PAMM stands for Percent Allocation Money Management or Percentage Allocation Management Module. It is a forex account composed of one or several trading accounts being carried out by a manager. The manager is an experienced Forex professional responsible for all of the trading. The PAMM Account can be thought of as both a trading account and a financial investment. It is equally good for beginners of forex and for experienced inverstors. The PAMM account can be combined with individual trading. This way the beginners can compare their strategy with the ones offered by the manager.
The idea of PAMM functioning is sharing the profits and losses in proportion. PAMM is a convenient financial instrument which simplifies the procedure of investing, minimizing the risks as well as for the manager as it provides a convenient way to manage the investors' accounts. Investors can connect to the manager's PAMM account by opening Managed Accounts representing their share. Each PAMM manager also has their own Managed Account representing their personal investment. The profits or losses are distributed proportionally based the level of investment.
The benefits of PAMM account for the Manager and for the Investor:
Due to monitoring of the managing trader accounts you can select accounts which seem to you the most attractive for investing funds. Apart from this, you will be always able to watch over the success dynamics of your managing trader for a certain period.
Note that PAMM is different from Copytrading where you can mimic experienced traders for a fee or for free. PAMM is an investment. Therefore, you do not trade yourself but allow a professional to trade for you. The advantage of PAMM working with a broker over the freelance internet traders is that the PAMM manager is not going to disappear with your money in your pocket. If he wins, he gets the prescribed fee. He loses, he gets nothing at all.
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