Are you interested in investing in forex without trading, or you might know a little more about that and have heard of PAMM accounts and now are looking for the best PAMM accounts or best PAMM managers.
Let me say that you are probably in the best place to discover that because in this article not only do you meet the best PAMM managers and their accounts but you also learn how to choose the best PAMM accounts or managers by reading their statements and looking into their results.
Yes, you heard that right, you are going to be an expert, or at least rather expert, after this article so you’d better not skip any part of this post if you want to have a profitable investment in forex without trading.
I went through almost all the brokers that either have PAMM accounts or they claim to have PAMM and looked into the results of their PAMM managers to see which ones are worth investing in.
I didn’t need to scrutinize every PAMM manager in every broker because first, some brokers were removed in the first place because they don’t offer statistics or comprehensive statistics for their PAMM accounts.
And second, the brokers that provide the statistics that I need also have filters so that you can filter PAMM accounts and managers based on different factors.
In the end, from thousands of PAMM accounts, I needed to analyze a few of them.
We are going to talk about all those things thoroughly but first, let’s start with the definition of PAMM accounts for those of you who are not familiar with this concept.
What Is PAMM?
Percent Allocation Management Module or as we know it in forex, PAMM is a type of account where there are three parties involved; a trader or PAMM manager, an investor, and a forex broker that provides PAMM service.
The goal behind this type of account in forex is to give the opportunity to the good traders who have been in trading for a long time and know how to trade profitably but don’t have enough money so they can attract investments.
On the other hand, the people who don’t like trading but are interested in an attractive market like FOREX have the chance to be in the game through PAMM accounts and invest in Forex without trading.
Not to mention, the more people involved in trading, whether traders or investors, the more trades are made and the happier brokers become because they receive more commissions or spreads.
That might seem appealing to many people who like investing. What else better than this. I will find and choose the best PAMM managers with good track records and invest in them and become rich without even lifting a finger, Hooray!
I wish it were that easy.
I searched almost everywhere and looked into hundreds of PAMM accounts and I only found a handful of them worth mentioning and investing.
So how can you find which PAMM accounts and managers are really profitable and you can rely on them to some extent?
How Can You Choose the Best PAMM Accounts/Managers
There are lots of PAMM managers out there that claim to be profitable but in reality, most of them aren’t and to top it off, lots of them either are scam or they don’t know how to trade at the best.
So long as PAMM accounts are really attractive for investors and most of the investors don’t know much about the ins and outs of this form of investing, so-called traders or PAMM managers try to grab investor’s attention by showing absolutely profitable results with a nice rising profitable graph.
Graphs such as these ones:
Most of them are not actually profitable traders and just want to lure potential investors and others are just scam.
They don’t use any kind of stop loss and risk as much as possible, as high as their accounts and margins allow.
Investing in them just exactly like gambling. These kinds of trading are exposed to growing fast and then being razed to the ground in a blink of an eye.
They keep their positions open until either the market gets back and hits their take profits and the positions are closed in profit or the market doesn’t reverse and continues moving in the opposite direction of their trades and finally, the accounts blow up.
They might keep the accounts for a while but sooner or later the second scenario happens and the accounts will be burnt.
Martingale is one of those strategies that some of these people use to have a spiky graph and loss-free statement or results.
It’s a gambling strategy that you can use for any kind of gambling with 2 probabilities, either win or lose.
In simple words, you place a bet on something and every time you lose, you double your wager so when you finally win, your losses are covered plus you win the first bet amount.
For example, you flip a coin and bet $1 on heads. Then it lands on tails and you lose. The second time you bet twice the previous amount which is $2 and again you lose. Now you’ve lost $3. The third time you bet $4, double of the previous one ($2), and this time you win.
So not only are your previous losses, $3, covered, but you also have won your first bet, $1.
There are various versions of martingale that traders or PAMM managers can use so that they show profitable results.
The problem is your losing streak, your sequence of losing trades, can continue and your account blows up.
