PAMM system: a view from 2 angles
Who am I?
As a rule, the PAMM system is referred to as an investment method or as a way to increase the efficiency of Forex trading. There is usually no middle ground, which means, inexperienced readers may have a vague idea of what the PAMM system is like. So, they may continue their search for financial happiness in other places. That's not a surprise: while reading about the advantages of investing in PAMM accounts, they don't understand why successful professional traders should want to share their profits with others. Neither do traders understand why someone is willing to entrust their money to another person. Also, those articles don't provide a clear idea to those who haven't decided yet which side to take: become a trader or an investor.
Am I a manager?
To start with, a PAMM manager is a Forex trader who wishes to boost his/her earning opportunities through a PAMM account he/she manages. The profession of a trader implies making profits from the difference between currency rates. With the help of a broker, traders buy and resell currencies and earn from the instability of currency rates. As you can see, the higher a trader's account deposit is, the higher his/her income will be.
However, even if a trader has already got the necessary experience, learnt to control risks and is ready to "raise the stakes", he/she may not have enough funds to do so. That's what the PAMM system is intended for. A professional trader registers in the system, opens a PAMM account and sets a percentage of his/her profits he/she’s ready to share with the investors. The more attractive a trader's PAMM account is, the higher an investment rate is. Such factors as profitability, ranking, and account age help to assess a PAMM manager. These factors are recorded and saved by the system. How does a trader benefit? Thanks to the investors' funds, his/her trading volumes are growing. Trading just like before, he/she sees the profits growing too, owing to a larger deposit.
Am I an investor?
You have got some money. Some spare money. You dread it losing value because of economic crises which are becoming more and more frequent these days. You can't decide which foreign currency to hold since you are neither an economist nor a financier. You don't want to trade in the currency market because your main occupation is different. What you do want is your money working for you. Working without your direct participation and yielding you passive profits. So, the PAMM system is a perfect match for your requirements. After registration, you get access to the information on the PAMM accounts registered in the system. You can see if they are successful, who's more inclined to risks, who's less aggressive, what profitability factors are, how much a trader is ready to share with investors, and the like. Having analysed all those factors, you can choose an account and invest in it. Next, you will receive your profit percentage on the prearranged rollover date according to the manager's trading results. You only have to choose a trader and make an investment. The rest isn't your concern. Your money is increasing while you have lots of free time to do what you want. At the same time, you can always withdraw your money from the PAMM account, exit the system, choose another trader or invest in multiple traders. That's your right.
For more details on the PAMM system (calculation examples, percentage and profit tables), please visit LiteForex's site.
And I hope you will successfully find your place in this system!