Ekaterina NutriakovaForex MAM or multi-account manager is a passive investment solution that lets a professional trader — or “money manager” — manage the funds of the other traders, who are called “investors”.
Why “passive investment solution”? That is because it allows newbie traders and those who don’t want to spend their time on trading to entrust their funds to professional traders verified by a broker and do nothing else.
Instead of logging in to each investor’s account individually, the manager trades from a single master account linked to the brokerage’s MAM system. When he places a trade, its profits and losses are automatically allocated across all the client accounts he manages on a proportional basis.
By harnessing the roughly US $7.5 trillion that changes hands in the foreign-exchange market each day, a MAM platform pairs institutional-grade allocation algorithms with retail accessibility, making professional oversight both transparent and scalable. In short, it turns one proven strategy into many fully segregated portfolios, cutting operational overhead for the manager and offering hands-off market exposure for investors.
How Does MAM Forex Work?
Forex MAM accounts make use of combining individual trader accounts into a large pool of managed funds. The algorithm is as follows:
- Broker selects a money manager among his traders.
- Broker assigns investors to a money manager, and they allocate their funds to the money manager’s account.
- The money manager trades using the funds in his account.
- Profits and losses are automatically divided among investors based on their shares in the money manager’s account.
- Investors are able to deposit and withdraw money from their sub-accounts.
Takeprofit EasyMAM
- Simultaneously distributes trades on 20,000 investors
- Provides hide-open-trades option
- Keeps accounts inside MetaTrader. That means that they can be reviewed by regulators; money managers can use all of their tools like EAs.
- Shows the correct profit even for a trading volume of 0.000001.
- Has interfaces for investors and money managers that are integrated into broker’s website or CRM.
Advantages of MAM Forex for Brokers
Money managers mean guaranteed trading volumes for brokers. How exactly does it all work?
More transactions
First of all, money managers have a bolder approach than traders. In a pooled account, the money manager will make more transactions with the client’s money and, probably, larger-scale transactions than the client himself would have made. It’s because the money manager is a professional with the time and a strategy. More transactions mean:
- additional commissions from traders’ money. For instance, a broker may charge a commission on the money invested, or simply interest per year.
- bigger commissions due to a greater number of transactions.
More active traders
Secondly, a money manager offers a chance to attract money from people who would not dare to trade on their own.
Imagine the following situation: a trader opens an account with a broker and deposits $200. Then he starts thinking that it would be better to take a training course and read a book on trading first, soberly realizing that he knows nothing about trading and may easily lose.
That’s where MAM comes in handy: it helps mobilize these people by offering them a chance to entrust their funds to someone experienced.
Advantages of MAM Forex for Investors
The benefits for a trader who uses MAM is that his money is managed by a more experienced trader. As a rule, the manager has one or several tried and tested strategies, is well-versed in trends, and is capable of sensing the slightest market fluctuations.
Therefore, a trader who is not skillful enough yet or does not want to trade can minimize his losses.
Advantages of MAM Forex for Money Managers
A manager works either for a percentage of successful transactions, or for any combination of salary and a percentage. Meanwhile, he risks the investor’s money, rather than his own.
With a certain amount of luck and perseverance even a novice trader can become a manager. This will give him the opportunity to establish his own capital from scratch using only his clients’ money.