The PAMM system already have the vast majority of large brokerage companies working on Forex. Such services may be named differently, but their essence is reduced to transfer of capital a successful trader with the purpose of receiving profit at the expense of profitable trade Manager.
Investment system on Forex very popular, as all parties relevant to PAMM, win. Let's take a closer look at the benefits of the parties:
• professional trader, can significantly increase your turnover, taking investment, due to which you will be able to earn more money;
• the investor receives passive income by sharing part of the profits with the trader who enters into transactions on the PAMM-account;
• broker attracting traders and investors, increases your circulation, which has a profit.
Risks of investing in the PAMM account
A potential investor thinking about the risks in Forex, just afraid of the situation when the Manager loses. This, unfortunately, occasionally happens, so the fears are not groundless. Risks PAMM accounts in Forex are not limited to successful trade traders managing investment capital.
Principal risks of PAMM-accounts:
• trade;
• non-trading.
The first is clear, the merchant can complete the month, for example, bringing losses and not profit as we would like it to customers. The second type of risks is not less dangerous for the capital, but it would be appreciated by specialists, not the first year working in the field of investment in the financial markets.
Then I'll tell you what the first thing to look for when investing capital in a PAMM account on Forex. As shown last year, it is important to evaluate not only management, but also to the company that open a PAMM-system.
How to reduce trading risks
For starters, every beginner investor should understand that one should not "put all your eggs in one basket". With regard to Forex this means that you need to divide your capital into parts and to transfer the management of different traders. If You are planning to invest a relatively large sum of money, then you can consider the option of investing in the PAMM-account with several brokers.
This approach is often called the formation of a PAMM portfolio, and it is completely justified. Non-trading risks, which will be discussed later, is significantly reduced when investing in Forex traders different brokers, and the allocation of capital in multiple PAMM one company reduces trading risks.
Novice speculators often think that successful investing enough to invest in the work of traders, who occupy the first place in the rankings, but it's not. In TOP ranking not rarely break out speculators, greatly overstate the risks. The problem is that they quickly drained their accounts, but until then have a chance for some time to hold on to first place, showing a huge yield.
Non-trading risks PAMM accounts
Imagine that the company went bankrupt, not paying their clients the money. In this case, the investor who is a client of the organization shall forfeit all money invested in PAMM accounts of the broker. How likely is such an outcome? It all depends on the company with which the investor started to work, but precedent is not enough:
• FX-Trend;
• Panteon Finance;
• MMCIS and others.
Risk diversification: how to allocate funds by investment objects.
In my opinion, you need to understand the difference between organizations that create PAMM accounts to meet the needs of managers and investors, and companies that build the pyramid representing how successful leaders themselves. Next, I will explain the situation of non-trading risks PAMM-system in more detail.
Honest PAMM system
Broker, in an effort to attract new clients not only from the number of traders and investors, creates a real PAMM-system. This means that all accounts in this service the real profiteers who are customers of the broker. Potential investors are reviewing the statistics of trade, investment environment and so on, and then make a choice.
Some managers trade profitably, others will lose money, but all of this is happening independently of the will of the organization. There is already the "cards in hand" to investors, whose professionalism will be the main condition of profitable investment.
Checked PAMM-system (honest):
• Alpari
• AMarkets
• Roboforex
First on the Russian market of the Forex services with PAMM-accounts were made by the broker Alpari, followed gradually moved and other companies that already offer accounts to traders in the foreign exchange market. AMarkets is also a time-honored company, which, in my opinion, it is safe to entrust even larger sums of money. Forming an investment portfolio, you should definitely pay attention to the managers of both organizations.
PAMM-pyramids
The organization opens PAMM-system in which at once or gradually appear account with a very good yield, demonstrate a stable positive results. Such deposits are opened by the company, no trade on them is not conducted, and demonstrates to investors a "fake" statistic that indicates the success of the traders.
The objective of this office is to create a positive image of dummy accounts to attract maximum possible investment and then escape with the money. The whole existence of the pyramid investors see how to grow their capital, they will be paid by the customer in the required quantities.
You need to understand the psychological side of the situation, because displays only a small amount, as investors want to hold their money in the system longer, that would earn as much as possible. Therefore, small payments against the background of capital inflows, but the big profits the investor will represent only the figures in his private office. On this principle were built all pyramid schemes, including the well-known structure of the MMM.
Key features of the PAMM-pyramid:
• the company for the launch of PAMM accounts have not played any significant role as a broker in the Forex;
• the firm appeared recently (it's not only about registration, as it is not enough sold by offshore firms that registered many years ago, but also on the activities of the office);
• accounts that run a long time without damage (or with very few losses);
• traders who trade in PAMM this broker does not have investment accounts in other organizations (as a rule, successful currency speculators prefer to trade in parallel from several brokers and call your account approximately equally for the recognition and shills are only in the pyramid);
• the company does not work with Webmoney payment system to receive payments (this is only an additional factor which should alert the investor).
Work with PAMM accounts is not without risk, but the skillful approach to the issue of investment reduces the likelihood of problems. This applies to trading and non-trading risks, because you need to be able to evaluate not only the success of the traders but also the companies themselves, which have managed to find are interested in our investment account.
