Good day, Dear readers of the financial magazine "RichPro.ru"! Exploring different ways to invest money for income, PAMM accounts cannot be ignored. It is about them and will be discussed in this article.
You will learn from this publication:
- What are PAMM accounts and how it works;
- How to open your PAMM account and in which companies it is better to do it;
- How to choose the right PAMM account for investment;
- What are the risks of the investor, investing in PAMM-accounts.
in addition, at the end of the article you can find answers to questions, which most often occur when deciding to invest in PAMM-accounts.
Submitted by ??the publication will be useful not only to those, who decided to use PAMM-accounts in their work. It is also useful for those, who decided to increase their financial literacy, and is interested in different ways of investing, including investments on the Internet.
About investing in PAMM-accounts, what it is, how to choose and where best to open a PAMM account, what reviews can be found about PAMM-investments on Forex - read about all this in this issue
1. PAMM accounts - what is it: definition + example
Many people are looking for a way to make decent money without having to visit the office. Few people like to give all their strength and skills to someone else's company. That is why, having achieved some experience and knowledge, people are starting to look for such ways to earn money, which are practically independent of the efforts made.
PAMM-accounts are a financial instrument, which has a high degree of reliability and profitability. It is enough to have several such accounts, to regularly make a good profit, with a minimum of effort. However, before you take this opportunity, it is important to understand, what are the features of such a financial instrument, as well as how best to use it.
First, let's give a definition, which is given in scientific financial works.
so, what is a PAMM account?
PAMM account is a mechanism for using a trading account, by means of which it is possible to transfer money to the professional manager in trust management for the purpose of implementation of financial operations on various exchanges.
abbreviation PAMM (PAMM) came from an English phrase Percent Allocation Management Module. Literally translated into Russian, it means the module of interest rate management.
Many are frightened by such vague definitions. Therefore, it is useful to consider the principle of PAMM-account on the example.
Visual example
Let's say, that the investor has a certain amount of free cash, example, 10 000 dollars. He would like to multiply them, but does not have time, experience and desire. At the same time he knows, that his good acquaintance is involved in trading on the currency exchange. To do this, he uses not only his own funds, but also attracted capital.
The investor decides to transfer his money to the management of the trader for one month on condition, that he will deduct a certain percentage of the income earned on them.
As a result, through 30 days the investor will return the invested funds with dividends (example, 20%). That is, in the end he will get his 10 000 $ + 2 000 $. In this case, the manager for successful activities will be rewarded by paying him a commission.
In simplified form it looks like this operation of PAMM-systems. That is, the investor's funds are transferred to the account, which belongs to the manager. He trades in the Forex market. The number of investors, who transferred funds to the management of one trader is not limited.
advantage this type of investment is the absolute transparency of all actions, carried out by the manager.
When investing in PAMM-accounts, all transactions, carried out by a trader, tracked automatically. The broker, which provided a trading floor, must follow, that such transactions were lawful, and investors' rights were not violated.
PAMM Accounts - How It Works
2. How a PAMM account works - the principle and scheme of PAMM account
It turns out, that PAMM-accounts are a certain investment service. It allows investors to make a profit, that without carrying out independent operations in the Forex market. The manager receives a certain income for providing investors with management services.
Let's take a closer look at how PAMM accounts work.
2.1. The principle of PAMM account - 4 main stages
There are several main stages in the work of PAMM-accounts.
Stage 1. Opening a PAMM account
The manager decides to open a PAMM account. He selects a brokerage company, which provides such an opportunity. The rating of forex brokers can be found in the last article.
The broker opens a special account for the manager, which is called PAMM. After that, the manager pays him a certain amount of money. It is the capital of the manager.
He will risk these funds in the process of trade in the same way, as well as investors' money. That is, the manager's capital is a kind of insurance against reckless actions of the trader.
Stage 2. Creating an offer
After, as an open PAMM account, and the funds of the manager were paid to him, he publishes an offer. It is an offer to investors to deposit money into a PAMM account.
The offer must contain the following information:
- the minimum amount of investment in the account;
- during which time you can withdraw the invested funds;
- percentage of profit, which will pass to the manager as a reward.
Stage 3. Investing funds in PAMM accounts
Investors analyze existing PAMM-accounts. To do this, they use an independent rating.
Having decided on the choice, the investor deposits money into a PAMM account, which seems to him the most successful.
