PAMM account is a special account for Forex trading. The specificity lies in the fact that the trader who opened it has the opportunity to add to the trading turnover the funds of everyone who wants to passively participate in trading. This is an original service with which investors can earn without trading.
The PAMM account system is the process of distributing profits between account managers and investors in proportion to the amount of invested capital.
Investment of money and their redistribution is carried out automatically. The investor only has to sign a document - a user contract, which notes the conditions for the use of funds. For managing the account and money, the trader has the right to calculate the commission from the profit, the percentage is prescribed in the contract.
Advantages of PAMM-investment
There is no other tool that gives such a high profit as a PAMM account. It is the high income that is the main advantage of such investment.
Investments in PAMM accounts provide access to Forex. It is known that the daily turnover of Forex is $ 5 billion, and the daily turnover of the stock market is $ 400 million.
To understand the scheme of investing money in PAMM is much easier than to master all the subtleties of trading, and even more so to understand the principle of earning in the foreign exchange market.
The special advantages of PAMM accounts can be safely attributed to their ubiquity. Anyone can invest in this asset. To do this, you only need to find a broker who opens PAMM accounts, and transfer money to the account manager.
The undoubted advantage of PAMM accounts is a fairly low initial investment deposit. The down payment may be different, but you can find such PAMMas in which the minimum equity capital is only from $ 30. This is modest money, and many can afford to invest such funds.
The last pleasant moment: you can put money on the account at any time and they start working immediately. You can also withdraw funds at any time. This is a guarantee that the depositor will not lose finances during the period when the account manager will be in the red.
Which PAMM account to invest in?
For a deposit in a PAMM account, it is important for a novice investor to know some simple rules:
- It makes no sense to analyze transactions on a PAMM account for a period of 1-3 months, since this is a relatively short period: for a full analysis of the trading technique used by the account manager, the indicative period of work on Forex is six months.
- The average monthly yield of a PAMM account of 10–20% is the main indicator when choosing a PAMM platform for investment.
- Profitable transactions should not be less than 60%, unprofitable - no more than 40%.
- The permissible value of losses is considered to be a value not exceeding 5% of the amount of replenishment of the PAMM account.
- If the investor is not familiar with the managing trader, and his experience in Forex can be judged only by the PAMM account, it is better to give preference to those accounts that are open and function on real money for more than a year.
Risk-free investments are made on safe and well-known PAMM platforms, where there are no complaints about delays in the input-output of finances.