How to attract more clients with a PAMM account
Category : Robots
Every trader seeks new sources of additional earnings in the financial market. The search for investment-attractive assets, continuous analysis and operations can be improved through additional investment. However, how does a trader get the so much desired extra capital? That’s what we’re going to talk about today, and we’ll consider the PAMM system and how it can help a trader in their activity.
The PAMM account is a specific tool that suggests accumulating additional funds in the account in the form of investments. Simply put, the PAMM account allows the trader to obtain additional funds, and investors to get a source of passive income, which is much higher that that of bank deposits or government bonds.
How to connect to PAMM system?
A FIX API trader that has long trading statistics, as well as demonstrates positive trade results, can open a PAMM account. The essence of PAMM is that the trader who acquires additional capital, can carry out more deals, enter new markets, or reduce the risks of their trading strategy. The investor, after selecting a manager based on their system’s financial performance, acts as a “donor” for the account and receives interest according to their share in the total volume.
One PAMM account is connected to one manager and four investors. The total amount is $10,000 (4 investors put $2,000 each, and the also manager put the same amount). On the basis of the positive trade results that this account shows (stable profitability, low drawdon level, normal values of the Sharpe coefficient and mathematical expectation), another investor decides to connect to this account (with all the same $2,000). Thus, the share of each participant decreases from 20% to 16.66%, but the invested capital is increased. The profit that will be recorded at the end of the month will be divided between all account participants. For example, with a 10% monthly return, which is $1200, each participant will be able to receive 16.66% of this profit. I will note that the manager may charge a certain percentage of income from each participant which is 30% on average. That is, 30% of 16.66% of return. For example, if the return from $1,200 is $200, $60 will be retained by the FIX API trader.
If you have a trading algorithm that is already tested on the market and shows profitability, I recommend that you register it with the PAMM system.
Why is that?
As we have already seen, this will allow you to increase your managed capital and earn additional income from your own trade as a percentage of investors’ funds. But there are also several additional positive points:
- A stable long-term result ensures that the PAMM managers are promoted in the rating;
- There are image benefits. It comes out of the first paragraph. Customers and potential investors will be more loyal to such a manager;
- Cross-sales opportunity. If you have great trade results, customers will be able to trust you not only to resolve investment issues;
- The existence of a PAMM account shows the openness of the company or trader. Full access to statistics and the result of trade is an important advantage in choosing the manager. The investor must be informed in which market the trading is done (FIX API Forex or stock market). In addition to PAMM, you can bind the results of the trade account to external services and generate a flow of customers from these sources.
Of course, for the trader to be promoted successfully, the positive trade dynamics and the openness of the result are needed. However, compliance with these conditions, through the PAMM system, will increase the current profitability and attract new clients to your trading.