Pamm PAMM account - Money Management - PAMM Technology - Forex - Percentage Allocation Management Module
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Money Management. PAMM Technology.

Seeing the need for a new investing tool that can make cooperation between Money Managers and Investors more effective, honest, flexible and transparent, FXOpen has put our best efforts to develop and bring to you an innovative, full-featured PAMM service!

With the first ever MT4 ECN trading platform coupled with PAMM accounts we hope to solidify our position as an MT4 technology innovator and continue providing our clients with all you need to get the most and the best from Forex trading: exclusive trading conditions, reliable order execution and dedicated support.

We wish you a profitable investment.

Introduction into PAMM technology Read more

 

Trader A opens a PAMM account and becomes its Manager. The Manager’s Capital is 10 000 USD (pic.1). Then he makes a proposal to potential Investors to invest in his PAMM account. At the end of every Trading interval (a month or a quarter) Manager A proposes to share the profit between the Investors (including the Manager) and pay the profit to Manager A in accordance with the Manager’s Offer.

Let the Offer parameters be: 30/5/10 - 6/4 - 10 000/1 000/100,

Selected Trading interval - 1 month.

So, at the end of every Trading Interval, the Manager is paid 30% of the profit that exceeds the 10%.

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Pic. 1. PAMM account 10 000 USD

Investor 1 and Investor 2 decided to invest their funds to the PAMM account of Manager A. Investor 1 invested 25 000 USD and Investor 2 invested 15 000 USD to the PAMM account of Manager A.

So, the PAMM account deposit equals to 50 000 USD (pic.2).

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Pic. 2. PAMM account balance at the start of the first Trading interval

At the end of the month as a result of the Manager's successful work the PAMM account profit amounted to 50% (25 000 USD) of the initial deposit (50 000 USD), and the total balance of the PAMM account amounted to 75 000 USD.

Thus Investor 1 got the profit equal to 50% (12 500 USD) of his own investments (25 000 USD). In accordance with the Offer Parameters the Minimum Performance constraint is 10% (2 500 USD), therefore Performance Fee is calculated from the following amount:


12 500 USD (Profit) — 2 500 USD (Minimum Performance constraint) = 10 000 USD.


 

Investor 1 paid the Performance Fee of 30% from 10 000 USD (3 000 USD) (pic.3).

Investor 2 got the profit equal to 50% (7 500 USD) of his own investments (15 000 USD). In accordance with the Offer Parameters the Minimum Performance constraint is 10% (1 500 USD), therefore Performance Fee are calculated from the following amount:


7 500 USD (Profit) — 1 500 USD (Minimum Performance constraint) = 6 000 USD.


Investor 2 paid the Performance Fee of 30% from 6 000 USD (1 800 USD) (pic.3).

The Investor’s balance at the end of the Trading Interval is:


Current Balance = Initial Balance +Profit – Performance Fee.


So,

1) For Investor 1: Current Balance = 25 000 +12 500 - 3 000 = 34 500 USD;

2) For Investor 2: Current Balance = 15 000 + 7 500 - 1 800 = 20 700 USD.

 

The Manager’s balance at the end of the Trading Interval is:


Current Balance = Manager’s Capital +Profit + Performance Fee 1 + Performance Fee 2.


 

So, for Manager A

Current Balance = 10 000 +5 000 +3 000 +1 800 = 19 800 USD.

Manager A's work on the PAMM account during the first Trading interval resulted the net profit of 25 000 USD:

Investor 1: 12 500 – 3 000 = 9 500 USD;

Investor 2: 7 500 – 1800 = 5 700 USD;

Manager A: 5 000 + 3 000 + 1 800 = 9 800 USD (5 000 — profit, 4 800 — Performance Fee).

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Pic. 3. PAMM account balance at the end of the first Trading Interval

At the beginning of the second Trading interval Manager A withdrew the profit (9 800 USD), Investor 1 completely reinvested (reinvestment — building-up of the earlier placed investments using the profit realized of these investments) all the funds (34 500 USD), Investor 2 withdrew 700 USD and reinvested the remaining funds (20 000 USD) (pic. 4).

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Pic. 4. Reinvestment and Withdrawal of funds

Another Investor 3 joined the PAMM account and invested 5 500 USD (pic.5).

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Pic. 5. The PAMM account balance at the start of the second Trading interval

Thus at the beginning of the second Trading interval the balance of the PAMM account is equal to 70 000 USD.

