The result of investing in PAMM accounts directly depends on how successful the chosen PAMM strategy is. If you do not have a certain consistent plan of action when trying to make money using such an uneasy investment tool, then success depends entirely on the will of chance. Therefore, we always consider all investment options, and what is an investment? You have already read in the previous article..
When it comes to money, and sometimes rather big money, you need to arm yourself to the teeth and clearly follow the established strategy. Not only will you be able to earn income, but also whether your money will go back to your wallet. How to successfully invest in PAMM-accounts, read in this article.
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PAMM Account Selection
We have already talked about what a PAMM-account is in one of the previous articles, we hope that it interested you a lot. One of the primary and most significant stages of investing in PAMM - is the choice of the most suitable for your tactics account. Evaluating one or another manager, it is necessary to pay attention to two important indicators: risk and profitability. The optimal combination of these parameters and allow to consider the account suitable for investment.
Select an account to invest
It is very important to choose an account that would put your funds at minimal risk. And if everything is extremely clear with the profitability - it is displayed in the language of numbers and multiple graphs, then assessing the riskiness of investing is not easy. We will tell you what to look for in order to evaluate whether a PAMM account is worth your money.
To correctly assess the riskiness of an account, it is necessary to analyze the following nuances:
- The duration of the PAMM-account operation - the longer the manager works, the less likely it is that the account will be drained and funds stolen by an unscrupulous tycoon. If you are looking for a PAMM account with minimal risk, then choose the most “old” one. At the same time, you should not pay attention to managers who have been working for less than six months, and it is better to stop at those who have been operating for more than a year.
- The amount of management - the more investors have invested in the account, the higher their level of trust in the manager. And if such trust arises, then there must be good reasons for this. This is one of the few times when following the crowd, you can get personal gain.
- Indicators of maximum drawdown - there are managers who are too risky and use dangerous strategies. If you ran into this one, then the maximum drawdown level will tell about the crazy character of the trader. We advise you to choose accounts that have the lowest drawdown rate - optimally up to 35%.
- Manager's share - be sure to pay attention to how much money the trader himself invests in his account. Everything is logical here - the more money invested by the managers, the higher the level of responsibility for capital in management and well-considered steps will be.
PAMM investment strategy
Each investor can choose accounts, investment amounts, terms by personal criteria, but regardless of this, all strategies for working with PAMM can be divided into two large groups: active and passive. Each of them has its advantages and disadvantages, but nevertheless, both categories have the right to life and are actively used by investors.
The proposed strategy is more suitable for experienced investors, because it involves certain actions that require skill and the necessary knowledge, because the tactic itself carries increased risks. Below we will reveal the essence of an active investment strategy in PAMM.
- At the beginning of the week you need to make your PAMM-portfolio. Pay attention to more aggressive managers who promise more revenue.
- Do not think that, having picked up accounts, you can sit down and fold your hands to wait for a profit. You should constantly monitor the status of accounts and regularly review the indicators of drawdown. It is best to do this in 13: 00 on MSK - at this time the data is updated on PAMM monitoring.
- In the event that one of the managers has suffered a drawdown, it is necessary to withdraw the funds ahead of time and add them to the deposits that go to the plus. This will maximize profits.
What do we have by doing all of the above? The investor gets super profit. The strategy has a drawback - it is necessary to monitor the PAMM-accounts on a daily basis, so the tactic is not suitable for those who do not want to perform any actions, but simply want to receive income.
A kind of active strategy is the top-up strategy on drawdowns, which is considered to be one of the most profitable and profitable.
Drawdown strategy on drawdowns (PAMM scalping)
After each drawdown in the PAMM-trade, a period of recovery begins - this rule can be used favorably when investing. When PAMM-accounts are scalped, the investor’s task is to enter accounts for a short period, after waiting for a drawdown, and after waiting for profit, to exit the account. Having grasped the schedule of profit growth, the investor simply skips the drawdown stage and at the same time does not lose his money. Unfortunately, this strategy does not allow you to earn a lot and requires maximum activity from the investor.
1. Analyze PAMM accounts using monitoring fastpamm.com. It is necessary to pay attention to managers who, according to the results of the week, fell into a drawdown.
2. By clicking on the column marked with an arrow in the screenshot below, you can view the history.
3. You will see a window with information on the profitability of the manager for the week. In this case, we see that the account suffered a certain drawdown.