Stage 4. Income
Managing using your own, as well as the funds invested by the investor, trades in the Forex currency market.
At the same time loss and profit, which are obtained during trading, automatically redistributed among all account participants: managers and investors.
The distribution is made in proportion to the shares of each participant.
2.2. PAMM account operation scheme (with visual drawings)
First of all, the manager opens a PAMM account. Then he decides, on what terms I would like to cooperate with investors, prepares an offer.
After that, he starts trading with his own funds. Investors, seeing the profit, which the trader was able to earn in the trading process, decide on investing in a PAMM account.
Now the manager carries out trading operations, using not only own funds, but also investors' money. With, the greater the profitability it shows, the closer to the beginning will be his account in the overall ranking.
If in the process of trading the manager makes a profit, the amount on the PAMM account increases.
In this case, the profit is distributed among its participants in proportion to the amount of initially invested funds.
Each investor gives part of the profits to the manager as a commission.
So, the work of the PAMM-account in a simplified form can be given in the table using specific figures. This will greatly facilitate understanding.
| Account participants | The amount invested | fraction | profit | Commission (20% from profits) |
| manager | 300 $ | 60% | 600 $ | — |
| investor 1 | 100 $ | 20% | 200 $ | 40 $ |
| investor 2 | 60 $ | 12% | 120 $ | 24 $ |
| investor 3 | 40 $ | 8% | 80 $ | 16 $ |
| total amounts | 500 $ | 100% | 1500 $ |
PAMM portfolio - what it is and how it works
3. How the PAMM portfolio works - the principle and scheme of PAMM portfolio
PAMM portfolio there are several PAMM accounts, united together. This way of investing helps to diversify risks, borne by the investor during the investment.
This is made possible by this, that the investor selects for portfolio investments several PAMM accounts, in which the ratio of profitability and risk, as well as the amount of investment for him are optimal.
3.1. The principle of PAMM portfolios - 4 successive stages
Considering the principle of PAMM-portfolio, it is advisable to consider several successive stages.
Stage 1. Portfolio formation
The manager forms a portfolio, which includes several PAMM-accounts. After that, he invests in the resulting portfolio of its own funds, thanks to which his game on the stock exchange will be more cautious.
The manager has the opportunity to change the composition of the portfolio, including new PAMM accounts and excluding old ones. You can also change the shares of different accounts in the portfolio.
Stage 2. Investments
The investor analyzes the information presented on the broker's website about the results of various portfolios. Choosing him, which seems to him the most effective, he invests in a PAMM portfolio.
Stage 3. Trading
On PAMM-accounts, which are part of the portfolio is traded through the opening and closing of transactions in the Forex market.
Stage 4. Profit distribution
After some time, the financial result is formed on the PAMM-portfolio (profit or loss). It is distributed among the participants of the portfolio in proportion to their contribution to it.
In addition to part of the profits, the manager receives commissions, which are paid to him by investors.
3.2. Scheme of PAMM portfolios (with visual drawings)
The function of the manager at the initial stage is included:
- create a PAMM portfolio;
- determine the conditions under which investors will be able to participate in it;
- invest your own money and start trading.
Investors, evaluate PAMM-portfolios in terms of profitability, which he showed from the moment of formation, level of risk, as well as conditions of cooperation. According to these criteria, they choose the optimal portfolio from their point of view and invest in it.
All the money, which were invested in the portfolio, are distributed between PAMM-accounts, which the manager included in its structure. In this case, the head can at any time change the composition of the portfolio and the shares of its accounts.
On PAMM-accounts, which are part of the portfolio, trade is conducted. During it can develop as positive, and a negative result. This inevitably affects the profit or loss, received by portfolio members.
Investors can monitor the status of the PAMM-portfolio from the personal account at any time. You can also apply for the introduction and withdrawal of funds.
Financial result, which is formed on the PAMM-portfolio, distributed among all its participants. If a profit was made, investors transfer a predetermined part of it to the manager in the form of commissions.
So, PAMM-portfolio is a set of PAMM-accounts. The purpose of its creation is to diversify risks, which appear in the process of investing in one PAMM-account.
