PAMM accounts seem like an excellent way for beginners to dive into Forex investing without the stress of trading themselves.
Investing in a PAMM account sounds like a smart way to dip your toes into Forex trading without the steep learning curve!
By investing in a PAMM account, you transfer money to the management of a trader trading on the foreign exchange market, and you give back part of your profits for this.
A PAMM account is a modern investment solution offered by many brokerage companies. With its help, without having any special knowledge or trading experience, you get the opportunity to earn money on the Forex currency market. For novice traders, a PAMM account is a great alternative to independent Forex trading.
You won't have to trade Forex yourself.: you choose a manager in the rating of PAMM accounts and invest funds in him. Next, your funds will be managed by an experienced trader.
Technically, PAMM accounts operate on the basis of the broker's electronic platform (Internet site), called a PAMM service. First of all, the trader himself trades on this platform. In addition, the broker provides a PAMM account service: you can select a trader's PAMM account in the rating, invest money in it and manage your investments in PAMM accounts via the Internet. Once a month, a portion of your profits will be transferred to the manager as a reward.
Each PAMM account is a trader's trading account, to which investors can connect their funds. When the manager publishes a PAMM account, he creates an investment offer, where he indicates the percentage of profit that he takes over management. Under the terms of this offer, investors invest money in a PAMM account. Each trader can open one or more PAMM accounts.
After you have invested in a PAMM account, you will be able to monitor your funds in your personal account on the broker's website. You can withdraw funds or top up your account at any time, all operations with PAMM accounts are performed via the Internet and take no more than a day.
1. The manager opens a PAMM account
It all starts with the manager opening a PAMM account with a broker. To open a PAMM account, a trader must register, pass verification, top up the account with at least $ 25,000, create and activate an offer for investors.
An example of a PAMM account was opened by the manager on January 01, 2025. According to the offer created by the manager, he takes 20% of the investors' profits as a reward for managing from $ 1,000.
2. The investor finds the manager's PAMM account
An investor usually finds PAMM accounts based on recommendations or in a public rating of PAMM accounts.
Rating of PAMM accounts is a convenient way to find a PAMM account based on its indicators. For each PAMM account, the average annual return and the maximum historical loss (drawdown) are displayed.
3. The investor invests in a PAMM account
All transactions with real money are performed through a broker. To invest in a PAMM account, you need to register and top up your personal account.
For example, I invested $1,000 in a PAMM account.
4. The first month after investing
Let's say that in the first month, the PAMM account showed a yield of +10%.
The remuneration (commission) of the manager is accrued only on profit — the amount of funds that exceeds the balance: 1100$ — 1000$ = 100$. Commission fee = 100$ * 20% = 20$.
Once a month, the trading interval is closed: the profit is transferred to the balance, the commission is transferred to the manager.
5. The second month after the investment
Let's say the PAMM account made a loss of -5% in the first month.
At the end of the second month, the funds are less than the balance, so the manager's commission is not charged and will not be charged until the funds exceed the balance, i.e. until the manager withdraws the PAMM account from drawdown.
6. Deposit and withdrawal of funds
You can deposit and withdraw funds from the PAMM account at any time, without waiting for the end of the month. Profits can also be withdrawn at any time.
In terms of time, operations are performed according to the PAMM account planner, but no longer than a day. The manager himself sets out in the offer at what hours of the day applications are executed and how many minutes before the end of the hour applications can be submitted.
Let's say we decided to top up our account by +$100.
To invest in a trader, you just need to open and replenish your investment account on his PAMM account. After that, the funds will automatically participate in the trader's trading, and you can check your balance, deposit or withdraw funds at any time.
To invest in a PAMM account, you need to follow 5 simple steps.
In the rating, select a PAMM account with the indicators that are suitable for you. Or choose the manager you want to invest money in.
Click "Follow" and you will be taken to the account creation page.
Enter the investment amount and click Subscribe.
Click "Transfer" to switch to real investments.
You must have previously opened and replenished a personal account with a broker.
Enter the investment amount and click "Transfer". An application for depositing funds will be created. As soon as it is executed, your funds will start participating in trading.
