Forex PAMM Account: A Shortcut to Forex Investment

Although Forex trading offers a huge opportunity, it takes a lot of time and effort, and succeeding in it as a Forex trader is not as simple as it looks. Many traders lose their money in the blink of an eye because they do not properly educate themselves on Forex. For that reason, it is highly recommended that new traders take their time and learn Forex trading from scratch.

Nevertheless, not everyone has that kind of time to carefully learn a complicated topic such as Forex due to their busy schedule.

There is, however, a shortcut for new traders who want to invest in the Forex market without having to learn all of its complicated details, i.e., the Forex PAMM Account Investment.

It may seem that the PAMM Account investment trading is similar to the Forex copy trading program, but PAMM was the pioneer even before copy-trading and is entirely different when it comes to details. Later we will find out the differences by understanding how the Forex PAMM Account investment works.

What is the Forex PAMM Account?

The Forex PAMM Account is a breakthrough in Forex trading that offers a shortcut for new traders to immediately join the FX market without having to spend too much time learning the complicated details.

The term “PAMM” stands for Percentage Allocation Management Module. It is a form of pooled funds investment trading in which new and professional traders join hands and work as a team to gain mutual benefits and earn more revenue.

There are three essential parties in the Forex PAMM Account investment, namely the PAMM Investor, PAMM Account Manager, and PAMM Forex Broker. Let’s look into them one by one.

1. PAMM Investor

Joining the PAMM Account as an Investor is suitable for new traders who wish to invest in the foreign exchange market but have no spare time to start learning Forex trading from scratch.

The PAMM Investor is the one who invests in a selected PAMM Account Manager via a trusted Forex broker. Once the Investor finds the best PAMM Account Manager with an excellent trading record, all he needs to do is to open an Investor account and invest his capital in the Manager’s PAMM Account. After that, he can simply sit back, relax, and enjoy his coffee while the Manager performs his Forex trading mojos.

Later on, when the Manager’s strategies are successful and the trade results in profits, the PAMM Investor will gain profits depending on the amount of his investment. Afterward, the PAMM Investor is required to pay a certain amount of performance fee to the PAMM Account Manager for the services rendered.

2. PAMM Account Manager

As the name suggests, a PAMM Account Manager is the one who manages all the money invested in the same PAMM Account, including his own. The Manager will be responsible for formulating the best trading strategies, which will determine the result of all the money involved in the PAMM Account. If his strategies work well, everybody would win; however, if his strategies fail, both the Manager and Investors will sustain a loss.

After the Manager successfully closes the trades with the right strategies, the profits will be divided according to the percentage of funds invested in the same PAMM Account. He will also gain additional income from the performance fees paid by the Investors for his managing services.

The PAMM Manager can usually create his own trading proposal on his own terms. He can set the minimum investment amount required for the Investors, as well as the amount/percentage of performance fees he will receive for his successful trades.

The role of a PAMM Manager is more suitable for professional traders with years of experience. PAMM Managers must truly understand how the Forex market works since they are responsible not only for their capital but also for other investors’.

3. Forex Brokerage Company

Forex Brokers provide the trading services and platforms for both PAMM Investors and Account Managers so they can conduct their transactions in a safe and secure environment.

They facilitate all the trading needs of PAMM Investors and Managers, such as account keeping, deposits, withdrawals, and related activities within the scope of their responsibilities.

Since Forex brokers play a huge part in keeping the transactions safe, PAMM Investors and Managers should carefully select the most trustworthy and regulated Forex brokerage companies.

How does Forex PAMM Account work?

A Forex PAMM Account is a single trading account shared between the PAMM Investors and the PAMM Account Manager.

Usually, the PAMM Account is under the Manager’s name. The Investors are to look for the right Manager with the best trading performance and invest their money in his PAMM account.

Once the PAMM Investors and the Manager have invested their money in the account, the PAMM Manager will manage all the available funds by formulating the best trading strategies. Later, when the trades are closed successfully and result in profits, both the PAMM Investors and the Manager will share the profits based on the percentage of their invested funds.

When the profits are calculated and divided, the PAMM Investors are to pay a performance fee to the Manager in exchange for his managing services.

Example:

Two Investors decide to invest their funds in a Manager’s PAMM Account.

Investor A invests 1,000 USD
Investor B invests 750 USD

At the same time, the Manager invests 250 USD of his own money in the same PAMM Account, and they all agree to a%10 performance fee.

The Manager then uses all the available funds (2,000 USD) in the PAMM Account and formulates the best strategy to get the best possible results. Later when the Manager’s strategies succeed, the PAMM Account gains%100 in profits, or 2,000 USD, resulting in a 4,000 USD balance.

At the end of the trading session, the available profits will be shared between the Manager and the Investors according to their percentage of allocated funds in the PAMM Account.

After the profits are divided accordingly, a 10% commission will be deducted from the Investors’ profits in exchange for the Manager’s services.

Investor A = 10% from 1,000 USD = 100 USD
Investor B = 10% from 750 USD = 75 USD

Therefore, the final balance for the Investors’ and Manager’s accounts will be as follows:

In the Forex PAMM Account, unlike copy-trading, all the funds from the Investors and the PAMM Manager are pooled into the same PAMM Account and then controlled by the Manager.