However, there are some kinds of martingales or semi-martingale that have some kinds of stop-loss that might make them profitable but this is not our subject here.
All in all, you should know that not every profitable graph or green statement means a good opportunity for investment and you should consider some factors before making any decisions for investment in a PAMM account or manager.
That’s why I eliminated some brokers from my study in the first place because they don’t provide the statistics of their PAMM managers.
Let’s see what factors we need to look into and what each of them means.
Obviously, this is the first metric that you should look at for choosing a PAMM account before everything else because no one invests in a losing PAMM manager or trading strategy.
This doesn’t give you any important information other than the above reason but this is the first thing you need to look at.
Account Age and Number of Trades
In order to have more reliable data, PAMM accounts should be old enough and at the same time have enough trades.
There’s not actually a unique number for the age and trades and the general one is the more the better, however, I look for the PAMM accounts with more than 6 months old and at least 300 closed trades.
Almost all brokers have a filter to set the PAMM managers according to the age of their PAMM accounts.
Drawdown is one of the factors that shows how risky a trading strategy is. It shows the decrease in your account before it gets back to the highest point it was before.
For example, you have a $100 account. Then you trade and lose $10. In this case, you’ve lost 10% of your account so your drawdown is 10%.
It happens in different steps of your trading, so every time your account suffers such a thing, it experiences a drawdown so your strategy has different drawdowns.
The largest one is called maximum drawdown.
In the above example, you trade and your account reaches $130. Then you lose $30. In this case, your account suffers around 23% drawdown, (30/130)*100= 23.07%.
The max between 10% and 23% is 23% so your MAX drawdown is 23%.
For more information about drawdown, you can check out this post.
There are some factors in a trading strategy that we can consider to determine the suitable drawdown for that but I don’t want to go into technicalities more than this so as a general rule, every strategy that has more than 30% drawdown is considered too risky.
When you set this filter on 30% for the PAMM accounts in PAMM brokers, more than 80% of PAMM managers are removed from your choice.
Now you’ve already eliminated lots of risky choices and probably saved your investment to a great extent.
Profit factor is another analytical factor that you can find in the statistics of PAMM accounts and shows the profitability of a trading strategy.
If a broker doesn’t show this factor in its statistics, you can easily calculate that by this formula:
Profit factor= Gross profit/Gross loss
Gross profit and gross loss are the parameters that you can find in the statistics of a PAMM account.
However, some brokers don’t provide those parameters so we need to look at other factors in their statistics.
Any profit factor larger than 1 shows that a strategy is profitable. It simply means the amount of your profits is bigger than the amount of your loss, so your trading strategy is profitable.
I personally prefer the PAMM managers that have a strategy with a profit factor of 1.5 or higher, the higher the less risky.
Recovery factor shows how well a trading strategy can overcome a drawdown. When I look for a PAMM account, I prefer a recovery factor larger than 1.6.
Some PAMM accounts don’t offer this parameter but you can calculate it yourself using two parameters, profit ratio, and MAX drawdown.
This is the formula of recovery factor:
The logarithm of (1 + Return to date / 100) to the base (1/(1 – Maximum drawdown / 100))
Example: a PAMM account has a profit of 150% and a MAX drawdown of 30%. Let’s put it in the above formula.
The argument of the log is:
Our profit is 150 so it becomes:
1+ (150/100) = 2.5
The base of the log is:
The maximum drawdown in our formula is 30 so it becomes:
1/ (1-(30/100)) = 1.428
So we have log 2.5 to the base of 1.428 and the answer is 2.57 — you can use a logarithmic calculator.
So the recovery factor here is 2.57 which is a very good number and makes this strategy attractive based on the recovery factor.
This is a very important parameter to look at when checking the statistics of a PAMM manager’s account.
It basically shows the floating loss or profit of an account, the profits and losses of trades that are not closed yet so they are not included in the final results such as profit percentage or drawdown.
Imagine a PAMM account starts with a $2000 investment and its statistics show a $2000 profit. That’s interesting, a 100% return.
