Not every retail trader is a professional day trader. Since the learning curve in forex trading may involve some losing trades, account management helps novice retail traders avoid burning through their accounts while benefiting from the knowledge and experience of professional traders.
A managed trading account is a professionally managed trading account where a professional trader handles Forex trading. This type of trading can be worthwhile for beginners and advanced traders alike. The idea of the managed trading account is not limited to Forex trading but can be found in all areas of trading. It is fundamentally important to know that a professional account manager takes over the task of trading here.
The advantage of account management is that you do not need any knowledge or experience of forex trading to trade forex. In addition, because the Forex Account Manager automatically takes over the trades, i.e., assets are automatically bought and sold.
How to choose a reliable Forex account Management in India?
- The seriousness of the provider
A PAMM Forex account manager must, above all, be one thing – serious. Furthermore, it does not matter whether the provider works seriously and whether the PAMM Forex Account Manager is competent. This should be based on the success rate and the findings of the manager.
- Proven track record
You must select an account manager with a proven track record and verifiable trading results. Remember that there is no account manager with a 100% success rate. More so, ensure that they have a solid money management technique since as an investor, you are taking more risks than the account manager.
- Costs and Fees of a PAMM Forex Account
As a rule, various fees are incurred here, which reduce the return. The most common fees include the management fee and a surcharge on the exchange rate. You should be aware of how much fees are incurred and how much the PAMM Forex Account Manager retains – should he complete successful trades.
Forex account management in India is typically divided into PAMM and MAM accounts.
What is a PAMM Account?
PAMM is an abbreviation of Percentage Allocation Management Module. A PAMM Forex account works very similarly to an investment fund. You entrust the capital, so to speak, to a third party, who then works on behalf of the customer with exactly this capital and concludes trades. This allows you to interact with the financial markets without having any experience with forex trading yourself.
Furthermore, the PAMM Forex Manager you choose will deal with day trading strategies instead of buying or holding assets for a few months or even years. In addition, some also invest their capital in the client’s capital. In return, a PAMM Forex account manager receives a commission for all the profits he makes for his clients. This commission is deducted even before the profit is distributed to the customer.
How do PAMM Forex accounts work?
PAMM is a form of forex trading in which one deposits capital into a pool of money. Typically, three participants are needed to set up the PAMM account – the brokerage firm, the account manager, and the investors. The brokerage firm monitors that everything is processed within the law and provides quality services to its clients. The money manager or trader manages the accounts and the investors who fund the trades. These traders or PAMM Forex account managers can manage multiple forex trading accounts with their capital and pooled funds to make profits. And finally, the investors who pool their funds into the PAMM account. Before investors can commit, they sign an agreement, an LPOA – a limited power of attorney. The LPOA would then specify the percentage of the management fee in return for its services.
A PAMM Forex account is like a diversified portfolio, with everyone who invests capital also owning a share of that portfolio. In general, a PAMM Forex account consists of several customers (investors) and the trader (the PAMM Forex Account Manager).
For example, the manager opens a PAMM Forex account and invests capital in it. As an investor, you decide on a PAMM Forex account manager and invest capital in this account. In addition to you, other investors would then deposit capital into this account, which the manager then manages. He then conducts trades on the foreign exchange market on your behalf and behalf of all other investors.
Depending on the amount of the capital deposit, you will then be entitled to the profits that a PAMM Forex account manager makes through his trades. So, for example, if your investment makes up 20% of the PAMM account, you will also get 20% of the PAMM Forex account’s profit.
A distinctive feature of this system is the ability to pool several investors into one account simultaneously. In all cases, the profit and loss received will be distributed among all participants according to the size of their investments. At the same time, the account manager is interested in making the biggest profit because the more efficiently they trade, the higher the profit he can bring both to investors and themselves.
The MAM Account
MAM stands for “Multi-Account Manager “. As the name suggests, this is also a trading terminal that allows several accounts to be managed. However, unlike the PAMM, the MAM can distinguish between assigning trades from the master account to the sub-accounts.
How do MAM Forex Accounts Work?
MAM accounts are a derivative of the PAMM Forex account since the division of transactions between master and investor accounts cannot be proportional.
Every investor can choose which risk he wants to take and which leverage he wants to use in his account. In other words, trades can be copied with different multipliers that depend on the investor’s risk appetite. In MAM accounts, copied trades are usually executed as separate transactions and always visible on investor trading accounts.
Similar to PAMM Forex accounts, investors cannot trade individually on the managed accounts, but you can disconnect from them at any time. However, in MAM accounts, the balances of the main accounts are separated from the balances of the affiliated investors, which can lead to different returns. mostly
MAM accounts are intended for investors who choose their own risk and want more flexibility in managing their funds. Thus, a MAM account is an advanced managed account type that provides excellent control for an investor and has several features available for both PAMM and LAMM accounts.
In addition to the already shown percentage distribution, a fixed distribution can also take place by lots. For example, you can specify that account 1 always gets 3 lots, account 2 always gets 5 lots, etc. However, this only makes sense if you always use the same order size per trade. Furthermore, it is possible to distribute the trades according to a certain ratio. For example, account 1 can always get 1 lot; account 2 can always get 3 times of account 1, account 3 can get 2 times of account 1, etc.
Best Brokers with Forex Account Management in India
Below are some of the most credible brokers that offer reliable Forex Account Management services in India. We have listed down a few important specifications you should know about each of the brokers, along with their regulatory status.
FXTM
Minimum deposit: $10
Maximum Leverage: 1:1000
Trading Platforms: MT4, MT5, FTXM Trader
Regulation: CySEC, FCA, FSCA
Oanda
Min. deposit: no minimum deposit
Max. Leverage: 50:1
Trading Platforms: Oanda trade, MT4
Regulation: CFTC, NFA, FCA, MAS, ASIC, IIROC
IC Markets
Min. deposit: $200
Max. Leverage: 1:500
Trading Platforms: cTrader, MT4, MT5
Regulation: ASIC, CySEC
eToro
Min. deposit: $200
Max. Leverage: 1:400
Trading Platforms: eToro Platform (online)
Regulation: CySEC, FCA, ASIC
HYCM
Min. deposit: $100
Max. Leverage: 1:200
Trading Platforms: MT4, MT5
Regulation: FCA, CySEC, DFSA, CIMA, FSC
Pepperstone
Min. deposit: $200
Max. Leverage: 1:500
Trading Platforms: MT4, MT5, cTrader
Regulation: ASIC, FCA, DFSA, SCB, CMA, CySEC, BaFin
HotForex
Min. deposit: $5
Max. Leverage: 1:1000
Trading Platforms: MT4, MT5
Regulation: CySEC, FCA, DFSA, FSCA
FP Markets
Min. deposit: $100
Max. Leverage: 1:500
Trading Platforms: IRESS, MT4, MT5
Regulation: ASIC, CySEC
XM
Min. deposit: $5
Max. Leverage: 1:888
Trading Platforms: MT4, MT5, XM WebTrader
Regulation: CySEC, ASIC, IFSC
AvaTrade
Min. deposit: $100
Max. Leverage: 1:400
Trading Platforms: MT4, AvatradeGo
Regulation: Bank of Ireland, ASIC, JFSA, FSCA
We hope you find this article about ‘Forex Account Management in India’ useful and informative. In case of any questions, kindly let us know in the comments below. All the best.