Managed forex accounts give investors a special opportunity to participate in the foreign exchange markets without undertaking the research or trading activities themselves. These accounts involve depositing money into a forex account and delegating the task of trading to a professional. While significant profits can be alluring, investors must also understand that losses can be equally steep. Managed forex accounts provide a special investing option for people who seek thrill and possible profit in the financial world, but at the same time, they call for a strong stomach and a willingness to accept significant risks.

Is Investing In MAM & PAMM AccountsUnderstanding MAM & PAMM Accounts

Forex brokers provide two types of investment accounts: MAM (Multi-Account Manager) and PAMM (Percentage Allocation Management Module), which let traders and investors combine their money for investments.

MAM accounts are made for expert traders who wish to handle several accounts concurrently. While using a MAM account, the trader may distribute trades and control risk on the master account, and the same transactions are automatically reproduced on the other sub-accounts based on the allocation percentage. Also, the trader can manually change allocation percentages, allocate different volumes to various sub-accounts, or combine sub-accounts for use in various trading methods.

On the other hand, investors completely control their own sub-accounts and have real-time access to their accounts. Moreover, they can intervene to alter, or exit trades made by the trader and decide when to deposit and withdraw money from their sub-accounts.

As for the PAMM accounts, they are made for small-scale investors who wish to benefit from the knowledge of seasoned traders without having to manage their capital actively. A forex PAMM account is funded by an investor’s deposits and funds from other investor accounts. The designated trader or investment manager then chooses investments on the group’s behalf.

Profits or losses are allocated following each investor’s part of the account, which is proportional to the quantity of their investment. Usually, the trader deducts a management fee from the account’s gains in exchange for their services. PAMM accounts provide investors with transparency and information about the trader’s performance history and investment strategies. Read More