Opening a PAMM account is a detailed instruction
4. How to open a PAMM account - a step-by-step guide for novice investors
It is also important to discuss, how to open a PAMM account for an investor in the Forex market. It should be understood, that three parties are involved in the work of PAMM-accounts:
- investor invests money in it;
- manager, who trades in the Forex market at the expense of PAMM-accounts;
- brokerage company or dealing center.
The success of investments is determined not only by the right choice of brokerage company, but also a competent analysis of managers.
We can say, the distribution of functions:
- broker guarantees, that the leader will not disappear with the money entrusted to him, and also monitors, that the distribution of profits and losses was adequate;
- manager conducts activities on Forex trading and increase the money invested in the account.
The following are step-by-step instructions, which is designed to help the investor.
Step 1. Formation of PAMM-portfolio for investment
Every investor should remember, what to The beginning of investing in PAMM should be determined by the structure of investments, and decide, what amount of money he is willing to invest. In the language of financial terms, he must compile an investment portfolio.
important rule, compliance with which will reduce the risk of investment, talk: investment flows should be diversified.
In other words, the invested funds must be divided between several accounts. This will reduce investment risks, and protect funds from loss.
Therefore, an investment portfolio is a set of investments, tool, which allows the owner of the funds to maximize profits.
It is important to remember, that investing all your money in one PAMM account leads to that, that the risk of losing them increases many times over.
Step 2. Choice of broker
When choosing a brokerage company, investors often take it into account:
- business experience;
- reliability;
- how popular it is among other investors.
Absolutely all brokers can be included in the rating, they must meet certain requirements.
The process of choosing a broker should be guided by the following criteria:
- how long the company has been operating in the market;
- profitability of the dealing company throughout its life, as well as in recent months;
- how many clients are registered with the broker;
- what are the conditions for opening accounts;
- how user-friendly the interface is;
- whether the broker has any achievements, including confirmed by awards.
Many believe, that when choosing a broker you can also focus on different which lead to overheating of the gasoline or diesel engine. But this is not entirely correct. Don't forget, that many negative statements on the forums are not true. They are often ordered by competitors.
Also very often reviews are written by those, who lost their money due to incorrectly chosen market behavior strategy, as well as in independent trade. But the loss of money by one of the traders does not mean, that the broker is to blame, because he is NOT in response to newcomers' misses.
Step 3. Registration
Once the brokerage platform is selected, you can take active action. But before that, how to start investing, it is necessary to register a personal account. You will need an email to do this, Name and other data.
You should not use false data. At any time (especially, if you need to withdraw funds) Brokers can request confirmation of data by sending scanned versions of documents.
Step 4. Choice of manager
Choosing a manager is the most important moment in opening a PAMM account. On the site of any broker is trader rating. When choosing, you should pay attention to those leaders, whose accounts showed the maximum profit for the last six months.
It is necessary to compare the following parameters:
- strategy;
- the number of funds entrusted to the manager;
- the total amount of funds in circulation.
Step 5. Opening a PAMM account
It remains to take the last step - to open a PAMM-account directly. After that, it is important not to forget to credit him with money.
So, open a PAMM account, using the instructions above, will not be difficult. It is important to remember, that this method of investing should be used for a long time. Therefore, you will not be able to make a quick profit.
And the last tip - do not be afraid of drawdowns. It is important to understand, that it is impossible to do without them, if you participate in trading in the foreign exchange market.
We make the right choice of PAMM-account for investment
5. How to choose a reliable PAMM account for investment - 8 simple, but important rules
Tim, who decided not just to invest in PAMM-accounts, but also make money on it, it is not easy to decide on a choice. A huge number of different accounts and traders are able to drive into a dead end.
But, if you follow a few simple rules, you can significantly increase the efficiency of PAMM-investments.
The rule 1. When investing in PAMM-accounts, you should not chase after extra profits
If you choose to invest accounts, which once showed a huge income, high risk of encountering such a trader, who considers Forex to be a kind of casino.
He trades recklessly without a specific plan, risking in one transaction mostly funds on the account. In such accounts, a huge percentage of profits shows just that, that risked the trader lucky. There is no guarantee, that in the future his luck will continue.
It is best to focus on stable positive results over a long period. They can be much lower. But the risk of such investments is not so high.
The rule 2. Funds, intended for investment, should be divided between several companies
When investing in PAMM accounts, it is important to be clear, that the investor becomes a market participant, which carries a huge risk. He inevitably faces the possibility of losing the full amount or part of the investment.
