PAMM vs Signals

As i understand it........
PAMM offers automation and set of rules and sometimes leaderboard. But control of account is with MM - and you need to open an account with a specific broker.

Signals offers service with no need for prof licence because the owners of the money are doing the trades. Its quick easy private.

Can a MM get 20% performance +2% service fee when selling signals?
How can signalor/provider control size the signalee is trading?

If you are a MM ought you really only be interested in PAMM?
What is it about being a signal provider that people find attractive?

PAMM is nothing more then the technical method by which trading takes place. There is LAMM as well.

PAMM = Percent Allocation Management Module and LAMM is Lot Allocation Management Module.

None of the above has anything to do with the quality of the trading, MM or anything else. PAMM means is, that if a manager has a total of 100k and you have 1k of that 100k with him... and he does a 200k trade, your portion of the risk is 2,000

In the case of a LAMM, if the same accounts were in place, the manager does not do a dollar trade, but lots. So if he does a 100 micro lot trade, your portion is 1,000.

It just makes it easier or shall we say possible for one click to effect many accounts and to have each account have the same fill price.

Hi myfxbooker,

PAMM investors has limited control of the trading activities. PAMM investors open a trading account with a specific broker(must be the same broker with the PAMM trader.) PAMM investors will deposit fund into the his own trading account then through PAMM system, investor will contribute fund into PAMM trader account. Money from all PAMM investors will be gathered there and control by the PAMM trader(all trading decision controlled by PAMM trader). PAMM investors only can control the withdrawal and deposit of his money.

Forex signal, investor open trading account with any brokers, signal provider will gives investor trade copier to be installed into investor's trading platform so trading activities will be completely automatic, whatever trading activities happened in signal provider trading account the same trading activities will be reflected in investor trading account. Fund remains in investor trading account with full ownership.

To answer your questions,
1. Can a MM get 20% performance +2% service fee when selling signals?
Since you are saying MM, so i assume you are talking about the PAMM. This is depend on the PAMM system. Normally all PAMM system can set performance fee, but not all PAMM system can set service fee. So it is fully depend on the broker who offer the PAMM system.

2.How can signalor/provider control size the signalee is trading?
This is depend on the trade copier system. Most trade copier system can control the lotsize based on account balance, lot multiplier and fix lotsize. These are settings and controlled by the signal subscriber.

For account balance, meaning the trade copier system will compare the account balance between signal provider and investor account then calculate the ratio and executive the correct lotsize into investor trading account. For example, signal provider account enter a 0.01lotsize of trade with account balance $1000. If the investor account has $5000 then the trade copier will calculate the ratio then open 0.05lotsize trade into investor account.

For lot multiplier, investor side trade copier can set a fix number which is called lot multiplier. Let say the lot multiplier has been set to 5. When the signal provider trading account enter a 0.01lotsize of trade, the investor account will enter 0.05lotsize of trade. That is 5 times of the lotsize from the signal provider account.

For fix lotsize. The investor can set the fix lotsize. Then no matter what lotsize of trade opened at the signal provider account, on the investor account will open the fixed lotsize of trade(as set in the fix lotsize variable).

For which method to use, it is based on your trading strategy and investor preference. Not all trading strategy suitable for the 3 types of lotsize controlling methods.


3.If you are a MM ought you really only be interested in PAMM?
It is depend too. For PAMM, as a trader, you make money when you perform good because you make money from profit sharing base. For signal provider, as trader you make money by charging monthly fix fee(normally this is the model).

4. What is it about being a signal provider that people find attractive?
No matter signal provider or PAMM trader, you need to have a reliable trading record. Pricing, good service and etc come secondary. This is my personal point of view.


From my personal experience:
As PAMM investor, your disadvantage is, let say your trader account is having some big equity DD, if some of the PAMM investors decided to withdraw their money at that point of time, this action will cause the trading account immediately goes into margin call. So you will be affected by other PAMM investors. Remember, PAMM trader cannot control the withdrawal of the fund by PAMM investor and most of the time PAMM investor will not inform the PAMM trader when they want to make withdrawal. So if 1 or 2 big investors withdraw at the same time during high equity DD, this definitely will affect other investors.

