How to choose a PAMM account or foundations of a trust investment

You’ll need
  • first of all the desire to get richer! This is where the life stories of everyone you can find in the lists of Forbes and other similar publications began.
  • Then you’ll need capital: start better small, and the size of that “small” each determines for themselves. In school years I started with the amount of $10, which after a year, with constant reinvestment of the received interest of the profit, as well as constant introduction of new funds allowed me to buy my first car (albeit Russian made, albeit supported).
  • You can now start choosing a PAMM account directly.

In this step, there will be the simplest recommendations. Further it will be harder, but these should be taken for the canons of choosing the manager of the PAMM account

– Trade time. I prefer to trust a trader with an account management experience of at least 1 year. Only if I haven’t heard about the manager in person.

– Drawdowns. By this term, we mean the periods of account activity when there is a loss of funds. If you see drawdowns up to 90%, then know – the trader tends to get seriously wrong. And even if he got out of this situation – such a case can be called a miracle, not a pattern.

– The amount of personal capital. Personally, I don’t pay attention to it. Neither the large size nor the small size of the share of personal funds of the manager in any way indicates his professionalism. So I just keep that information in my mind.


Do not count on past interest yields stated in account history.

The amount of leverage (borrowed funds allocated by a broker to a manager for trading) depends on the number and, most importantly, on the volume of transactions. That is, if at the stage of its formation the account had a leverage of 1:200, then with the increase in the amount of the account it may decrease to 1:5. And this will have a very negative impact on yields.

There is one of the laws of business: small risk – small profit. By investing in large accounts you reduce the risk of losing your funds, but also lowering your income from them.


Invest on drawdown.

No trader is immune to the downturns of their efficiency. And if you’re observing on the chart a long trend of rising account yields – there’s likely to be a severe (or not very) downturn soon.

Most invest exactly at the peak of yield, and withdraw at drawdown. Be smarter, invest on drawdowns, and withdraw funds at the peak of account yield.


Avoid young and extremely effective PAMM accounts.

They are called “Rockets” or “Astronauts”. These are accounts, aged about 3-6 months, showing very high returns. It’s not a sign of professionalism. It’s a sign of a PR company account. After all, gaining high interest, the account falls into the top lines of the rating, thus attracting new investors.

Be careful with bills like this. Interest is tempting, but no guarantees they bear.


And at the end, the most important criterion of investing for me: “Diversification”.

As the old saying goes – don’t keep all your eggs in one basket. By breaking your capital into parts, each of which you entrust to an individual manager, you insure yourself against the risk of losing everything at one point.

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