMM-account.
• high profitability;
• full control over investments;
• automatic distribution of profits;
• the possibility of investing in several PAMM-accounts;
• the ability to replenish the account and withdraw funds at any time;
• rating of PAMM-accounts with different criteria for selecting the Manager;
• The remuneration to the Manager is paid only from the profit, and the income of the investor is often several times higher than the bank interest.
Choosing the right broker and PAMM-account will help how to multiply the capital, and save the mass of nerve cells. The choice algorithm is at first glance uncomplicated, but to take into account all the subtleties and evaluate the potential of the manager, having predicted his (future and your) future income, in practice it is not easy.
Choosing a broker.
The main criteria for choosing a broker:
The existence of the company is at least 3-5 years old, the availability of licenses for brokerage activities, the activity is regulated by the CROWFM (Commission for Regulation of Relations of Financial Market Participants).
Availability of offices in different regions, the size of the client base, conducting training seminars, the possibility to use a demo account, the functioning of a private forum, information about leading employees and founders of the company.
The more contacts you offer (physical address, phone numbers, e-mail, skype, online chat, your own forum) and the more adequate the employees of the company, the safer and more secure your cooperation becomes.
Selecting a PAMM Account.
One of the fundamental factors of your success in the investment market is the correct choice of the PAMM-account. What to look for when choosing:
In a short period of time (3-6 months), managers can show fantastic results. Choose an account whose life is at least not less than 9 months. This is the period of time for which you can learn how a trader trades, how successful he is, is disciplined and adheres to his strategy.
Loading a deposit.
Normally, the deposit must not exceed 15-20%, a maximum of 25%. If the trade shows jumps, for example, up to 80-90%, it means that the trader is not very disciplined, goes to increased risks. A short series of losing trades can lead to premature parting with the deposit.
The level of deposit drawdown.
It is necessary to look at how large the drawdowns were, how long and how long the manager came out of these drawdowns, whether there were similar drawdowns in the past, how large were such drawdowns. If before that the maximum drawdown for the day was 10-15%, which is quite normal, but suddenly there was a drawdown of 40%, then this is an occasion for serious reflection.
Profitability in the last 2-3 months.
If a stable increase in deposit is observed lately, therefore the trader’s strategy works, and it makes sense to invest in this PAMM-account. It’s another matter, if in the last 2-3 months the deposit is reduced, in this case it is reasonable to wait and see the development of the situation.
The manager’s own capital on the PAMM-account.
Very important indicator. The more it is, the more responsible the manager will be in relation to management, since most of his own funds are involved in bidding. In an authoritative and experienced manager, personal capital, as a rule, is measured in several (and even tens) thousands of dollars / euros.
Be sure to study the conditions of your potential cooperation: the percentage distribution of profits, the possibility of premature withdrawal of the deposit, etc.
Feedback from real investors.
When selecting, it is necessary to take into account the investors’ feedback on the Pamm accounts you have chosen, which you can find on the Internet or at the company’s forum. On forums, you can catch even the human factor, for example, to see how the manager communicates with his investors and answers their questions.
Investment activities of any kind are based on the distribution of risks between several financial instruments, otherwise this is not an investment, but a game of roulette. This principle is the essence of the diversification of deposits.
It should be noted that there is no proven formula for diversifying deposits in the PAMM-account. As practice shows, enough to successfully invest at least 5-6 PAMM accounts.
When compiling the PAMM portfolio, one important indicator should be taken into account – aggressiveness of trade. This parameter is calculated on the basis of the maximum daily profit and the maximum daily losses. Information on the aggressiveness of the PAMM-account is in the “Indicators” tab of the PAMM-account monitoring.
All PAMM-accounts can be divided into three categories: aggressive (the indicator is 4 or 5), moderate (the indicator is equal to 3), conservative – (1 or 2). When designing your portfolio, consider this factor and your investment objectives, as well as the level of risk that you can afford.
There are a sufficient number of managers who conduct their business really at a high and professional level, with a healthy psyche and do not expose their investors’ capital to extra risk.
PAMM portfolio management strategies.
In practice, there are only two strategies: passive and active.
Passive strategy is more focused on long-term investors. With this option, the investor chooses only the entry point to the PAMM-account, puts a limit on losses and periodically revises his portfolio, introducing into it, if necessary, some adjustments.
An active strategy is more suitable for investors with a speculative mood and involves selecting both entry points into each PAMM account entering the portfolio and exit points from them. Here, the investor tries to catch the forward movement of the price and immediately exit, having earned his profit.
How to invest in a PAMM-account.
• Register in the Personal Area.
• Open a managed account and deposit funds.
• After reviewing the rating, select a PAMM-account.
• Invest funds in the PAMM-account you have chosen and … make a profit.
General recommendations when investing in a PAMM-account.
убедитесь Before investing, make sure that you fully understand what risks the operations in the foreign exchange market entail, taking into account your experience and level of knowledge in the financial sphere. Do not pursue excess profits!