Actually there is another serious disadvantage for PAMM investor but I cannot mention here! So I skip it.

As a PAMM trader, your disadvantage is your trading indirectly controlled by your investors. Example, at first your PAMM account having $5000 balance, so you plan your money management on your trade based on $5000 balance. After you enter the trade, some investors make withdrawal, your money management is no longer accurate and applicable on the new account balance. This will further affect your trading result. In this case the bad trading result is not actually because of your bad trading skill but is because of your investors.

For signal subscriber, your disadvantages are:
1. The signal provider may disconnect you in the middle during floating trades. Imagine you are having 5 losing trades and suddenly your trading account lost connection with the signal provider trading account, at that point of time you are on your own!!! The losing connection can be many possibilities including technical problem or the signal provider close business or signal provider just disconnected you and etc.

2. Missed communicate on the money management between the signal provider and the signal subscriber. This often happen in signal industry. As a signal subscriber, you want to duplicate the trading result of the signal provider trading account. So you must not only copy all trading activities but you must also copy the money management rules in order to duplicate the trading result. You need to apply the exactly same money management rules as in the signal provider's trading account.

3. Sometime subscriber follow the money management rule but the signal provider does not follow the rule. For example, according to the signal provider, you need $1000 to trade 0.01lot. You as signal subscriber you take it serious and you follow it closely. However the signal provider may not following the rule, in the signal provider trading account he is using $600 to trade 0.01lot (let say). If let say signal provider's trading account get into margin call. Many people think that it is fine, I am following the rule, I am using $1000 for 0.01lot, because of this my trading account is safe and can avoid the margin call. But in reality, you are copying the trades and of course you are copying all the trading activities including open, close and modify trades. Once the signal provider account get into margin called, all trades are forced to close, and your trading account will close all the trades too exactly same as the signal provider account. You will lost a big sum of money although you are following the money management rules as suggested by the signal provider.

For signal provider, you basically has no special disadvantage. If somebody think of disadvantages please let me know. Thanks in advance.


Above explanation is my personal view, no matter you as a reader is in which roles, I am not specifically on you. Thank you for reading.

Regards,
SIM 😄
www.instantforexsignal.com

Signal provider can't control the size of the lot for the slave client.

Basically, the balance of the account will not known by the signal provider. So, the slave client have to adjust it accordingly of the lot size.

Same for PAMM, you cant see the investor money. You just trade in your account like normal. If you win, both win, if you loss, both loss.

Applies the same to signal provider too. 😎

If I am not mistaken, PAMM trader will know how much each PAMM investor has been invested into the PAMM account. PAMM trader trade directly on the PAMM account.

There is another type called MAM, this is the type where the money manager cannot see the account balance.

Hope I am not misleading... maybe some PAMM or MAM traders can share and confirm.

Thanks,
SIM

On to part 2, Forex is a mixed bag of folks. Many are trying to have $50 become a million. Develop a system that even comes close to looking like that... and the serious money won't typically even look at you. Tone it down and get started with deep pocket capital and you need the staying power to remain in business. So many smaller (100's of million under management) are and have closed up, because they could not make it. Compliance, management and legal is HUGE.

So, I think the idea here is... I will give you something that theoretically works and you have at it. Pay me next to nothing and with a whole lot of people doing that, I can make a living. Chances are that most won't or can't get the performance of the signals, but they will try and try and try.

It can be done, but based on my life experiences, it won't happen using MT4 with market orders and the lag.

Actually I am thinking about launching from within here and doing what it takes to make the user successful. Be one hell of a lot of work. I dunno if it would be worth the headache.

I have had a PAMM account as a manager and I had a different experience. It is broker dependance. First, I knew the account balance of each clients PAMM account. It maybe they had another account, but I had the balance on the PAMM.

If a client wanted out or to add, it took place daily at rollover. From this point operating with two different brokers, I had two different expereinces. One broker did a reallocation of the trade size, based on the new number of clients. The other broker reduced the size of the trade to try and keep the % close. Still made it really tough and for me I preferred LAMM. If someone left, they blew out the positions for that person. If someone was added, it was just cash. No idea if LAMM is used anymore.

pip2cash posted:
If I am not mistaken, PAMM trader will know how much each PAMM investor has been invested into the PAMM account. PAMM trader trade directly on the PAMM account.