At the end of the second Trading interval as a result of the successful work of Manager A, the PAMM account profit amounted to 100% (70 000 USD) of the initial balance and the total PAMM account balance amounted to 140 000 USD.

Thus Investor 1 got the profit equal to 100% (34 500 USD) of his own investments (34 500 USD). In accordance with Offer Parameters the Minimum Performance constraint is 10% (3 450 USD), therefore the Performance Fee is calculated from the following amount:


34 500 USD (Profit) — 3 450 USD (Minimum Performance constraint) = 31 050 USD.


 

Investor 1 paid the Performance Fee of 30% from 31 050 USD (9 315 USD) (pic.6).

Investor 2 got the profit equal to 100% (20 000 USD) of his own investments (20 000 USD). In accordance with the Offer Parameters the Minimum Performance constraint is 10% (2 000 USD), therefore the Performance Fee is calculated from the following amount:


20 000 USD (Profit) — 2 000 USD (Minimum Performance constraint) = 18 000 USD.


 

Investor 2 paid the Performance Fee of 30% from 18 000 USD (5 400 USD) (pic.6).

Investor 3 got the profit equal to 100% (5 500 USD) of his own investments (5 500 USD). In accordance with the Offer Parameters the Minimum Performance constraint is 10% (550 USD), therefore the Performance Fee is calculated from the following amount:


5 500 USD (Profit) — 550 USD (Minimum Performance constraint) = 4 950 USD.


 

Investor 3 paid the Performance Fee of 30% from 4 950 USD (1 485 USD) (pic.6).

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Pic. 6. PAMM account balance at the end of the second Trading interval

The Investors’ balances at the end of Trading Interval are:

1) For Investor 1: Current Balance = 34 500 +34 500 – 9 315 = 59 685 USD,
Performance Fee = 9 315 USD (30% from 34 500 USD).

2) For Investor 2: Current Balance = 20 000 + 20 000 – 5 400 = 34 600 USD,
Performance Fee = 5 400 USD USD (30% from 18 000 USD).

3) For Investor 3: Current Balance = 5 500 + 5 500 – 1 480 = 9 515 USD,
Performance Fee = 1 485 USD (30% from 4950 USD).

The Manager’s balance at the end of Trading Interval is:   Current Balance = 10 000 +10 000 + 9 315 + 5 400 + 1 485 = 36 200 USD.

 

Manager A’s work on the PAMM account during the second Trading interval resulted the net profit of 70 000 USD:

Investor 1 — 25 185 USD;

Investor 2 — 14 600 USD;

Investor 3 — 4 015 USD;

Manager A — 26 200 USD (10 000 — net profit, 16 200 — Performance Fee).

Note! In accordance with the Offer Parameters Management fee is equal to 5%. So, the corresponding amounts are transferred to the Manager from Investors’ accounts daily. See Offer Parameters for more details.

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Please, take these steps to open a PAMM account and become a Manager:

1. Register on FXOpen forum. To do that:

Click Forum in the main menu;

To register on FXOpen forum click Register;

Fill in the Register forum form and click Complete Registration.

Note! You can use your existing Forum login and password if you have registered earlier.

 

2. Click Open an Account NOW! on the FXOpen homepage.

3. Choose Standard or ECN account type and click Next.

Note! You cannot use Micro account to create a PAMM account.

 

4.Choose the account type depending on the type of owner.

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5. Please, read and accept the documents attached to the form, before you register a real money account. Then click I Agree.

6. Fill in the Account Opening Form and click Next.

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Note! If you have chosen Joint or Corporate account type, you should provide information about the Secondary participant for a Joint account or information about your Company for a Corporate account.

 

7. Provide information about your trading experience and click Next.

8. Provide information about your financial status and click Next.

9. Make sure you have entered all details correctly, select the confirmation check box and click Complete the Process. If you’ve found an error click Edit button and correct information.

If you complete the process successfully, you will see registration data for your new trading account.

Note! Please record the PIN Code in a safe place. It will be shown ONLY ONCE! The PIN Code is required to confirm funds withdrawal from your account. The login name and the trader password are used to login to your account in the trading terminal and My FXOpen cabinet.

10. Deposit not less than the Minimum Manager's Capital for PAMM accounts.

11. Login to My FXOpen cabinet by clicking My FXOpen. You must enter your login (account number) and the Trader password:

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12. Click Add New Account/PAMM. You can create:

a PAMM-Standard account if you are a holder of a Standard account;

a PAMM-ECN account if you are a holder of a ECN account.

