PAMM, LAMM, MAM

Life can be wonderful

There are several money-managing systems available on the FX market. PAMM, LAMM, MAM might all sound similar, however, there are certain differences between the systems that should not pass unnoticed. Before investing in a managed account, setting up an account as a manager, or offering the system to your clients as a broker, you should do your homework first: not only pre-evaluate the specifics of the managed account type, but also – make sure that the system offers suitable conditions for you to do any investment at all in the first place. In order to make the picture clearer, lets have a look at the specifics of the 3 systems and how they differ.

LAMM (lot allocation management module) can be called the predecessor of PAMM, since it does not function according to the size of each individual investors account. Each and every customers account, would automatically increase by one standard lot whenever the manager buys one standard lot of a currency. This system could be beneficial in the case when the customers’ investment is the same as the manager’s, however, there might be more arguments against the system in the case if investors portfolio is much larger than the managers.

MAM (Multi-Account Manager) accounts allow manager to assign a higher leverage to specific subaccounts, if any of the investors have such preferences. This feature makes the MAM accounts particularly suitable for investors with a high-risk tolerance.

PAMM (percent allocation management module)

Is different from other management systems, since the investors’ portfolio is affected depending on the size of the respective deposit. Each managed account has its own ratio in PAMM according to its volume. Typically, PAMM requests financial participation by the manager; therefore the manager is also trading for his/her own interests. The managers’ activity results (trades, profit and loss) are allocated between managed portfolios according to the ratio.

This system is preferred by Money Managers for the broad options PAMM offers: 1) flexibility in investment conditions (the trader sets the amount of commission and trading period by himself, rollover time can be set at any hour, etc.); 2) TOP Manager list, which is created according to performance and publicly available for the investors, works also as a promotion tool for the Managers’ skills; 3) trading reporting is available according to the Managers’ professional needs.

Investors, however, choose the PAMM system due to the wide range of professional Managers available, whose style of trading and results can be examined via the TOP list. Investors have the ability to monitor trades in real time, which gives more certainty and control over the investments. Additionally, an investor can setup the allowed drawdown levels and nominate, or change the traders in the TOP list. On the side, any Investor is welcome to participate as an Introducing Agent to attract more investment.