Trading is a risky business and traders must possess the required skills and knowledge to be able to navigate the forex market. When it comes to the profitability for trading in forex, only a small percentage of forex traders can manage to make a profit, since the forex market requires you to have a high level of perseverance and patience to stay on top. Thus, making consistently profitable forex gains is not easy, particularly if you lack the necessary qualities listed above. This is the reason why most traders prefer managed accounts.

In simple terms, let investors across the world meet fund managers. These fund managers are responsible for the management of portfolios and accounts of traders. Different brokers provide different managed account platforms based on the needs of investors as well as traders. MAM and PAMM accounts are two of the most well-known kinds of managed accounts which we have discussed in this article.

PAMM accounts (Percentage Allocation Money Management) allows investors to earn money without trading. These traders receive a percentage of the profits they earn by trading your funds. Basically, it’s a method which allows the investor to allocate their own money in their preferred proportion to a manager (experienced trader) of their preferred choice. These managers/traders are proficient in managing forex trading accounts using their own funds as well as through the capital of the investors with a goal of generating gains. In a way, the method allows traders to invest in trading systems even when they lack sufficient funds .

There are three major participants of the PAMM account set-up: Forex Brokers, Investors, Traders/Money Managers, & Investors. Let’s look at an example to illustrate this notion. Let’s say an investor is looking to earn profits through forex trading but lacks the time and skills to trade Forex. An expert trader is a person who has the ability to trade and manage other people’s funds (e.g. the mutual fund manager) their own funds. 

The forex brokerage appoints the professional trader as the money manager. The client also agrees to an agreement that allows them to provide their capital to the money manager for trading in accordance to the style of trading he prefers and strategy. This also specifies the percentage of money the manager will receive .

MAM accounts permit traders to manage multiple terminals. Every transaction that is made through the master account is recorded on the associated MAM accounts based on the factors established. Investors are also free to make orders using their individual trading accounts. They also are able to alter MAM trades according to their requirements. are a controlled account with more control for investors. are thought to be the ideal choice for experienced traders who want to actively be involved in each investment related decision. MAM (Multi Account Management) accounts are suited to traders with an extensive understanding of the market & are comfortable with high-risk investments.