Main Features
🧑💼 1. Consolidation of Accounts
All investment accounts are unified into a master trading account, known as a PAMM account. This consolidation ensures streamlined management of funds for all investors.
Benefit: Simplifies account management for the money manager while ensuring consistent trading strategies for all investors.
🔒 2. Access Control
Only the money manager has trading access to the PAMM account. Investors are not authorized to execute trades directly.
Benefit: Ensures the integrity of the trading strategy and prevents interference, allowing the manager to follow a consistent trading plan.
💸 3. Profit Sharing
Profits and losses (PnL) from the PAMM account are distributed to investors based on their contribution to the account size. This ensures fair and transparent profit-sharing.
Benefit: Investors receive returns proportionate to their investments, making the system equitable for all participants.
⚙️ 4. Execution Flexibility
The PAMM system offers flexible execution options, including auto-correction of the master’s positions during withdrawals.
Benefit: Enables smooth operation even during investor withdrawals, preserving the integrity of the master account’s trades.
🔄 5. Automated Rollovers
Deposits and withdrawals are processed automatically based on a pre-set schedule. This ensures that the system runs smoothly without requiring manual intervention.
Benefit: Eliminates manual errors and ensures timely rollover of funds, enhancing operational efficiency.
🔄 6. Uninterrupted Trading
The system operates seamlessly, with no need to close master positions during subscriptions, unsubscriptions, or deposits and withdrawals.
Benefit: Allows continuous trading, ensuring that market positions remain intact and unaffected by investor activities.
💼 7. Customizable Fees
Fees can be separately configured for each investor, providing flexibility in how charges are applied.
Benefit: Custom fee structures allow money managers to meet the unique needs of different investors, making the system more adaptable.
📅 8. Automated Subscriptions
The platform supports automatic subscription and unsubscription of investors, streamlining the process of joining or leaving the PAMM account.
Benefit: Investors can join or leave the PAMM account with minimal effort, providing a seamless experience without the need for manual intervention.
🔒 9. Privacy of Positions
Investors do not have access to view the open positions within their MetaTrader 5 (MT5) terminal. This protects the money manager’s trading strategy.
Benefit: Ensures the confidentiality of the manager’s trades, preventing potential copying or tampering with strategies by investors.
📊 10. Transparency of Performance
Investors can track their performance, current equity, and floating PnL through dedicated web interfaces, offering full visibility into their investments.
Benefit: Transparency allows investors to monitor their accounts in real-time, fostering trust and helping them make informed decisions.
📏 11. Precise PnL Distribution
Profits and losses are distributed to investment accounts with a precision of 0.01 USD/EUR/GBP, ensuring an accurate and fair distribution of earnings or losses.
Benefit: Guarantees that even the smallest changes in account value are accurately reflected, ensuring fairness in profit and loss allocation.
PAMM Account: Position Allocation and Execution FeaturesIn a PAMM (Percentage Allocation Management Module) account, the master account is composed of multiple individual investment accounts. The total equity of the master account is the sum of the individual investor equities. Below are detailed explanations of how positions are allocated, the behavior of PAMM accounts during deposits and withdrawals, and additional features for efficient management.
🔒 1. Allocation of Positions in PAMM AccountsThe master account, or PAMM account, aggregates multiple investment accounts. Only the designated money manager has the authority to execute trades on the master account, and these trades are not visible to the individual investment accounts.
How PnL is Distributed: When the money manager closes a trading position, profits and losses (PnL) are allocated to the investment accounts based on their share in the master account. Each investor receives a balance operation reflecting their proportional share.
PnL Calculation Formula:
PnL of investor = Closed PnL for master position x (Investor's Equity / Master’s Equity)
Example:
Master account total equity: 10,000 USD
Investment account #1 equity: 1,000 USD
Investment account #2 equity: 2,000 USD
Investment account #3 equity: 7,000 USD
Steps:
Master opens a BUY 1 lot EUR/USD at 1.2110.
Master closes the position at 1.2120, making a closed profit of 100 USD.
Profit Distribution:
Investor #1 receives 10 USD (1,000/10,000 x 100).
Investor #2 receives 20 USD (2,000/10,000 x 100).
Investor #3 receives 70 USD (7,000/10,000 x 100).
💰 2. Behavior of PAMM Accounts During Deposits and WithdrawalsWhen an investor deposits or withdraws funds, the shares in their investment accounts are adjusted. The changes in equity are immediately reflected in the master account, including any floating profits or losses (PnL).
Example:
Initial State: Master account = 1,000 USD, Investor #1 = 1,000 USD
Step 1: Master opens a BUY 1 lot EUR/USD at 1.2110.
Step 2: Investor #2 deposits 2,900 USD when EUR/USD is at 1.2120.
Step 3: Investor #1 receives a balance operation reflecting a floating PnL of +100 USD.
Step 4: Master closes the position at 1.2110.
Step 5: Investor #1 sees a balance operation with -27.5 USD, and Investor #2 receives -72.5 USD.
🔄 3. Additional Execution OptionsThe PAMM system includes various features to ensure smooth execution during deposits, withdrawals, and other account changes:
3.1 Autocorrection of Master Positions on Withdrawals
Autocorrection helps maintain the original leverage or margin level of the account after a withdrawal. This mechanism partially closes open positions to preserve the account’s leverage.
How Autocorrection Works: If an investor withdraws funds, autocorrection calculates the amount to be closed by applying the formula:
mathematicaКопироватьРедактироватьWithdrawal amount / Total initial investment x Total position
Example:
Initial Investment: $4,000 (Investor #1: $1,000, Investor #2: $3,000)
Master opens: 1 lot EUR/USD.
Investor #2 withdraws $2,000.
Autocorrection:
A 0.5 lot closure occurs (2,000 / 4,000 x 1 lot), adjusting the positions accordingly.
Investor #1 now holds 0.25 lots, and Investor #2 holds 0.25 lots, after the withdrawal.
Without autocorrection, Investor #1's leverage may increase because of Investor #2’s actions, resulting in potential risks.
3.2 Deposits Without Rebalancing Positions
Deposits can be made without rebalancing positions, maintaining the original positions for investors. This feature helps preserve existing trades, though it may cause disparities in leverage and margin requirements.
Example:
Total Deposit: $4,000 (Investor #1: $1,000, Investor #2: $3,000).
Investor #2 deposits an additional $4,000.
Investor #1’s position remains at 0.25 lots, and Investor #2 retains 0.75 lots.
However, Investor #1 may experience a stop-out due to a larger margin level in the master account.
Drawbacks:
This method may not always be ideal, as the positions of investors may no longer match the equity balance, leading to discrepancies in margin levels.
🔄 4. Rollover Feature
To improve predictability, the system integrates a rollover feature to handle deposits and withdrawals more efficiently. Master account managers can set a schedule for deposits and withdrawals, ensuring clarity and control over timing and amounts.
Benefits:
Predictable deposits/withdrawals.
No unexpected fluctuations, even when autocorrection is disabled.
Flexibility for money managers to schedule and control account operations.
⚖️ Conclusion
The PAMM system provides sophisticated features for managing investments, including automatic profit distribution, autocorrection of master positions, and customizable deposit/withdrawal schedules. These tools ensure efficient account management while maintaining transparency and fairness for all investors.
For more details or to get started, please consult the support section or contact our team.