When the trading starts, the Investors will not be able to withdraw their funds from the account or stop the trading halfway. They can only monitor the PAMM Manager’s activities in the PAMM Account via the broker’s platform.

If they want to add or reduce the amount of their investment, they should submit a request to the Manager so he can do it for them. After all, only the Manager can change the PAMM Account’s trading terms.

Following the request, the PAMM Account Manager will face the same level of profits and risks as the Investors. So he can prevent the Investors from making rash decisions since his funds are pooled in the same PAMM account.

Best PAMM Accounts Forex Brokers

One of the most crucial steps in the Forex PAMM Account investment is choosing the best Forex brokerage company that can provide PAMM Account investment services with the best trading conditions.

You need to make sure that your Forex broker is fully licensed and regulated by trusted major regulatory agencies. You should also find out if the brokerage company can 100% guarantee the safety and security of your money and account information.

To that end, we have provided a list of regulated Forex brokers that offer Forex PAMM Account investment services with the best conditions.

Alpari PAMM Account

Alpari with 22 years of experience in the FX industry is one of the pioneers in Forex PAMM Account investment services. The company is licensed and regulated by the FSA of St. Vincent and the Grenadines and a member of the Financial Commission. Alpari offers two types of Forex PAMM Investment services, namely the PAMM Account and PAMM Portfolio.

At Alpari, PAMM Investors will be able to dedicate a minimum investment amount of 50 USD or 50 EUR (or depending on the Manager’s proposal). They also have to maintain a certain amount of balance (or according to the Manager’s proposal). If the remaining balance is less than the required amount, the account will be automatically closed.

Alpari PAMM Managers will be able to create a PAMM Account using all the available investment accounts, from PAMM Standard MT4 to PAMM ECN MT5. The maximum commission a Manager can receive is up to 50% of the Investor’s profits for the PAMM Account and up to 35% of each PAMM account included in a PAMM Portfolio.

The Alpari PAMM Standard account is available to Managers on MT4 and MT5 trading platforms with a minimum of 300 USD/EUR for public accounts and 100 USD/EUR for private accounts. They can benefit from maximum leverage of 1:3000 using multiple trading instruments, including 33 currency pairs and 2 metals.

For the Alpari PAMM ECN account, the minimum required capital for the Manager is 300 USD/EUR on MT4, and 500 USD/EUR on MT5 for both public and private accounts. The Alpari PAMM Pro ECN MT4 Account Manager requires a minimum capital of 500 USD/EUR for both public and private accounts. These accounts offer a maximum leverage of 1:3000 and various trading instruments, including 46 currency pairs, 2 metals, and 18 CFDs. Moreover, the Manager is to pay a 16 USD commission for the Alpari PAMM ECN MT5 and Pro ECN MT4 Account.

👉 Join Alpari PAMM account | 💡 Alpari Malaysia Review | 👍 Alpari PAMM Copy Trade Review

FPMarkets PAMM Account

The Australian brokerage company, FPMarkets, is licensed and regulated by the ASIC of Australia and offers Forex PAMM Account investment where the Money Manager will be able to choose his own trading conditions such as commissions, spread mark-ups, account currencies, performance fees, and margin call.

FPMarkets also offers a low commission structure with tight spreads as well as easy deposit and withdrawal services at any time. At FPMarkets, Money Managers can activate the PAMM Account investment service on all the available trading accounts with no restriction on the number of accounts or amount of deposits.

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HFM PAMM Account

HFM, as an award-winning Forex broker, is licensed and regulated by multiple regulatory agencies, including the FCA of the UK, DFSA of Dubai, FSCA of South Africa, and FSA of Seychelles.

At HFM, Forex PAMM Account investment is offered using a high-water mark principle, which is a security system used to prevent PAMM Managers from getting paid for poor performances.

HFM Investors will be able to access the report of their PAMM Manager’s performance in real-time, set their own maximum acceptable risks, as well as deposit and withdraw their funds any time at the daily rollover with no additional fee.

HFM offers two types of PAMM Accounts to the Managers, namely the HFM PAMM Premium and Premium Plus on MetaTrader 4 using various trading instruments (Forex, Metals, Oils, and Indices) with market executions. Besides, both PAMM Premium and Premium Plus come with a maximum leverage of 1:300 with fractional pip pricing. And these benefits will be available for the Managers by making a minimum deposit of 250 USD.

Finally, the tight spreads offered for the HFM Premium account are available as low as 1.1 pips with no commission. At the same time, the HFM Premium Plus account offers even tighter spreads as low as 0.3 pips but with a 5 USD commission for every 100,000 USD traded, which means 10 USD for every round-turn trade.

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Even though Forex PAMM Account investment provides new traders with a unique shortcut to Forex trading, it does not mean that your success is 100% guaranteed. Bear in mind that a Manager’s past performance does not guarantee his future success, and trading in the FX market comes with a lot of risks. Therefore, consider everything carefully before investing your money.