4. After analyzing the data provided and scrolling through the history in a few weeks, you can find out whether there are large rises after a subsidence for a particular manager. In our case, the manager after the minus shows good results.
5. It is important to analyze the entire history in order to form an idea that the income or loss prevails with the manager of a particular account. Most of the time, our account earns income rather than losses. Such a PAMM account is great for scalping investing.
6. Clicking on the button marked on the screen with a red arrow, you can see more extensive information regarding the selected account.
Scalping investing is a very good tactic that came to PAMM from Forex investing, and many investors use it. At the same time, it requires a certain skill and knowledge, therefore it is not recommended for beginners. This is explained by the fact that it is necessary to enter the account at the right moment, because sometimes the manager can get into a deep drawdown, and the investor, unable to assess the situation, can lose some of his money by choosing the wrong moment for the investment.
But, most often, if you approach the choice of a manager and analyze the dynamics of an account, you can make a profit in a short period of time with virtually no risk. Of course, you should not compare the profit in PAMM with the income of such an investment platform.
The optimal strategy for newbies and those who do not want to devote time to investment schemes will be a passive strategy that requires the investor to spend minimal time. Next, we describe in detail its essence.
1. Select the most appropriate accounts from the standpoint of the ratio of risk and return (We will give a specific example of working with Alpari accounts).
2. Step by step instructions about investing in PAMM, we have already painted in a separate article about Alpari broker, we only remind you that in order to select accounts it is necessary to select “Invest” in your account and “Invest in PAMM” section.
3. Here we see a rating where accounts are ordered from the best, which have regular and large profits, to the less successful ones - for our strategy it is very convenient.
4. For example, choose the manager Stability Turbo, here we can see the basic information about him. Just click on the name of the manager and see everything that interests us.
5. You can view the manager information directly in the overall ranking by clicking on a specific column.
6. Regardless of the method of studying the account, it is necessary to pay attention to such indicators as the share of the manager, the amount of the minimum entry and the profitability of the PAMM-account.
7. When evaluating profitability indicators, it is better to select accounts that offer lower income, but steadily, than those that promise much, but rarely. But it's up to you and the best option for everyone.
8. Not the last role in the selection of a PAMM-account is played by the manager's capital. We advise you to pay attention to the accounts in which the trader invests the largest possible amount (why explained above). In this case, we have a manager who himself has invested 3000 $ - this is a relatively small amount, it is advisable to select a trader with a personal contribution from 10000 $. At the same time, there is a high probability that such managers are more aggressive trading - this is an increased risk of losing money.
9. Why is it important to pay attention to the minimum amount of entry? Yes, because, like when using other investment tools with PAMM-accounts, you should not forget about the diversification of funds: it is foolish to invest the entire bank in one PAMM-account, if you can break it into several. Thus, the smaller the amount of entry into the account, the more accounts you can pick up for the money you have, and therefore minimize the risk of losing money.
10. You can select multiple accounts of one manager or similar accounts of other managers.
When accounts are selected, it remains to distribute among them the available funds in equal proportions. After that, you are not required to take any action - it is enough to go into your personal account once a month and redistribute the shares in the accounts.
As you can see, this investment strategy is quite convenient - the investor simply carefully selects the accounts and invests funds, the rest is done for him. We recall that in the field of high-yield investment there is always a considerable risk of losing money.
PAMM Account Rating
What strategy of investing in PAMM you would not choose, it is very important to choose the best accounts. Blog GQMonitor conducts its analytics and rating of the best PAMM accounts can be viewed in a separate article, which will be updated and updated every week.
Conclusion about PAMM investing
PAMM-investing is a profitable tool in the hands of an investor, which many bypass in the unwillingness to study a lot of information and delve into something incomprehensible. In fact, there is nothing difficult in investing in PAMM - you only need to learn to pay attention to important indicators such as risk and profitability, the level of drawdown and the aggressiveness of the manager. It is very important to find a middle ground, the right balance between risk and return, in which you can get as much as possible, risking minimally. When you learn how to select the PAMM-portfolio correctly, then investing in PAMM will seem to you to be extremely simple, profitable and enjoyable. Be in the black in any scenario, and do not despair if something fails right away - after all, after the subsidence, there will certainly be an increase, and your online income will certainly increase!
A professional investor with 5 years of experience with various financial instruments, maintains his blog and advises depositors. Own effective methods and information support for investments.