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MAM vs PAMM Forex Accounts: Overview and Differences 


MAM vs PAMM Forex Accounts: Overview and Differences 
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MAM vs PAMM Forex Accounts: Overview and Differences 

Vantage Updated Updated Fri, 17 March 2023 08:40
MAM vs PAMM Forex Accounts: Overview and Differences 
MAM account

Multi-Account Manager (MAM) and Percentage Allocation Management Module (PAMM) are an emerging and exciting trend in the world of forex investing. 

Both of these are types of investment accounts that allow retail investors to tap on the expertise of professional traders, while facilitating traders in expanding their audience reach.  

While MAM and PAMM share some commonalities, they are both different money management solutions that cater to different needs for investors and traders alike.  

Here’s an overview of MAM and PAMM forex accounts, their core differences, and what to look out for when choosing between the two.  

MAM/PAMM – Money Management Solutions 

What is a MAM account? 

A MAM forex broker account allows professional traders to manage multiple client accounts from a single master account.  

The master account is controlled by the trader, and is linked to several sub-accounts, each owned and controlled by a different individual investor. The funds of the investors are pooled together and managed by the trader.  

In a MAM account, the trader can allocate trades and manage risk on the master account.  

As the trader executes trades in the master account, the same trades are automatically replicated on the individual sub-accounts according to the allocation percentage.  

Traders can also make manual adjustments to allocation percentages, designate different volumes to different sub-accounts, or group sub-accounts together for different trading strategies. 

Investors can view their sub-accounts in real time but they can’t intervene to alter or close trades placed by the master trader. Investors can also choose to deposit and withdraw funds from their sub-accounts at any time. 

What is a PAMM account? 

A PAMM account is a type of investment account offered by some forex brokers, which allows retail investors to allocate their funds to be managed by experienced traders. 

An investor deposits funds into a PAMM account, which are then pooled together with funds from other investor accounts. The appointed trader or investment manager then makes investment decisions on behalf of the group.  

Each investor’s share in the account is proportional to the size of their investment, and the profits or losses are distributed accordingly. The trader typically charges a management fee for their services, which are deducted from the account’s profits. 

PAMM accounts allow investors to take advantage from the expertise of professional traders without having to actively manage their investments on their own.  

Additionally, qualified traders who manage PAMM accounts will be screened and vetted by forex brokers beforehand. Hence, investors will be able to view information such as performance history and investment strategies to help them make informed decision. 

MAM vs PAMM – What’s the difference? 

MAM (Multi-Account Manager)  PAMM (Percentage Allocation Management Module) 
Allows traders to seamlessly execute trades across multiple client accounts. Allows investors to tap on the expertise of professional traders.  
Funds in client sub-accounts are pooled together to provide capital for trading. Investors and traders pool their funds together to trade. 
Through a master account, traders plan and execute trades that are automatically replicated across client sub-accounts. Investors and traders share in profits or losses in proportion to their share of the pool. 
Investors can only view open trades in real-time but they do not have the ability to open or close trades placed by the MAM Master.Investors only make investment decisions at the start of each investing round, after profits or losses from the previous round have been settled. 

PAMM account

MAM or PAMM – Which should you choose? 

You should consider MAM or PAMM based on factors such as your experience level, goals and objectives.  

Note that MAM and PAMM can both be used by retail investors who invest for personal investment, as well as professional traders with a career managing investments on behalf of clients. 

Hence, for clarity, we will examine both platforms separately.  

Who should choose a MAM account? 

In general, MAM accounts are catered towards: 

  • Professional traders looking to scale up their client list and increase their earning potential. 

  • Advanced investors who want to invest through professional traders.

In fact, MAM accounts are designed to execute trades across different client sub-accounts in tandem with trades executed by the master account. Instead of having to make multiple trades on every single client account one by one – traders simply only need to make one trade.  

As you’d expect, this creates massive savings in time and effort, which enables professional trades to significantly increase the number of clients they can represent. In turn, this raises the earning potential of traders. 

For investors, MAM accounts facilitate access to expertise and knowledge of professional traders, while offering a degree of flexibility. With an MAM account, an investor can freely choose to withdraw and deposit funds at any time. 

Who should choose a PAMM account? 

Generally, PAMM accounts are geared towards 

  • Hands-off investors who want to ride on the expertise and knowledge of experienced traders 

  • Traders who want to expand their earning potential by earning commissions and trading with a larger capital  

PAMM accounts offer investors access to forex market opportunities even if they lack the time, knowledge or inclination to make trades on their own. Investors need to select a professional trader, who is then responsible for trading on their behalf.  

Because the traders appointed as investment managers also allocate their own funds alongside investors, investment risk is shared among all parties involved. Profits or losses are distributed according to each party’s share of the pool. 

The pooling of funds benefits professional traders as it furnishes them with a larger capital to trade with, potentially overcoming high capital requirements mandated by certain markets or strategies.  

Importantly, traders representing a PAMM investing pool are also entitled to a cut of any returns made, which is paid out before profits are distributed.  

This is on top of the share of profits that the trader is entitled to for participating in the pooled funds. 

Experience the benefits of Vantage MAM and PAMM 

Vantage’s MAM Account and PAMM Account offers best-in-class trading capabilities and account management functions that facilitate Fund Managers and Investment Managers to seamlessly pool investor funds, manage multiple client investments, and custom trading strategies groups.  

Whether you’re a retail investor looking for more features, or a professional trader seeking to take things to the next level, Vantage MAM Account and Vantage PAMM Account can be for you. Talk to us to learn more today.  

Join the Vantage Introducing Broker Program, recognised as the Best Introducing Broker Program in 2023 by the International Business Magazine. By leveraging the Vantage MAM Account, you have the opportunity to amplify your potential earnings.

Any information/content/material is intended for educational purposes whereas Vantage does not represent or warrant that the material provided here is accurate, current, or complete and cannot be held responsible for any miscalculation/mistake or omission. Any reliance on such information is strictly at your own risk. The information provided here, whether from a third party or not, is not to be considered as a recommendation; or an offer to buy or sell; or the solicitation of an offer to buy or sell any financial instruments; or to participate in any specific trading strategy and/or as investment advice. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. Please seek advice before making any trading decision. Past performance is not an indication of future performance. The information provided is not intended for distribution to, or use by, any person in any country where such distribution/use would be contrary to local laws.

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