At the same time you should make every effort to do so, to minimize this risk. That is why it is so important to distribute funds between several brokerage companies.
If you invest all your money in only one market participant (broker), in the event of its bankruptcy, all capital may be lost.
At the same time, if the capital is divided between at least four companies, in the event of the bankruptcy of one of them, only a quarter of the invested funds will be lost. It, Of course, unpleasant, but most of the money will be saved.
The rule 3. You should not invest in one PAMM-account
This is the rule, as before, based on the need to diversify risks.
To understand the principle of operation, suffice it to give a small example:
when investing 1 000 $ in one PAMM-account in case of its drain the investor loses one thousand dollars. With, if he distributes the same amount equally between the five accounts, in case of draining of one of them he will lose only 200 $.
The rule 4. Bet on experience!
It is important to understand, that you can gain experience in the Forex market, only trading for a few years. Only in this case you can develop the most effective strategy, deal with the nuances of trade, solve, how to behave in difficult situations.
You should not invest large sums even in very successful young accounts. It is best to pay attention to those PAMM-accounts, acting 1—2 year.
The rule 5. An important indicator of the account - stability
When looking for accounts to invest in, you should pay attention to those, which bring stable profits. Don't forget, that the presence of large profits today does not guarantee, that she will be tomorrow.
Thus the stable positive result from month to month allows to judge qualitative strategy of the manager. There should be no huge drawdowns.
The rule 6. Remember the psychology of the trader
Investing in PAMM, do not forget, an ordinary person who manages the account. Therefore, it is important to consider some psychological aspects.
An important rule is not to invest more in the account 5-10% From that amount, which the trader is currently managing. A sharp increase in the amount of the deposit can play a nasty joke. Too much psychological pressure will be placed on the trader, which he may not be able to withstand. As a result, the risk of deposit depletion increases significantly.
The rule 7. Martingale is in great danger
In the Forex market, a very popular strategy called martingale. There are a huge number of its varieties, but the essence of all is the same - after the closing of the loss-making agreement is a new one in the same direction, but with doubling the volume. The experience of a huge number of traders has proved, that in a fairly long time interval, Martingale's strategy is always unprofitable.
investor NOT варто вкладатися в ПАММ-рахунок, whose leader in the trade process focuses on strategy martingale, after all, it significantly increases the risk of draining the deposit.
Naturally, no trader admits this, what strategy he uses. Therefore, it is important for the investor to know the ways, which help to calculate the martingale.
Consider the simplest of them:
- Large brokers in the account information provide information about the leverage used. If there are periods, when there is a full load in the trading process, this is one of the signs of Martingale's use.
- Opening several deals with ever-increasing volume in one direction for one currency pair may also be a sign of a Martingale trader's use of.
- Another sign of the application of this strategy is the suspicious stability of profits. Even after a significant drawdown, the account generates income, and usually for the same amount.
The rule 8. It is best to choose the following PAMM accounts for investments, in which the share of the trader's equity is quite high
Some investors believe, that the share of the trader's own funds in the account does not matter. But this is not entirely true. He, who invested a significant amount of their money, they will not be recklessly risked.
in addition, there are cases, when a broker colludes with a trader about a downpour deposit. One of the signs of that, that it will happen soon, there is a high profit with a very small share of own funds.
So, sometimes decide on that, in which PAMM-account to invest is not easy. However, following simple rules significantly increases the likelihood of choosing the ideal option for investment.
6. Where better to open a PAMM account - TOP-5 proven companies + comparison table
From the above information it is clear, that PAMM accounts are a way for a manager to interact with one or more investors, the purpose of which is to make a profit and increase capital. In this case, all transactions on the account are carried out in online mode, that is, investors have the ability to track in real time, how the amount of their investments changes.
PAMM investments are relatively recent. But they quickly gained immense popularity. That is why the competition in the market of PAMM-accounts is constantly growing.
To date, such a service is offered by a large number of brokers. That is why reviews of the best of them are so useful, presented by professionals.
Company №1. Alpari (Alpari)
Alpari is the largest platform for transactions with PAMM-accounts in Russia and the CIS. The company began to operate in the foreign exchange market 1 998 year.
Today the amount of funds, transferred to trust management through Alpari, is almost 15 millions of dollars. Number of investors, invested in PAMM-accounts with this broker, already exceeded 50 000. Their total income exceeded three million dollars.
