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A percent allocation management modulecommonly known multiple account manager forex PAMMalso sometimes referred to as percent allocation money multiple account manager forexdescribes a software application used predominantly by foreign exchange forex brokers to allow their clients to attach money to a specific trader managing one or more accounts appointed on the basis of a limited power of attorney.
PAMM multiple account manager forex allows the trader on one trading platform to manage simultaneously unlimited quantity of managed accounts. Depending on the size of the deposit each managed account has its own ratio in PAMM. Trader's activity results trades, profit and loss are allocated multiple account manager forex managed accounts according to the ratio. Because currency trading and other forms of arbitrage achieve profitability within very narrow margins, typically, a PAMM system allows more money to be brought into play while distributing the risk of one trader across usually multiple investors.
Depending on funded amounts different ratios are applied for managed account for ratio calculation all amounts are converted in USD equivalent based on market rate.
The trader's own money remains at risk, which theoretically reduces the multiple account manager forex of irresponsible management of the combined funds.
Depending on which currency with which the customer has funded their own account, the ratio calculation of each customer's share is typically converted to United States dollar amounts.
In this infographic example, there are four investors each with a different amount of risk capital that choose the same money manager. From Wikipedia, the free encyclopedia. The Ed Ponsi Forex Playbook: Strategies and Trade Set-Ups. John Wiley and Sons. Retrieved 8 October Retrieved from " https: Foreign exchange market Financial software.