Ekaterina Nutriakova
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How to engage inexperienced traders in trading? One of the tools can be a fiduciary trading provided by MT5 MAM solution.
The MT5 MAM is an investment tool for Metatrader 5 trading platform which allows new traders to channel their assets to a more skilled trader to trade on their behalf.
MT5 MAM accounts are based on pooling individual traders’ accounts into one common pool. The more skilled trader takes on the role of a money manager. Traders who trust him with their money are depositors. Investment managers can take control of the assets of several depositors simultaneously. The money manager usually receives a percentage from profitable deals.
With PAMM (Percentage Allocation Management Module) and CopyTrader, MT5 MAM is one of the three solid investment instruments that can be integrated with the Metatrader 5 platform and a CRM or a website of a broker.
This tool is primarily intended for brokers who are interested in attracting new traders and growing trading volumes.
Takeprofit MT5 MAM Example
Let’s have a closer look at Takeprofit MT5 MAM — the Easy Multi Account Manager. It is a mix of PAMM and MAM approaches. This investment tool implies an individual account for each depositor in the pooled fund, which is controlled by a money manager. The investor has access to account transactions, he can track the balance, open and closed transactions, profits, etc. But he can not perform any operations.
In this manner the assets are distributed from the manager’s general pool to additional depositor accounts. This happens automatically and in accordance with their investment amount. The manager trades only on a large account (as in PAMM), but this account is split into several hundred or even thousands of individual subaccounts (as in MAM).
This type of money management can be beneficial to traders, brokers and investment managers.
Advantages of Using MT5 MAM
For investors
Investors’ deposits are operated by a more skilled trader with a well-established strategy. Usually it is a person who is well-versed in trends and easily senses the slightest market fluctuations.
For investment managers
The manager provides his services for a percentage of successful deals or a rate with a percentage. This way, he does not risk his own funds, but only the investor’s assets. Some beginner traders can become money managers. This is a good start for building up your own capital without investment.
For brokers
Forex brokers are encouraged to use various forms of passive and active investment management. This is a good option to engage customers. And the bigger the audience — the larger the trading volume.
What causes an increase in trading volume?
Newcomers to trading tend to risk smaller sums of money and trade rarely. Learning useful strategies takes time. Money managers do not risk anything because they invest other people’s money. This is one of the reasons why they trade more frequently, and thus take risks. One manager trades the assets of several depositors at once, which allows to bet a greater amount. The advantage for the broker is that depositors prefer to trust expert players. They allocate large amounts that they themselves are not ready to risk. This allows the broker to make more money.