Choosing Alpari, investors can count on information support. in addition, they receive a constantly updated rating of PAMM-account managers.
Company №2. InstaForex
According to most experts, the InstaForex broker has a very high level of reliability. In the market, the dealing company operates with 2007 year and consistently occupies the highest positions in the rankings.
InstaForex has been repeatedly named the best Asian broker, operating in the Forex market.
Traders can get on this platform:
- free consultation;
- video tutorials on trading;
- access to a huge database of analytics and statistics.
Company №3. ForexTrend
ForexTrend defines its mission as follows: to introduce the latest and modern on Forex, as well as civilized ways of trading. To this end, conditions and service are constantly being improved, provided to customers. In addition, ForexTrend makes every effort, to promote new tools.
IN 2013 year the company received the award as the best PAMM broker, which provides an opportunity to invest in PAMM-accounts.
ForexTrend provides such services to investors in this area:
- investment advice;
- rating of PAMM-accounts, created on the site;
- continuous monitoring of existing PAMM-accounts.
Company №4. Alfa-Forex (Alfa-Forex)
At the time of its creation, the management of Alfa-Forex set a long-term goal: to gain the status of the best broker in the Forex market in Eurasia. It was this platform that first provided the opportunity to use the terminal for trade MetaTrader 5.
The main goal of the company in the process of working with PAMM-accounts is stability and transparency. Managers on this site receive commissions only if, if a positive financial result has been achieved.
Company №5. Forex4you
Forex4you is an international broker, which sets global goals. In his work he tries to ensure maximum competence of employees, as well as being completely honest with your customers.
Forex4you independently develops unique tools for trading, and regularly introduces various new technologies. Investors, who decided to cooperate with this company, can display profits automatically.
More clearly compare brokers, which got into the TOP-5, will help presented ??table below.
Comparative table of companies, having PAMM service or automatic copying of transactions:
| № Broker | Average level of profitability in% | Distinctive features |
| 1. Alpari | close 50 | One of the first sites in Russia |
| 2. InstaForex | above 30 | You can invest a very small amount, starting from 1 $ |
| 3. ForexTrend | 46-59 | The investor can choose from a large number, as aggressive (with high risk and return), and conservative (low risk and low profit) strategies |
| 4. Alfa-Forex | 25-75 | You can invest around the clock without weekends |
| 5. Forex4you | above 25 | Additional responsibility is imposed on the manager |
7. Reviews and opinions of investors about PAMM accounts
There are a huge number of reviews about PAMM accounts on the Internet. They are very diverse. Some argue, who managed to earn a lot of money on this way of investing. Others scold PAMM accounts, calling them fraud and deception of ordinary people.
It is important to understand, that PAMM-investments often scold those, who failed to understand them, before investing. Such investors do not imagine, how the account works.
Moreover, they do not understand, how to choose PAMM-accounts, as well as what to expect from such investments.
Frequent cases, when reviews are just bought by competitors. Their only goal is to cover other brokerage companies.
Understand, which reviews should be listened to, which ones are real, it is often difficult. Therefore, many investors are skeptical, whether to invest in PAMM-accounts.
In this case, you can give only one piece of advice: it is best not to trust words, and with statistics and facts. Only they can reveal the real truth about PAMM-investing, showing potential profitability and risks.
It is also useful to read the real reviews of binary options (this is one of the possible options for investing money).
Reviews have been invested in Alpari's PAMM accounts (Alpari)
Here are some reviews from those customers, who had experience investing in Alpari PAMM Accounts.
You can also read reviews about Alpari and investing in PAMM accounts on other online resources. We have given only some of them for general reference
8. The main risks when investing in PAMM accounts
Everyone knows, that any way of investing is accompanied by risks. Naturally, they are also typical for PAMM-accounts. Don't forget, that with this method of investing the level of risk is significant above, than when investing in bank deposits, bonds, as well as a large number of shares.
By the way, there is an article on our site, which provides expert advice on this, where it is better to invest money so that they work and bring a monthly income.
Therefore, it is unwise to believe in promises, that earnings on Forex will be risk-free. In the financial sphere, such situations are simply impossible. Especially since the profitability of PAMM-accounts is at a fairly high level. This is always accompanied by the risk of losing a part, or all invested funds.
pay attention! If the trader claims, who found a way to make money on Forex, without risking money, he or a swindler, or does not have sufficient trading experience.
