How to benefit from investing in PAMM accounts
Our review today is devoted to the PAMM concept which is abbreviated as Percentage Allocation Management Module. There is a great deal of information on this scheme of using a PAMM trading account as well as specifics of such investment, though the information is sometimes misleading. In this article, we are going to figure out the essentials. So, you will find out how exactly PAMM accounts are helpful both for beginners and seasoned traders.
In a nutshell, a PAMM account is a regular trading account with a unique feature which is a possibility of investing. Indeed, traders can invest their own capital in a PAMM account and therefore get a part of profits in case of a winning deal and incur losses if something goes wrong. An overall amount in a PAMM account consists of a trader’s own capital and investors’ funds. Profits and losses are distributed in proportion to their participation interest minus a trustee’s reward.
Here is an example of how to calculate a profit. A PAMM trader set a commission for investing at 30% and attracted 10 investors. Each of them provided $500 for trust management. As a result of a winning deal, a trustee increased the pooled money of $5,000 by 20%. The overall profit totaled $1,000. Thus, a PAMM trader’s reward came out at $300 and investors’ returns equaled $700 that was $70 for each of them.
Otherwise, losses are distributed among investors in the same proportions, but a PAMM trader does not earn a reward. To sum up, PAMM accounts enable experienced traders to boost their own income because they amass their capital through the funds of referred investors. In other words, it is a great solution to monetize know-how and experience.
Investors, especially beginners, are interested in easy passive income with their minor involvement. The most important is that they are free to choose a trustee to manage their capital in a transparent manner. A large number of PAMM accounts are available on Forex, so that PAMM managers compete fiercely for every investor. Besides, would-be investors can monitor statistics and make their own conclusions about professional skills of PAMM traders. An investor can judge the following criteria: a number of winning deals, profits earned, trade volumes etc. Thus, you can select the best. On average, the minimum investment amount is $50.
Investing in PAMM accounts poses the same risks of trading. Even efficient traders cannot avoid mistakes which inflict losses. The worst risk in such investments is blatant fraud. There are a lot of stories about PAMM managers who cheated people out of their money and vanished from sight. Therefore, the first thing to do before joining a PAMM system is to choose a reliable broker. The advice is too simple, so that most people can neglect it. Nevertheless, we strongly recommend you choose a broker after careful consideration.
Our advice is InstaForex, a broker with international recognition. Every participants can rely on the PAMM system from InstaForex to ensure full automatic supervision of all transactions and profit shares. A PAMM manager cannot afford any delays and unauthorized steps. Indeed, investors’ funds are accepted and above all profits are calculated and paid in the automated mode. The system developed by InstaForex IT specialists provides perfect safety of your investment. You can withdraw your funds from a PAMM trader’s account on request within 30-60 minutes after you submit your application.
Streamlining the PAMM system, InstaForex launched a unique program of investment projects for large partners. The broker offers beneficial conditions to traders who specialize in trust management, thus giving them ample opportunities for reaping profits. Moreover, such partners are provided with a practical plan to refer new clients and detailed guidance at each stage of work. You are sure to appreciate efficiency of InstaForex instruments of attracting clients!
Within the scope of the Investment Project affiliate program, partners receive affiliate commissions from attracted investments. Besides, they gain an extra reward as an interest on a volume of deals. Importantly, InstaForex offers its Investment Project partners the highest reward compared to other brokers that is 1.5 – 5.3 pips from each deal.
Let’s figure out how to calculate a profit of an Investment Project partner. For example, a partner attracted investments from 10 people as a PAMM trader. Each of them invested $1,000. As a result of a winning deal, a partner enlarged a mutual fund by 20% by closing 1,000 InstaForex lots. A PAMM trader’s reward is set at 50%. To sum up, a partner’s profit makes up: 10*1,000*0.2*0.5+1000*1.5=$2,500.
Last but not least, those who register with the Investment project program enjoy an official status of an InstaForex partner. So, they are entitled to promote the broker’s advantages that is a powerful technique for referring new clients.
In conclusion, the broker uses a secure mechanism which guarantees safety of clients’ funds. It is the service of segregated accounts. Such accounts with InstaForex enable you to manage a deposit which is stored in your bank account or in a client’s account. With this service, your clients are legally protected from fraud.
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