Multiple forex account management
A percent allocation management modulecommonly known as PAMMalso sometimes referred to as percent allocation money managementdescribes 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 solution 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 multiple forex account management, profit and loss are allocated between 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 chance of irresponsible management of the combined funds. Depending on which currency with multiple forex account management the customer has multiple forex account management their own account, the ratio calculation of each customer's share is typically converted to United States dollar amounts.
In this multiple forex account management example, there are four investors each with a different amount of risk capital that choose the same money manager.