What is a PAMM Account in Forex?

Introducing Chump Profit Managed Forex Account

You may have noticed that some Forex / CFD brokerages, usually the larger ones, offer a “PAMM Account”. This is an established alternative to the recently introduced fad of "copy trading".


What is this type of account?

Simply put, “PAMM” stands for “percentage allocation management module” or “percentage allocation money management”.

In other words, a PAMM account is basically a managed account where one experienced trader trades on behalf of others through his or her account. PAMM accounts work by the Forex / CFD brokerage using a software application which allows the brokerage’s clients the ability to assign part or all their account to management by a particular trader. The managing trader then trades his own money but piggybacked onto that is the money of other clients, who each receive a percentage share of the profits or losses made by the trader into their own accounts.

Chump Profit, founded by experienced traders Gary Gilbert and Kyriacos Kyriacou have teamed up with a leading brokerage TopFx to provide this service to selected clients and referrals.


We chose TopFx after considerable research and testing out strategies on various platforms and TopFx, ticked all the boxes.


PREMIUM LIQUIDITY

We were looking for reliable liquidity and a stable price stream?


They provide combined aggregated, DMA, Tier-1 liquidity with ultra-low latency connectivity to deliver highly customisable liquidity solutions to brokers, investment firms, hedge funds, proprietary trading firms and other institutional clients, like Chump Profit.


MULTI-ASSET LIQUIDITY

across Forex, Metals, Energies, Indices and other CFDs


OPTIMAL EXECUTION SPEED

and pricing through smart-routing technology


ULTRA-LOW LATENCY

via their Equinix Data Centres in LD4 and NY4. New York & London.


The role of forex broker is to:

  • Provide a secure, reliable platform that allows money managers and investors to interact

  • Facilitate the trading activities of money managers within the realms of allowed regulations

  • Facilitate the account keeping, deposits, withdrawal, and related activities

  • Apart from a usual trading business platform, allow transparent review, feedback, rating, and related mechanisms for investors and money managers to select and interact with each other


How does it work for our clients?

Let’s imagine that you are a retail trader with your own forex account but you wish for an experienced trader to trade on your behalf, a PAMM account may be right for you.

Example. Figures used are for simplicity purposes.


Imagine you are a retail trader with your own forex account and you wish for an experienced trader to trade on your behalf.

Let’s say, Chump Profit (your chosen manager) has $10,000 of capital and Trader B invests $40,000 and Trader C invests $50,000 to manage.

We are now trading a total of $100,000 with Chump Profit percentage allocation being 10%. Trader B’s allocation being 40% and Trader C's allocation being 50% in line with the percentage contributed to the total fund by each trader.


Chump Profit will put in an order to buy 1 full lot of EUR/USD. Top FX will allocate the order between the parties for this trade as follows: 0.1 lot to Chump Profit, 0.4 lots to Trader B, and 0.5 lots to Trader C.


Advantages of PAMM Account

A PAMM account allows a trader to manage other people’s money with ease, just by trading normally through his existing platform. The PAMM software makes all the required calculations. There is effectively no limit to the number of “clients” the holder of a PAMM account can manage money for. The account manager can profit from their own trading and take a percentage of the profits from the money he or she manages as well. When the trading goes well and is profitable, it is a win-win all round.


One special advantage that a PAMM account has for the investor is that the investor knows that the trader is risking their own funds, and has “skin in the game”, which would tend to increase confidence that the trader will be working in the style they truly believe in, to the very best of their ability.


PAMM accounts are policed by the broker, and investors have peace of mind as they know that the money manager has no power to access the actual funds contributed as a withdrawal from the brokerage. Contrast this with a situation where the investor must write a check and hand it over to a money manager, and you’ll instantly see a big advantage of a PAMM account.


You only pay Chump Profit if they make profits, performance fees will be charged monthly, no additional fees are applicable, the client is automatically allocated a share of the fund monthly.


The Bottom Line

The Chump Profit PAMM account is a simple hassle-free method for our clients to benefit from the fast paced financial markets where high volatility can bring huge potential profits in a short period of time. We are very aware that most retail forex traders with no experience are highly likely to lose their funds. At Chump Profit we have developed strategies and risk management techniques that have proven over time our success.

With our Chump Profit Managed Forex account , investors benefit from profits with minimal involvement. However, in reality PAMM accounts also carry the risks of capital loss, based on a money manager's performance. Therefore, please consider due diligence and we will be delighted to answer further questions directly to new investors. We work on a referral basis and clients choose us for our reputation for delivering profitable returns.

Money Managers

Have access to the money only in their pool. They cannot pull money from investor’s trading accounts. Can set a minimum and a maximum amount criteria for investors.

Can accept or deny new investors as they wish.


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