You look at its floating or unrealized gain/loss and you see it shows -$3500 which actually comes from the trades that the PAMM manager hasn’t closed yet and they are deeply in the red.
Some brokers don’t show that but they have current drawdown instead that basically shows how deeply an account is suffering loss.
In the above example, the account has 87.5% current drawdown; in other words, the manager has lost $3500 of $4000 so far, which becomes 87.5%.
This is a PAMM account from Hotforex broker. As you can see the balance shows $8694.65 but $6469.22 of that is floating or unrealized. It means it has 74.4% current drawdown.
This is another PAMM account in Alpari broker that shows this metric as current drawdown.
Both of the above accounts are not reliable. The first one has a large current drawdown or unrealized loss and the second one has a massive MAX drawdown of 96.98%.
As you saw, there are some factors that can help us to find and choose the best PAMM managers or accounts.
Basically, I should look for a PAMM account that has more than 6 months old with at least 300 trades. It should have a drawdown of 30% at the most and a profit fact or of 1.5 at the least.
Recovery factor should be at least 1.6, however, the higher the better, and the current drawdown or unrealized loss should be under 30%, just like MAX drawdown.
When you filter PAMM managers based on those factors, you can see that from thousands of accounts, there are a few of them that check all the boxes.
Even with taking all those measurements, there’s no guarantee that the PAMM managers you choose bring you profits 100 percent because past performance is not indicative of future results.
But we can do one more thing to increase our chance of having a profitable investment in forex…
….and that is
Making a portfolio of the best PAMM managers we’ve selected
You’ve probably heard of this maxim that goes:
Don’t put all your eggs in one basket
And for increasing our chance of having a profitable investment in PAMM accounts, we should follow that motto as best as possible.
Instead of investing only in one PAMM account, we should find and choose some of the best PAMM managers, according to what we’ve talked about so far, and allocate a portion of our investment to each of them.
That way, if one PAMM account suffers loss or goes to its drawdown stage, other PAMM accounts in our portfolio can make up for that and keep our basket or portfolio still profitable.
For having a reliable portfolio, you’d better allot larger portions to the PAMM managers with a lower-risk system which basically means lower drawdown or higher recovery factor.
Let’s imagine this scenario:
Manager 1: Drawdown: 15% recovery factor: 2
Manager 2: Drawdown 22% recovery factor: 2
Manager 3: Drawdown 30% recovery factor 2.1
They all seem to have good strategies, regarding just these 2 factors, so we look at other factors and if everything else seems fine we’d better take something like the following approach.
If we want to invest $1000, it’s better to give $450 to manager 1, $350 to manager 2, and $200 to manager 1.
Best PAMM Managers
After searching all forex brokers and looking into the PAMM managers’ results and statistics, I chose these best PAMM managers and strategies from hundreds of PAMM accounts:
Note: More PAMM managers may be added to the list every now and then, so you may want to check out this post monthly.
This PAMM account is related to a PAMM manager in HotForex broker. At the time of writing this post, the account’s profit is 557.27%, the age of this account is 1107 days which means it’s more than 3 years old, and has 1116 closed trades.
The maximum drawdown of this PAMM accounts is 28.93% which is related to the first year.
Profit factor is 1.6 but there’s no recovery factor in the statistics of Hotforex PAMM accounts so I calculated that myself through the mentioned formula and it’s 5.6 which is excellent. I think everything above 3 is excellent.
The minimum investment that you can make in this PAMM account is $250.
You pay 15% of the profit to the Apollo manager which is charged monthly.
For example, you invest $1000 and the manager makes a 10% profit for the first month so your profit is $100.
You have to pay the manager $15 and the rest of that, which is $85, is yours.
The next month, the manager can’t make any profits or even the account suffers a $50 loss. In this case, you don’t pay any money to the manager but you’ve lost $50.
The trading period is 2 weeks minimum and the penalty fee is 5%. It means when you invest, you can’t withdraw your money sooner than 2 weeks unless you pay 5% as penalty.