There is another type called MAM, this is the type where the money manager cannot see the account balance.

Hope I am not misleading... maybe some PAMM or MAM traders can share and confirm.

Thanks,
SIM

Yes you are right, pamm Manger sees and know how much each investor invested, true talk

Sorry peeps. Always got mixed up. 😳

Yes thanks for replies. The issue is worth discussing.

There is servers side PAMM - where master PAMM account has linked investor accounts - and all funds are visible and rules are on the server and broker controls flow of money.
i.e. I'm not sure i would go with Instaforex serverside PAMM but they seemed to start doing this first I think.
(The server plugins are called umam or imam i think)

There is MoneyManagers desktop PAMM where MAM software (Boston Tech clone) will also connect to an EA.
Again his clients details are seen.

And of course there are signals providers.

It seems to me that reg bodies require you are licenced.

I think they cant stop signal providers because the trades are done on the investors PC and it is all too hard to cease.

The MM desktop administered PAMM is probably something that reg bodies will (and do) crack down on.

As for server side PAMM - well i cant see how - given enough time - they will escape the need to be held by 'licenced professionals'.
Unless the rules on the server are such that it is seem to scrape through as not being commodity pooling.

Realistically there is a need where flow and payment of money is made easy, so the broker needs to be involved - but rather than trade the clients account - perhaps the signal ought to be sent to the investors PC instead.
If the trade takes place the MM will see immediately who is in and who is out.
Sending signals may be the key to avoiding reg bodies - but allowing a MM to get 20% performance fee.
Tight vs loose controlling withdraws might make a difference with reg bodies.
The level of the MM funds in the account might make a difference reg bodies.

Will server side PAMM accounts continue as they are?
(And how do you stop clients withdrawing money in the middle of a trade?)

On the other hand those that get licenced will want to stamp out unlicenced PAMM. And that may be best for everybody.





 

Issue is - for PAMM normally the investor can see but not trade.
The account is locked.
If attempting a mix of PAMM + signals - you need to allow client side trades but only by the 'signal'. So need a time sensitive key sent.

As it is better to do all on server - maybe what is needed is to ensure Risk levels are set for slave PAMM accounts
 re: max exposure etc.

Maybe signals component is overkill. Maybe also allow them to trade freely - as performance is on the signal performance.

https://www.myfxbook.com/members/onecat/onecat/544235

Get involved with my new project.my pamm:https://www.myfxbook.com/members/m_m11111/pm-111729/664449
1day1order +gridsystem.Statistics in the past:gridsystem 20% / month.sorry,i can't show,because it's easy to find the formular.
If you worry for your capital, take a look at it for fun, because I will not answer your questions.
best regards.

You can take a look the result of my PAMM Account here https://www.myfxbook.com/members/gustivalas/gustivalas-pamm/668503
If you are interested in joining to my PAMM Account you can register your account here https://www.instaforex.com/id/pamm_monitoring.php?trader=1256708

i like you all brother😄.....

BTW the big drawback for a signal provider (you said they didnt have any disadvantages, but I believe this is the major one) is the security of the signals. In MT4, any signal provider can just receive and re-broadcast any other mt4 signal vendor signals. There is NO reliable security measure to prevent rebroadcasting and copying, possibly by a lower-cost republisher. Its a real problem.

If a security system could be implemented ( I like the idea of time-sensitive keys locked to executables residing on only 'registered' cleints) , then signal providers would be a worthwhile thing perhaps, but with the rampant piracy, I wouldnt do it. PAMM/MAM/LAM are the only way to defeat that from a provider point of view.

Hi,

Illegally resell the signal from the original signal provider is a copyrighting issue. There is no effective way to prevent this.

Thanks for sharing.

Regards,
SIM

in this case I vote for PAMM. But it is still risky.

Actually i agree, that pamm account is better. You not supposed to invest all your money in it. Just keep some for personal trading. But if really invest in good pamm acc, it might become one of the best forex decisions you've made.