Helena Izotova
Market Leader continues closely looking at a new system of accounts, PAMM 2.0 - a unique product of Forex Trend. What is the reason for such intense interest?
PAMM 2.0 was designed as a logical continuation of PAMM accounts. The design process was mainly focused on ensuring security of investor funds. It is an open secret that sometimes an excessively enthusiastic managing trader flew into a passion only to lose all investor's money and was, in the meantime, not liable at all. If we add that the investor-manager link is rather virtual in nature as a result of development of internet technologies and money is absolutely real, it becomes clear why potential investors are very circumspect and unwilling to trust their funds to a trader they don't know at all. The risk is too high.
The situation becomes paradoxical: there are quite a few potential investors with free funds. However, few of them are prepared to give them for management anyone and anyhow. PAMM 2.0 from Forex Trend is intended to mitigate investment risks and, in this way, attract more investors and help more professional traders find a job.
In general, benefits of PAMM 2.0 accounts are too obvious for everyone so that even people that have nothing to do with markets got interested in this system. In particular, Gosha Kutsenko, an extremely popular Russian actor, considers where to invest his money so it can generate returns. So, even though the man of such importance has many more opportunities for adequate investments than ordinary people, he opted for a PAMM 2.0 account with Forex Trend and describes his choice in this video.
So, we are more or less clear about why a PAMM 2.0 account is helpful for the investor. What about managers? What are special features of operating PAMM 2.0 accounts? We asked this and other questions to one of the most successful managers that made it to Forex Trend Top-5, Veronica Tarasova.
ML. Did you have a previous experience with investor accounts?
VT. Yes, I did. My first account in which I got the Ukrainian Financial Olympus prize was an investment account.
ML. Is it simpler or more difficult to operate a PAMM 2.0 account? Why?
VT. Trading in a PAMM 2.0 system makes the trader's life easier. Like in the PAMM system, there is no risk of the investor's default against the trader, and the investor feels more relaxed in an awareness that the trader risks his or her own capital on a par with the investor's. PAMM 2.0 offers no additional difficulties to the trader who is responsible about the investor's capital rather than gambles with it trying to win profits without risking anything.
ML. Is there a psychological ceiling of a PAMM account size above which you wouldn't simply risk trading with invested money?
VT. If the person can manage an account of 100,000, they can manage a million, too. I don't know about other people, but I have no psychological barriers about the managed amount.
ML. Please describe strengths and weaknesses of trading through a PAMM account as compared to managing your own funds.
VT. Strengths - of course, additional working capital, weaknesses - psychological responses of certain investors.
ML. Doesn't investors' control prevent you from performing well?
VT. Hard to say for sure. On the one hand, this control motivates and keeps me in good shape. On the other, it sometimes stands in the way because if the person doesn't know much about trading they don't always respond to a situation adequately.
ML. Forex Trend's website regularly updates its managers' rating. Does this rating affect how you trade? Aren't you driven by sporting blood to be 'higher, stronger, faster'?
VT. No, it doesn't. I understood when working in a casino that gambling cannot have a good outcome. By nature, I am not a gambler. I think it is investors that require this rating more - to make decisions. I am influenced by my internal motivation and goals that I set for myself. My priorities include stability and returns. And I mean this order. But when I had an account and a task from the investor to make as much as possible at any cost (in 2010) the yield was just fantastic.
ML. Thank you, Veronica, for exhaustive answers. I think now potential investors will be more willing to offer their funds for management to traders that use the PAMM 2.0 system from Forex Trend.
Helena Izotova