How to Invest in Apollo
In order to invest in this PAMM manager, you need to do the following steps:
1- Open an account in HotForex broker
2- Go to PAMM manager performance page
3- Enter the account number of Apollo which is 1125685 into Account section or write Apollo in the name section and press enter
4- In the result page of Apollo, press invest under Apollo from the top right of manager offer section
2- NewStar 1970
Newstar 1970 is a PAMM account from a manager in Alpari broker and we chose that as one of our best PAMM accounts.
The account is more than 1 year old with a profit of 146.7% at the time of writing this post.
The statistics of Alpari PAMM accounts are somehow different from the previous broker, HotForex.
There are some parameters such as MAX drawdown that both brokers show in the statistics of PAMM accounts but there are other metrics that are in one but the other broker doesn’t show.
For example, Alpari doesn’t show the number of trades or profit factors, instead, they have other factors such as recovery factor or equity graph that can help us to analyze the trading strategies and PAMM accounts.
Anyway, the maximum drawdown of NewStar1970 is 21.92% and recovery factor is 3.65 so the strategy is considered low risk.
You can check out the statistics of PAMM accounts, such as NewStar 1970, from trading section
Current drawdown of this PAMM account is 1.89% at this moment that shows unrealized loss which is very small.
I checked the equity graph which is in the investment section (look at above picture) and there’s no deep decrease in equity which means there hasn’t been a large current drawdown historically.
So basically, the manager hasn’t let the losses grow widely and the trades haven’t been deep in the loss.
The minimum investment in NewStar 1970 is $50
The share of the manager’s profit is based on the amount of investment you make.
If you invest the minimum amount which is $50, the share of the manager is 40% of the profit every month he generates profits.
The share of the manager becomes smaller as you invest more money and is determined by the following structure:
- $500: 35%
- $2500: 30%
- $7000: 25%
- $30000: 20%
For example, you invest $2500. The manager trades and makes a $500 profit for the first month. You pay $150 (30%) to the manager and $350 is yours. The next month, there is no profit so you don’t pay anything.
There is no time period in Apari PAMM conditions for investors to make them keep their investment in the PAMM managers’ accounts like the one in Hotforex broker.
If you change your mind after depositing to the managers’ account, you can withdraw your money without any penalties.
How to Invest in NewStar 1970
Follow these steps:
- Go to NewStar 1970
- Press invest from the top right of the page
- If you are already an Alpari’s client, enter your login and password and continue
- If you are not an Alpari’s client, register on the page and follow the steps you’ll be given after that
Vesperium is another PAMM account that I chose which is in Alpari and is 2.5 years old with a profit of 109.4% at the time of writing this post.
The MAX drawdown is 26.39%, the current drawdown is 4.29, and the recovery factor is 2.41 at this time.
The manager of this PAMM account has mentioned on his thread in Alpari’s forum that he doesn’t risk more than 2% for each trade and the strategy is based on news and night-time trading.
The minimum investment is $50 and this PAMM manager has a constant fee of 35% of profits.
The fee is charged every month providing that the manager has generated profits.
How to Invest in Vesperium
- Go to Vesperium page
- Press Invest button from the top right on the page
- Register on the page
Any data and information are provided ‘as is’ solely for informational purposes and are not intended for trading purposes or investment advice. Past performance is not indicative of future results.
First off, the PAMM service you choose should provide you with the necessary stats for PAMM accounts. Account age, profit factors, recovery factor, drawdown, and unrealized gain loss or current drawdown are the main ones, see more
Yes, you can find PAMM accounts that you can rely on to some extent and are worth investing; however, first, there aren’t many of them and second, there’s always risk involved in investing in the market, like anything else. We need to decrease the risk by looking into PAMM stats and make a portfolio. You can find some of the good PAMM accounts here.
The logarithm of (1 + Return to date / 100) to the base (1/(1 – Maximum drawdown / 100)) See example