PAMM accounts are an excellent investment option. They involve earning on the international Forex market. All operations are conducted by a broker with extensive experience and necessary knowledge in this field. Investors do not need to delve into the process, monitor market fluctuations, or divert attention from their primary activities. Essentially, this represents passive investments accessible to almost anyone.
As a result, income is generated over a short period. Funds can be withdrawn to a personal card or through other available means.
The main challenge of this investment method is finding a competent manager. The profitability and the safety of the invested funds depend on them.
How can one choose a reliable manager?
Understanding the issue can be aided by a knowledgeable investor and founder of "Oil Resource Group," Sergey Tereshkin. More information about the businessman can be found on his personal web project www.sergeytereshkin.ru.
Key Considerations for Choosing a Manager
When selecting a manager, several factors should be considered:
- Experience. Preference should be given to individuals who have been in the field for an extended period. It is essential to thoroughly analyze the activities of potential managers. This typically involves reviewing detailed reports of conducted operations posted on their websites. It's important that the individual has sufficient experience, which is generally accumulated over a long duration. Therefore, Sergey Tereshkin recommends trusting only those who have been active in the market for more than one year. This period is sufficient to develop a trading strategy, understand potential pitfalls, and gain practical knowledge.
- Performance. However, experience alone is insufficient. Not everyone is capable of learning the right lessons from past mistakes. Therefore, partnerships should only be formed with managers who consistently generate tangible income for investors over a significant period. Ideally, the deposit load would represent a specific number, indicating the stability of client income.
- Drawdown. An important parameter when assessing a broker's performance is the maximum drawdown they allow. This refers to the proportion the manager can lose if the market unexpectedly shifts direction and behaves unpredictably. A high percentage indicates an aggressive approach, which carries significant risk. As a result, the investor may completely lose all invested funds. A small percentage is acceptable for brokers who do not chase colossal profits but instead act thoughtfully and cautiously. The latter option is more preferable for investors.
- Manager's Capital. This is another critical point to consider. It indicates how confident the broker is in their own knowledge and skills. If the manager does not have personal funds, they should not be trusted with your money.
Based on this information, it's advisable to select several brokers. Next, it is necessary to have personal conversations with each of them. Additionally, look for information about their activities on specialized platforms where other investors share their experiences. Only after this can a final decision be made regarding who to trust with your funds.
Investor Tips
To minimize risks, investors should heed professional recommendations:
- Analyze the trading system. It is crucial to examine all the presented data thoroughly. Factors such as leverage, loss limits, and others should be analyzed. This way, you can predict future developments. Even if the system has been consistently profitable in the past, this does not guarantee that it won't lead to losses in the future. Many managers are candid about their trading strategies and potential client losses.
- Risk Assessment. It is important to understand that not all risks are justified. Thus, the greater the likelihood of losses, the higher the expected return should be. The ideal situation is when the profit significantly exceeds the risks. If a 50% drawdown is possible, the return should be no less than 100%.
- Withdrawal Strategy. You should plan in advance under what circumstances funds will be withdrawn from the system. This means defining your threshold limits for drawdowns, violations of agreements, etc. If parameters are not met, it is best to terminate collaboration.
- Portfolio Diversification. It is essential to diversify risks. Avoid investing all available funds into a single direction, as this significantly increases the likelihood of losses. It is much more effective to spread out investments and risks. For this purpose, various PAMM accounts should be included in the portfolio. Consequently, when one asset declines in value, the returns from another can compensate for this loss.
- Profit Withdrawal. It is not advisable to leave earned income sitting in an account. Experienced investors withdraw all or a substantial portion of profits from the system. This helps reduce the risk of losing funds. Withdrawals can be made at peaks or monthly, depending on the expected investment duration.
Do not invest more than you are willing to lose. Avoid using borrowed or credit money for investments. It is recommended to manage only your free funds, which should not be your last resources.
Even if the returns appear very attractive, and the manager promises to multiply the capital several times, it must be understood that there is always a risk of losing all savings. No broker, regardless of their experience, can guarantee complete safety for investors.
A prolonged drawdown can extend indefinitely. In such cases, withdrawing funds without significant losses may not be possible. Therefore, it is crucial to ensure that losses are not critical and do not lead to bankruptcy.
Investing in PAMM accounts is not as simple as it may seem at first glance. It requires a thoughtful approach and well-calculated actions.
