MAM Or PAMM: Which One To Choose?
Brokers want to offer clients various investment options, particularly to those who don’t want to trade on their own. In this article, we are going to discuss two options that are flexible and can be found in the current trading market and offer professional and newbie traders to facilitate their trading needs. These solutions are ideal when you’re looking to see what the forex market has to provide. If you’re looking to earn a passive income, or you aren’t able to give all your time to trading forex, you can choose between MAM or PAMM accounts.
Numerous innovative strategies have been devised to assist traders, as the market gets more competitive each day. Of them, PAMM is the most progressive approach. It is the acronym for Percent Allocation Management Module. You can distribute trades according to your preference percentage using the pamm account forex. Many brokers offer this service to fund managers or investors. With the help of a PAMM account, you are able to divide your various parts of your accounts to different managers. Most of the PAMM accounts you’ll find currently deal with the aggregated funds, and do not make transactions in the investors’ accounts.
In PAMM, investors allocate their funds to a qualified trader or money manager they select. The manager is responsible for the management of the funds pooled across multiple trading accounts. Managers cannot access client deposits directly to ensure their safety. This means he cannot withdraw or deposit funds, and only investors have the right to make deposits or withdraw funds from managed trading accounts. However, the managers can be able to claim their performance-related fees at any time they want from the managed accounts, in accordance with the conditions of the contract.
The MAM account operates on the same system of percentage as the PAMM account. MAM accounts provide greater flexibility in diversifying trades as well as changing the risk of sub-accounts. Hence, you are able to adjust the risk percentage depending on your personal risk profile. MAM or more commonly referred to as “multi-account management” allows you to connect several different MetaTrader accounts with one master account. The primary purpose is to assist investors in replicating trades in their accounts. The MAM system is very much well-liked by money managers who have their own customer base. The MAM system is used by master traders who do all the copying and investors just need to specify the amount they invest and their risk ratio. MAM lets investors have access to all their accounts.
One can say that the purpose of PAMM is strictly separate from MAM, as the platform is known for maintaining cordial relations between investors and money managers. PAMM accounts enable investors to have complete control of their money. Investors are also able to deposit and withdraw funds at any time , without risk. Thus, the PAMM account manager solution offers more options than the MAM account.