Note! The Minimum Deposit (Manager’s Capital) for a PAMM-Standard account is 1000 USD and the Minimum Deposit (Manager's Capital) for a PAMM ECN account is 5000 USD.

13. Fill in the registration form to create your PAMM account.

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Let us view in details all fields in the PAMM Manager: Open New Account form.

a) Account name — the name of your PAMM account which the Investors will see the when they accept your Offer, it can outline your trading style. Account name is also used:

in your account rating;

in your forum thread.

b) Phone Password — any word or a combination of words that is easy for you to remember. If FXOpen gives you a phone call, we will ask for your name, address and possibly the phone password to verify your identity.

c) Fill in the field Repeat Phone Password to confirm your phone password.

d) Forum Login — your FXOpen Forum login.

e) Forum Password — your FXOpen Forum password.

f) Deposit — the size of Manager’s Capital. It must not be less than the Minimum Manager's Capital.

g) Updating of Investors’ Account — you can choose the renewal periodicity of Investor's Statement. It can be “daily”, “weekly”, “monthly” or “quarterly”.

h) Check box Show equity to all — select this option if you want to show the total equity of the account and the Equity tab to all your Investors and others who monitor your account performance (see Rating and Charts).

i) Check box Show currencies to all if you want to show the Summary tab in Advanced Statistics of the account to all your Investors and others who monitor your account performance (see Rating and Charts).

j) Select the check box Show Statements to all if you want to show the Statements tab in Advanced Statistics of the account to all your Investors and others who monitor your account performance (see Rating and Charts).

14. Read and accept the document PAMM account Service Regulations.

15. Click Create.

Your request to open a PAMM account will be checked by the one of FXOpen staff members. If the request is approved, you will receive an e-mail from FXOpen detailing your PAMM account registration information. You will also see a special thread on the FXOpen Forum with your PAMM account name. Use this thread to communicate with your Investors.

Note!

PAMM accounts have fixed leverage of 1:100.

Your Standard or ECN trading account must be VERIFIED before you create a PAMM account. See Verification procedure.

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You can become an Investor if you are an FXOpen client with a Standard or an ECN account and you have funds in your account.

Note!

Your Standard or ECN trading account must be VERIFIED before you become an Investor.

If your account is not verified yet, please, see Verification Procedure.

The first step to become an Investor is to accept a Manager’s Offer for one of PAMM accounts.

When you accept the Offer, you also make a request to transfer funds from your current trading account to the chosen PAMM account.

Please follow these steps:

1. Login to My FXOpen area.

2. Click PAMM/Accounts to see available PAMM accounts. You can sort the list of PAMM accounts by the following fields:

Account name. Use the search box for rapid access to the selected account;

Total Gain, % — total gain of the PAMM account;

Daily Gain,% — profit in comparison with the previous day;

MaxDrawDown, % — maximum decline from the historical peak to the following historical bottom on the account performance chart. It shows the maximum loss ever made in the account;

Created — the date when account was created;

Currency — the three-character code specifies the currency of the PAMM account;

Manager’s Capital — the size of the Manager’s Capital.

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3. Select a PAMM account with the active Manager’s Offers. Clear the check box Active Offers Only to view all PAMM accounts (including accounts with inactive Manager’s Offers).

4. Select the PAMM account name to view detailed information about this account. Charts are intended for detailed analysis of account prospects.

5. Choose one of the Offers and click Join in the following table.
Note! To limit the number of Investors, the Manager may set password-protected access to his Offer. If you don't know the Offer password, please, contact the Manager via the PAMM account thread in FXOpen Forum and ask to provide the password to you. Please see Offer Parameters.

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6. Make sure you have read and understood the Offer Parameters, enter the sum of money you are going to invest into the Amount field. You can change the Date to Execute (default value is the current date).

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7. Read and accept the document PAMM Account Service Regulations.

8. Enter your personal PIN Code and click Submit Request.

Note! If you submit your request before 12:00 server time (noon), it will be processed at the Current Rollover.

If you submit a request after 12:00 server time (noon), it will be processed at the Next Rollover. FXOpen  server time is GMT+2 (or CET +1).

Example

Request A was submitted at 09.00 server time (noon), August 9. It can be cancelled till 12.00 server time (noon), August 9. Otherwise, the request will be processed during the Current Rollover. Request B was submitted at 12.01 server time (noon), August 9. The request will be processed during the next Rollover if it is not cancelled till 12.00 server time (noon), August 10.

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