In this article, we explain you different aspects of one of the most popular Forex Account Management or Forex Fund Management tool called Forex PAMM Account. At the end of this article you will learn about:
- What is a PAMM account in forex?
- What does PAMM stand for?
- How does a PAMM account work?
- What is MT4 PAMM
There are 2 Types of Forex Traders; Profitable Traders & Loss Making Traders. Loss Making Traders want Profit Making Traders to trade for them and make profits for them as well. A PAMM Account helps Traders who are either making losses or do not have time to trade to connect with profit making traders who are ready to manage funds of other traders.
What is a PAMM account in forex?
PAMM Account is an Investor Account offered by Forex Brokers to it’s clients. A PAMM Account helps INVESTORS to connect their accounts with a TRADER Account and transfer their funds to this account.
How does PAMM Account Work?
When a client signs up for PAMM Account, s/he authorizes another trader to manage funds and make trades for him/her. The forex broker facilitates the connection between the Client or INVESTOR and the Fund Manager or TRADER. The INVESTOR can allocate all or a portion of total funds to TRADER and along with access to trading accounts so that TRADER or Fund Manager could use the funds to place trades or orders.
In this whole arrangement, Forex Broker acts as a custodian of funds and fair play. Forex Trader gets to make money using trading skills of a master trader. And the fund manager or master trader gets to make extra money by charging fee and/or a share of profits made.
While Investors want the profits on their funds and safety, Fund Manager gets an additional source of revenue by way of fund management fee and profit share. When something works for clients, it’s good for Forex Brokers too. They have an additional feature to offer to clients, may charge some fee for that, it increases trading and thereby brokerage revenues.
PAMM Software Application provides a Win-Win opportunity for forex brokers, and traders; everyone benefits with a PAMM Software.
PAMM is a value added offering from a Forex Broker that can help retail traders make money without worrying about technical analysis and risk management etc.
What does PAMM stand for?
In Forex Brokerage & Trading world, PAMM stands for Percent Allocation Management Module.
Forex Brokers like any other businesses need to constantly offer value added services to their customers and clients. Apart from providing an advanced and high tech Forex Trading Platform like MT4 or MT5, they need CRM and other additional tools that help Forex Traders place and manage their trades effortlessly.
While most Forex Traders start their trading career by following tips from news portals, pro traders, influencers, they place orders themselves and managing fund largely remains in their hands only.
3 Key Forex Trading Edges one must have:
Anyone who has traded into forex, stocks, crude, gold etc knows that winning and losing a trade is the game of probability. Like casinos, you need to have an “edge” to win a forex trading game.
Here are the 3 Key Forex Trading Edges one must have to make money from forex market:
- Technical Analysis & Fundamental Analysis
- Money management
- Risk management
Technical Analysis & Fundamental Analysis can give you an edge but the real hero for all winning forex traders is money management and risk management. Most of us who have been into Forex Market for a couple of months know this yet almost everyone has suffered losses and continue to take a hit.
So what’s the solution to this problem? Should all loss making forex traders exit the market?
The answer is NO! All you need to do is to have someone to manage funds for you for a fee. Funds Management by Forex Brokers or Master Traders is the solution wherein retails traders can participate in Forex Market and make money. Forex Trading Tools like PAMM, MAM, Trade Copier, Forex Signals etc come to rescue for both brokers and traders.
What is PAMM in forex?
PAMM in Forex is a software application module used by Forex Brokers to facilitate passive investors or traders to connect their account with a Fund Manager Account which manages their funds to earn profits for them.
What is MT4 PAMM?
MT4 PAMM is Software Application developed for MT4 Forex Brokers & Traders. It works with an MT4 White Label & Trading Terminal. MT4 Brokers can provide PAMM Account Service to its clients (Investors) who can connect with a Pro-Trader (Trader) within the MT4 Trading Terminal.
Hope this article gave you better clarity of Forex PAMM which is one type of Forex Account Management or Forex Fund Management.
Please do share your thoughts in comments section.