The global economy is gradually recovering from the latest economic crisis seen in 2008-2009. Consumption and savings keep growing. At the same time, more and more people, who used to be financially conservative or ignorant, start considering financial markets as sources of extra income.
Therefore, people are more willing to invest. However, few of them want to become active traders or investors. Most of them do not want to go deep into the art and science of trading and investing. They are interested in preserving their savings and multiplying them. So, they need reliable sources that could generate more substantial income than bank deposits. This stimulates the development of trusted management.
Indeed, what can be better than finding professional traders or investors and trusting them with your money so that they could generate stable profits for you? However, it is not that simple. There are some weak links in the chain. Firstly, it is about the trader/investor’s level of professionalism and his/her ability to preserve and multiply the entrusted capital. Secondly, it is about the conditions (the risk/reward ratio etc.) and your ability to exercise indirect control over your capital.
In this aspect, PAMM services have revolutionized the industry. They imply transparency as investors can see all the manipulations with their funds and can react to undesirable changes in proper time. They also allow investors to see their managers’ weak and strong points. With PAMM services, you can watch and analyze a certain manager’s approach and techniques prior to trusting him/her with your money.
ForexTrend is one of the leading brokers offering PAMM services. It has managed to accumulate a $2.000.000 PAMM account.
However, everything changes. Markets are no exception. That is why a certain PAMM manager cannot guarantee you stable profits over a long period of time. This month he/she may show outstanding performance while next month losses may occur. No investor likes it when his/her investment capital goes volatile. A bird in the hand is worth two in the bush!
However, there is solution to the problem! Not so long ago ForexTrend introduced its index of PAMM accounts.
In essence, this index resembles any stock index. It is composed of several PAMM accounts managed by several traders with different trading strategies. There is almost 0% chance of all traders losing over a certain time period. On the other hand, their trading performance will be averaged and will look smoother. The index doesn’t offer super profitability. However, the risks are minimal.
Let’s have a look at the example given below. It will show us the advantages the PAMM index can boast. Let’s say, the given index is composed of 3 PAMM accounts. Each of them represent 1/3rd of the index. The initial balance of each account is $10.000. Now look at the chart below and compare the performance of the individual traders and the index.
As you can see, some traders may show more aggressive trading style than others. Even with a glance at the average result, some investors may still see it as a risky investment. That is why, in order to cater to all investors’ needs (with different risk/reward requirements), ForexTrend introduced a series of PAMM indexes. For example, for those investors who do not want the yield curve to be volatile, the broker offers the “Premium Conservative” index. All the traders participating in it are subject to strict trading requirements. For riskier investors, we can recommend PAMM 2.0 with the 50/50 risk/reward ratio and the 50% drawdown limit.
However, ForexTrend chooses only the best traders to manage its PAMM accounts. That is why there is almost a zero chance of a 50% loss even with rather aggressive trading styles.
Another major advantage is that PAMM indexes are easy to trade. All you need is to go to ForexTrend’s official website, download Meta Trader 4, deposit funds and buy one (or some) of the indexes you like. Obviously, you cannot short (sell) a PAMM index.
The quotes of a certain index will be based on the trading results of every single PAMM account that forms the index. It means that the index will go negative only if all the PAMM accounts it consists of will show losses. However, the probability is very low.
And finally, you can demo-trade any PAMM index to test it before investing real money.
Trading and investing environments evolve, traders and investors evolve with them. Amid tough competition, brokers value their image as never before. So, maybe it is time to try to make your savings work for you?
