The main essence of the PAMM account is that the manager and the investor combine their efforts and fund to achieve the goal of making a profit. In the future, the income received is distributed between them according to the equal contribution.
PAMM account in a simplified sense.
The abbreviation PAMM stands for Percent Allocation Management Module. To put it simply, this is a module for managing the distribution of profit in percentage terms.
A PAMM account is an individual account of a trader that is opened to other investors for the transfer of finances under management. The broker ensures that the profit and loss are distributed fairly between the investors and the trader, according to the percentage of deposits.
Professional advice on how to make money on PAMM accounts.
A trader opens a PAMM account for the purpose of making trading transactions. The investor analyzes the ratings of the managers available at the broker and chooses the optimal PAMM account, based on the calculation of 4-6% of deductions per month. After completing the registration on the website, the broker deposits funds to the trading account. The investor then transfers the money to the account of the selected manager.
For example, the manager’s goal for the month is to earn 10%. The investor deposits $1,000 to his personal account.
t is easy to calculate that 10% of the investment of $ 1,000 is $ 100. From the profit of $ 100, the account manager will take his interest for the work in the amount of $ 40, and the remaining $ 60 will go to the investor’s account. Accordingly, it can be concluded that the investor’s commission is 6%.
One PAMM account can have an unlimited number of investors. The final profit will be distributed in proportion to the contribution of each of them. For example, if the account has 50 investors and each of them has invested$ 1,000, then at the end of the month they will receive equal shares. The manager himself will receive a commission of $ 40 from each of them. The total amount of the commission will be $ 2,000.
“A trader can have a large target audience of investors if he has the appropriate skills in trading, is a professional, i.e. will consistently earn a profit”
Golden Stanley is one of the most popular services in terms of quality, reliability and profitability of transactions. The capitalization of some accounts is more than $2 million. The minimum entry threshold to the account is $ 1500.
Be sure to check the following indicators:
- Profitability indicator
- The period of operation. As a rule, successful accounts have it for more than a year.
Also, we do not advise you to invest all your money in one account. Diversify your risks. Distribute the funds to different PAMM accounts. This will help you minimize the risks.
The participants of this type of system are:
- Traders (account managers)
- Clients (investors who make deposits)
The purpose of traders is to manage the account, conclude transactions and distribute profits among investors. That’s what they get their commission for.
What is the motivation of a trader?
The trader has his own income and all the necessary knowledge. The question arises: why does he need investors at all? Here everything is relatively simple. The main rule of trading is: the larger the deposit is, the more profit it brings. Accordingly, any trader aspiring for success is constantly trying to increase the money resource. For this purpose, it attracts investors.
Security of earning on PAMM.
Before investing, we must warn you that participation in such projects involves risks. You should know that in the worst alignment, you risk losing all your money. At the same time, the investor himself bears 100% risk from his investments.
As we mentioned above, to minimize the risks, you should create an investment portfolio. You need to make a deposit to several accounts at once. It works according to the following principle: if 1 or even 2 accounts go down, the rest will help you to bring the total indicator to plus.
An important condition is the fact that the manager receives his interest only if the transactions are successful.
Features of the procedure for investing money in a PAMM account.
Brokers began to use actively the investment of funds in PAMM accounts in 2009. The trade turnover of a classic broker is $ 120 billion. It includes 65 thousand investment accounts.
A successful PAMM account in management has about $ 2.9 million.
The number of people who want to earn money in this way is growing every day. In fact, there are no limits, which attracts investors even more.
“When choosing a manager, special attention should be paid to the profitability indicators. As a rule, the period of operation of successful accounts exceeds 1 year. When investing money in an account, you need to minimize the risks as much as possible”
If you are a person who wants to earn money and if you are ready to take risks, then you should definitely try it.
By investing money just one time, you can get a constant passive income, without making much effort.