Any investor, aware of the risk of investing in PAMM-accounts, must be extremely careful. Only in this way will he be able not to lose a large amount of investment. However, you should be prepared for that, that when investing in Forex, probably, losses will occur. Without them, you will not be able to earn a decent amount.
Many do not understand, where the risks in PAMM investments come from. The point is, that investing in such accounts is invariably associated with a fairly high risk. No one can guarantee the investor no losses. He must be before, that at any time may lose part of the investment or even the entire amount in full.
Losses are the main source of risk for PAMM accounts, which appear in the process of trading manager. The risk is due to, that the investor suffers losses, which may occur in the trading process in terms of funds, invested in the account. It turns out, that when the level of account profitability decreases, the investor loses part of the invested funds.
To a lesser extent, which determines the level of risk, there is a possible drawdown of the account. It is best to track it based on statistics.
If, example, during the operation of the PAMM-account there was a drawdown at the level 30%, This value should be taken as the minimum level of possible risk.
Investing in this account, the investor must be prepared for that, that at any moment can lose from 30% investments. Importantly, that the potential profitability is worth such a high level of risk.
The investor must be morally prepared for the subsidence of the account. Such temporary losses always accompany Forex trading. The market is cyclical, therefore, the rises are always followed by recessions and vice versa.
The profitability of a PAMM account should be considered over a fairly long period of time. To avoid damage, growth should always be at least a little more drawdown.
So, PAMM-accounts - a much riskier tool, than many other ways of investing. Investing, the investor always risks losing part or all of the investment.
At the same time do not forget about the possibility of reducing the level of risk, implementing a competent policy of diversification. Allocating funds, you can significantly limit the level of possible losses.
It turns out, that only with proper risk management an investor can count on the income from the money invested in PAMM-accounts.
7 the main mistakes of a novice investor in PAMM-investing
9. How not to invest in PAMM accounts - common mistakes of beginners
In addition to learning the theory of Forex, It is important to study before investing in PAMM accounts, as NOT варто вкладати гроші при цьому способі інвестування.
Knowing the common mistakes of novice investors will not only reduce risks, but also increase potential profits. Therefore, we have compiled a list of the most common mistakes.
Error №1. Do not blindly believe the leaders of the rating
Any investor should understand, that the market situation is constantly changing. There is no guarantee, that today's leaders will not be at the bottom of the list of PAMM-accounts tomorrow.
You can't blindly invest in those managers, which are at the top of the rankings. It is important to study the statistics in advance, paying attention to the experience of the trader.
Error №2. Reluctance to learn to manage risks
Investing in PAMM-accounts is an indirect part of trading in the foreign exchange market. Any speculation on Forex is associated with a fairly high risk. It is impossible to exclude it completely.
The investor must be prepared for that, that there will be a drawdown in the account in any case. Don't panic about it.
It is important for the investor, that he had strong nerves, otherwise it will start to rush from one side to the other and the risk of damage will increase.
Moreover, it is important to continuously learn to manage the level of risk, diversify it. This will help reduce possible losses.
Tim, who does not want to learn, it is advisable to choose less risky ways of investing - for example, bank deposits. They bring in less profit, but allow to save nerves.
Error №3. Investments at the peak of profitability
The foreign exchange market has a high degree of cyclicality. This is characterized by, that growth is invariably followed by a decline and vice versa.
A common mistake of novice investors is to invest in a PAMM account, when its profitability reached a maximum. This significantly increases the potential damage. About how to properly invest money, read the article "Investing for beginners".
It is best to invest in an account, when its drawdown is maximum, but rapid growth is expected.
Error №4. Withdrawal from the account at the time of its fall
This is another extreme situation, which is observed in the work of beginners. They are very afraid of losing money and forget about the originally planned action plan. As a result, the investor panics and decides, that it would be better to withdraw your funds, until they merged completely.
During the drawdown, it is important to calm down and throw emotions aside. Remember, that the market is in constant motion, and after a fall there is usually a rise.
Before deciding to log out, best to wait, while the situation stabilizes a bit. During this time you will be able to calm down and soberly assess the situation.
