PAMM-account or PAMM-system (from the English. Percent Allocation Management Module, PAMM) management module percentage distribution of profits. This is a special principle of the trading account, which is technically easier for the transfer of investment capital in trust and the subsequent distribution of profits between the investor and the manager.
PAMM-system works as follows: control creates a special PAMM-account with the broker of his choice. In the process of specified conditions under which the expected distribution of profits and the accession of investors. After that, the account is replenished necessarily personal funds trader - the "capital control". Initially, the trade is carried out only by means of the control, and the results can be seen on the website of the broker. Thus, managing not only shows its reliability and performance, but also attracts potential investors from customers DC.
After attracting investor funds to PAMM-account manager continues to work with a trading account, which combined the number of contributors. He has every right to manage investors' funds only for trading in the Forex market, and can not remove them from the account. At the end of a predetermined period, the received profit apportioned among all investors PAMM and the manager.
Thus, brokers and dealing centers are the guardians of decency relations between investors and managers, as well as greatly simplify the customers to find and select their future partners.
Yield PAMM accounts depends entirely on the ability to manage and apply their tactics. More aggressive, short-term, a way of trading can bring much more profit than the long-term-investment. But at the same time and reliability is inversely proportional. Therefore, when choosing a manager, have a thorough approach to the study of its performance, which you can read online broker.
Let us consider in more detail the benefits of the PAMM system:
- Security of investment capital - managing the trader does not have the ability to withdraw funds investors.
- Investor at any time to withdraw your funds from the PAMM.
- On these accounts you can reinvest the profits.
- When several PAMM accounts can diversify their investment capital.
- The sales process is completely transparent, because the history of operations is available to all investors.
- Managing itself participates in the PAMM-account, which ensures a more responsible attitude to trusted agents.
However, with all the obvious, at first glance, the benefits of the PAMM system can be isolated and identified the risks that you may encounter:
- Investing in the PAMM fully protects depositors only possible means to seize control. But does not protect against possible losses in speculative trading process on Forex market. Here the main axiom is valid: the profit received by the Manager in the past does not guarantee future profitability.
- The next possible risks that may be encountered - fraud of the broker or dealing center. As we all know, the market for providing services to enter the Forex market, you may encounter the so-called "kitchen" - scammers. Such organizations may be closed at any time and disappear along with all the bills and money.
Investing in the PAMM-system requires compliance with the rules of classic investment: the division of capital, strict criteria for choosing a broker and manager, the constant monitoring of the process of trade and so on. In this approach, investing in PAMM can be a major source of income in the Forex market.