In this blog, you will learn:
- What is Forex MT4/MT5 MAM Software?
- Whats the difference between Forex PAMM & Forex MAM Account?
- Capital Allocation Methods
- Types of Forex MAM Software
- Benefits to Forex Brokers, Master Traders & Novice Traders
What is Forex MT4/MT5 MAM Software?
Forex MT4/MT5 MAM Software is a tool that lets one trading account connect with multiple trading accounts and place orders in those accounts by placing orders in the main account.
Since MT4 & MT5 are the most popular Forex Trading Platform, the MAM Software has been developed primarily keeping MT4 & MT5 Trading Terminal in mind with the purpose of hassle-free Multi-Account Trading.
When it comes to forex trading, traders can be divided into 2 main categories:
- Consistent Profit making traders who are usually known as Pro Traders or Master Traders
- Loss Making Traders that keep on blowing account yet are not able to figure out ways to make profit
Trading used to be an isolated and private business but with the advent of social media platforms like Facebook, Twitter, YouTube, Linked In, Telegram etc, forex traders are able to connect with each other and share their trading experience.
Most Pro-traders or Master Traders have a large follower base that keeps urging professional traders to trade for them.
This flooded the forex brokerage technology providers with requests for software, tool, or module that would let professional traders get access to other trader’s accounts and place trades in their accounts directly.
When the demand increased and developers sensed the large market, they developed MT4 Multi Account Manager for Forex Traders and Brokers. It connects one MT4 Trading account with multiple trading accounts and gives access like order placement and forex account management.
How does Multi Account Manager (MAM) in Forex work?
Many Forex Brokers offer MAM Accounts to clients. Here is how Forex MAM Works:
Total Time: 1 day
MT4/MT5 MAM Software Subscription
Forex Brokers subscribe to MT4 MAM Software from their Brokerage Solution Providers.
Sign Up as Master Trader / Fund Manager
Professional Traders who are also known as Master Traders or Pro-Traders subscribe to MAM Module
Forex MAM Account Subscription
Forex Broker creates MAM Account Packages that let Retail Traders sign up and connect their trading accounts pro traders.
a. MAM Account Brokers may charge different fee and brokerages for the special Trading Account
b. MAM Account may have bonuses and incentives for traders
c. Clients/Traders need to sign an agreement or LPOA which states that they are giving access of their trading account to the master trader/fund manager who will place trades for them.
Forex Trading By Master Trader or Fund Manager
Pro Trader places order to multiple accounts on day to day basis based on their technical and fundamental analysis.
MAM Account Subscribers have access to their trading account and can modify the trades, close the trades at will and stop the trading by pro traders whenever they want.
Whats the difference between Forex PAMM & Forex MAM Account?
While both PAMM & MAM Accounts are Managed Fund Services offered by Forex Brokers. They are different in 2 primary bases:
- Unlike Forex PAMM Account, funds don’t move to Master Traders’ Account and stay at traders’ account only in Forex MAM Account.
- While in Forex PAMM Account Master Trader or Fund Manager controls every aspect of Trade like which trade to take, take profit and stop loss, volume etc. Forex MAM Account gives Retail Traders the flexibility to manage the different aspects of trade like lot size, take profit, stop loss, closing the order etc.
Capital Allocation Methods
Most of popular Forex MAM Software provide 5 methods of money allocation:
Predefined Volume: the predefined volume can be set to execute the orders.
Total volume for each order the total volume is used for placing orders
Equal parts: the total volume is allocated among all the orders in equal proportions.
On equity ratio the total volume is allocated among orders according to the accounts total equity ratio.
On free margin ratio the total volume will be allocated among orders according to the account’s free margin ratio.
Types of MAM Software
MT4 MAM Software that connects only MT4 Trading Accounts only. These were the first MAM Software.
MT5 MAM Software that connects only MT4 Trading Accounts only. These were the first MAM Software.
MT4 to MT5 MAM Software as the name suggests this software allows MT4 Account to access the MT5 Accounts along with MT4 Accounts
MT5 to MT4 MAM Software as the name suggests this software allows MT5 Account to access the MT4 Accounts along with MT5 Accounts
Inter Broker MAM Account software is revolutionary MAM Software that allows connection between different brokers’ account holders within MT4 or MT5 terminals.
Benefits to Forex Brokers, Master Traders & Novice Traders
MAM Software benefits everyone in the forex trading ecosystem.
- Forex Brokers earn on MAM Accounts; the volume increase thereby generating additional brokerage earnings
- Master Traders earn professional fee along with share in profits for their profit making capabilities
- Novice Traders get to make profits from Forex Trading using the expertise of master traders
Multi-Account Manager is software that allows one trading account to connect with multiple trading accounts and place trading orders directly into their accounts.
Forex Brokers take this software from Forex Brokerage Solution providers and offer MAM Accounts to their clients. Master Traders sign up to MAM Account Brokers and offer their forex fund management services. Forex Traders can sign-up to MAM Accounts and choose which Master Trader to connect with.