Financial investments have many different variations. One of the most popular is PAMM accounts or trust management of accounts. Brokers and traders offering such services in the modern market are very many. Let’s try to figure out how not to miscalculate with the choice of the trader, at what points need special attention.
Choosing A Manager For The Account – 5 points to pay attention to
Of course, I want to trust my money with the best manager who can make the most of your funds. To begin with, consider the basic principles to guide you in selecting a trader for your account:
Statistics for all trader transactions should be as open as possible. If a broker and trader work in the financial market honestly, they just have nothing to hide. If such statistics cannot be obtained, this trader should not be trusted.
The deposit load must be specified. At conservative trade it is about 15-30%, at aggressive 60-90%. It is necessary to clearly compare possible income and risks.
Yield of PAMM account. One of the main indicators, you can track it quite simply – the percentage of successful closed trades.
Trade drawdown. Each trader has a moment of decline: failed deals go one after the other.
Drawdown in trade. Every trader has a moment of drawdown: unsuccessful trades go one after another. The drawdown period should not be long, and as a percentage it should not exceed 10-20%.
Try to talk to the trader before opening your account. Make sure he is competent and ask difficult questions. For example, what he will do in case of long-term settlement, what measures he has been prepared. A real professional always has a plan of action, and often not alone, in case of various unpleasant situations. At the end of the day, you just have to be comfortable communicating with your manager. These are the most important points worth paying attention to.
Key Risks in Trader Selection
Now let ‘s take a look at the main risks that can be faced in choosing a manager:
Drawn statistics. There is a small chance that the broker is in collusion with the trader and statistics are “drawn” to attract customers and further withdraw funds from the account. The risk goes down if you only work with proven brokers who cherish their name.
No drawdown by the trader. If the account for more than six months, and still no drawdown, this should serve as a signal not to work with the trader. In general, aggressive strategies are used to achieve this result. And at one point, things could suddenly end in account bankruptcy.
These are two “technical” risks that can be faced when choosing a trader. Be sure to pay your attention to this.
Choosing a manager for your account is a very responsible matter and needs to be approached as seriously as possible. In conclusion, it is worth giving a little advice on the choice of trader. If stable earnings are more interesting for a long time, it is worth choosing an old account, which is not one year old, thus it is possible to minimize all trade risks.