Error №5. Too frequent jumps from extreme to extreme
Often novice investors invest in PAMM-accounts with maximum profitability. After a while, they observe the subsidence and decide, who took on too much risk. Then they take the invested funds and transfer them to the PAMM account, where in their opinion the risk is much lower.
After a while the investor decides, that the profitability of the new account is not high enough, and again decides to move his investments. The result of such actions is only one - throwing from extreme to extreme does not allow the investor to get the desired return. Therefore, it is best to determine for yourself the optimal level of risk and return and adhere to it.
Error №6. Dependence on statistics
The amount of information about PAMM-accounts is huge, no one can study it all. Too frequent appeals to analytics, as well as continuous monitoring of changes in the balance on the account will not give any result other than a nervous breakdown.
It is important to understand, that the manager is market-oriented, which the investor can not change. Therefore, there is no need to study statistics too often, after all, one small investor will never be able to bring the market back.
Error №7. Hope for quick enrichment
Every investor should be set up for that, that PAMM-accounts are long-term investments. Therefore, the first investment will not be able to enrich you in the short term.
Even professionals spend a lot of time on it, to work out a strategy and make a tangible profit. The first analysis should be performed no earlier. Than six months after the start of investment.
Beginners are not the only ones who need to get acquainted, but also try to understand and remember all the above mistakes. This will increase the efficiency of investing in PAMM-accounts.
10. Questions and answers about investing in PAMM accounts
A huge amount of information about PAMM-accounts leads to that, that novice investors inevitably have a huge variety of issues. Finding answers to them often takes a lot of time. Therefore, we tried to make your task easier and gave in the publication answers to common ones.
Question 1. Is it possible to invest in PAMM-accounts of Sberbank?
In our country, trust in Sberbank as a company with low investment risk has always been at a very high level. It has survived to this day. As a result, many are looking for opportunities to invest in PAMM-accounts of Sberbank. In fact, this company does not provide this method of investment.
Moreover, Sberbank has nothing to do with the Forex market. Naturally, he trades in different currencies. But the level of such activity is different, not related to private traders or investors.
Therefore, who is looking for PAMM-accounts from Sberbank, you can give only one piece of advice: stop doing useless things. Oschadbank does not provide cash management services. It is best to pay attention to real companies, operating with PAMM-accounts.
In general, banks are not engaged in trust management in the Forex market. The only thing, what can they offer - Mutual funds. But they have too little profitability. It rarely exceeds that, which acts on deposits.
Perhaps, if Sberbank provided the opportunity to invest in PAMM-accounts, this service would be very popular. But today it simply does not exist. Therefore, who wants to transfer funds to trust management on Forex, will have to look for other options. Moreover, that this way of investing with the right level of risk diversification will bring much higher returns, than the deposit of Sberbank.
If you still want to invest in this company, you can divide the funds between the deposit of Sberbank and PAMM-accounts. By the way, this is a great way to diversify risks.
Question 2. PAMM accounts are divorce and a scam or a real way to make money online?
Many believe, that PAMM-accounts are a common divorce. However, professional participants in the Forex market do not agree with this statement. They are sure, that having certain knowledge and skills on investments in PAMM will be able to earn each. It is enough to form an investment portfolio.
P.S. In one of the articles in our magazine you can find many other ways to earn money on the Internet in more detail.
It is important to understand, how PAMM-accounts work. Simply put, the manager forms the account, using as own funds, and investors' money. Operating on them, he carries out trading operations in the Forex market. The result of such work is the receipt of passive income by investors, who contributed funds to the account and commissions to the managers themselves.
Dissatisfied depositors' reviews often flash on the Internet, who claim, that PAMM-accounts are a scam. They confirm their words, that lost all the money, who have invested in PAMM. That is why they urge everyone not to engage in this divorce.
However, practice shows, that many investors have managed to make good money, investing in PAMM. At the same time, statistics show, that success in this investment market is achieved with only 10% Investors.
Why is this happening
The point is, that there are too many dubious participants in Forex, successful units. Investing in an inexperienced trader or worse, in the swindler, you can lose all invested funds. So before you invest money, you should carefully choose a PAMM account, thinking, whether it will be possible to earn on it.
The scheme of fraud is quite simple. It is enough to show a high level of profitability, which has nothing to do with reality. After that, advertising is spread on the Internet, which claims, that by investing money in this account, you can get rich very quickly from scratch.
