Investing in PAMM Accounts in Practice
Starting with this article, we will move to one of the most interesting stages in studying PAMMs, namely, we will take the service into battle – start trial investing, applying different strategies.
For starters, we have $500 and the desire to get additional profit without trading on Forex. As a test platform, we use the service of our long-time sponsor – TenkoFX company. In the future, we will try different brokers during our course, but we will start with this one. So let’s begin.
1 Step of the Investment Strategy. Choosing a PAMM Account by Age
The first thing is to go to PAMM Account Ratings on the company’s website to select several candidates for the role of our personal manager. The ratings of different companies vary, but the most important thing that interests us first is sorting PAMM accounts by the time they have been active. We are interested in accounts with a management duration of at least 90 days. Ideally, we should look for accounts from six months, but this service is still quite young, so we will give opportunity to less experienced managers as well.
2 Step of the Investment Strategy. Researching PAMM Profitability
Since this is the case, our next task will be to examine the balance charts of PAMM accounts before and after trading with the company. The reason is that, as we will see below, not all discretionary managers continue to trade with the same strategy that they show in their history. This can easily be seen on the balance chart by the overall trend. The chart should continue at approximately the same pace, with the same drawdown and trading activity.
Additionally, we are looking for a trader who currently does not have a decline in profitability, strong ‘dips’ in the balance, and who continues trading overall.
3 Step of the Investment Strategy. PAMM and Losses
In the accounts you have already selected, look at the profit and loss parameters. Profit is generally clear – we need a stable, preferably growing balance. However, losses are divided into two sub-levels:
A. Deposit loading or trading aggressiveness, i.e., how much percentage of funds the trader uses in trading. We need a chart without spikes, staying under 50%. More than that is almost a lost deposit.
B. Maximum loss on the account or DD. This is the amount of loss the manager has suffered during the selected period. In our case, it should not exceed 20%. Overall, the lower it is, the more careful the manager is with the funds, and the safer your investments will be.
4 Step of the Investment Strategy. PAMM and Investors
Consider the investment conditions. Look at how much money the manager has invested to open the account – the more, the better. Pay attention to the minimum investment volume – it should be enough for us. Look at the investors’ trust – how many there are and how often they invest in the manager.
How to Invest in PAMM? 3 Steps and 30 Seconds
In each specific service, it’s different, but it’s usually not complicated.
- Here, you open an account with the company, top up it, and go to the rating.
- Open the profile of the desired PAMM manager and press the ‘Invest’ button.
- You are redirected to your personal cabinet, where you set the investment amount and accept the order.
