PAMM (Percent allocation management module)

A PAMM (Percent allocation management module), also called “managed account”, is a form of investment for those who would like to invest their money in forex without having to trade themselves. By choosing a managed  account the responsibility for the trading is transmitted to a money manager, however it is very important to remember that all potential profits, as well as potential losses are going to be Yours, therefore You’ve got the final word and are fully liable for Your funds in any case.  

Below is some advice for choosing a reputable money manager to care for a managed account: The asset manager should offer different strategies which cover a variety of financial instruments. This allows for risk diversification of the investment. Sticking to a single strategy with only one category of assets puts the money manager at risks of poor performance (such as a decline in volatility) where other assets won’t be able to compensate due to the difficult market environment. This asset manager loses the election against a competitor that offers of house from a variety of policies and instruments. 

Managed Accounts include historically generated returns in general. Theoretical back-test results must not be mixed with real trading history and only real trading history should be accounted for.   

The money manager must make sure that the risk / reward ratio of individual trading strategies is understandable to the investor. This is the only way he can assess the risk that he would like to subject his followers in order to hit his targeted return. From this point of view you should be aware to invest in some lucrative offers that promise you several hundred per cent return per month. Such yields can be generated in exceptional cases and ONLY by taking excessive risks which will carry the risk of a total loss of Your investment.  

The asset manager should allow the investor insight into trading activity in real-time. In addition he should grant full access to all trading reports and account statements. The investor should have the ability to communicate directly and without detours via intermediaries with the money managers.