Money invested by gullible investors does not actually participate in real trade, they settle in the pockets of fraudsters. In this case, all data is fake, the account will not bring any income. Fortunately, there are not many such swindlers.
The existence of schemes to extort money from gullible citizens does not mean at all, that all PAMM accounts are divorced. In fact, make money on PAMM accounts quite real. The main thing is to choose a reliable broker and a successful trader. Important criteria for this are the impeccable reputation of the site and the transparency of operations conducted on it.
Question 3. How much can an investor earn on PAMM-accounts?
Before you understand, how much you can earn, investing in PAMM-accounts, it is useful to understand the scale of such investments.
The statistics of only one company in the Alps are given below:
- total investment in PAMM over 14 millions of dollars;
- number of investors, who invested in PAMM-accounts exceeded 50 thousands;
- the total profit of all investors is more than three million dollars;
- the profitability of the PAMM currency index exceeds 15 interest per year.
Significant indicators allow us to judge, how huge the PAMM investment market is. At the same time, experienced investors say, that in this market it is quite possible to earn close 30-50% annual. This is much more, than on other investment instruments.
Question 4. How to become a PAMM-account manager yourself?
Most traders, who have been trading Forex currencies for a long time, not wanting to stop there, looking for other options for earning in the foreign exchange market.
Many brokers today offer to do this, using PAMM-accounts. If in the process of trading there is a significant success, it is possible become the manager of such an account. As a result, the trader can earn, not just trading their own money, but also attracting investors' money. At the same time he receives an additional commission.
Any fairly experienced trader has the opportunity to become a manager. It is enough to pursue a well-thought-out strategy, trying to minimize the risk. in addition, the trader must have good trading knowledge and skills.
Opening a PAMM account, the manager sets the offer. It contains conditions, on which the trader agrees to manage the capital of investors.
Mandatory:
- how profits are shared between the manager and investors;
- term of investment;
- the minimum size of investments;
- you can set a penalty for early withdrawal of funds from the account by the investor.
In any case, creating a PAMM account is beneficial for the manager. He receives a much larger amount of money, than it belongs to him. This means, that with skillful trading the manager can significantly increase profits. in addition, if successful, traders will pay him a commission.
What to do first?
To become a leader, the trader must go through the registration procedure at the broker's site, which is engaged in PAMM-investments. In this case, he must choose such a dealing company, which has been working on Forex for a long time and is a big broker.
This will give him confidence, that the brokerage company will create the most comfortable conditions for its work. in addition, choosing large brokers, you can be sure, that the money will not go to fraudsters.
What actions should be taken, to become a PAMM Account Manager?
First of all, you need to enter all personal data in the questionnaire. This procedure should not scare the trader, after all, it is designed to make Forex trading as safe as possible. Brokers often make their demands on traders, who want to become leaders. But do not be afraid: most of them are standard.
The trader must work for a long time, showing stable positive results. Otherwise, all money can be lost fairly quickly.
Don't forget and about that, that the effectiveness of trading, as well as the experience of the manager are reflected in the ratings and charts. If these figures are not high enough, such a situation may arise, that investors simply will not invest in a PAMM account.
There is another condition, which the broker exposes to traders, who decided to become managers. This implies the need to contribute equity to a PAMM account.
example, Alpari's broker has three thousand dollars in its own funds. Such an investment is guaranteed, that the leader has serious intentions. The trader thinks not only about profit maximization, but also about reducing losses only in that case, when he risks his money to Germany.
Having studied all the conditions for creating a PAMM-account, the future manager decides to register with the broker. After that, he contributes his own capital to the account and begins to conduct Forex transactions using it. At the same time, he is trying to advertise his account and attract as many investors as possible.
11. Conclusion + video on the topic
So, it becomes clear, that PAMM-accounts are a promising tool for investment. They are noteworthy and great for even those investors, who have no experience in trading. They may not understand the analysis and features of opening Forex trades.
The largest platforms for investing in PAMM-accounts allow to secure investments. However, the level of profit and risk largely depends on the appropriateness of action, which makes the investor himself.
At the end of the topic, we recommend watching the video on choosing the best PAMM accounts for investing from the rating of Alpari:
We wish all readers of the site "good luck" and success in the financial market, high profitability and minimal risk when investing in PAMM-accounts. We will be very grateful, if you rate our article and leave your comments below. See you on the pages of our online magazine!