Investing is an enrichment tool that has recently become available to a Russian person. Therefore, it is quite natural that the state has not yet taken care of the fact that children, along with traditional knowledge, also receive skills in handling personal capital. And what can we say about those who were born and raised in the USSR?
But it's never too late to learn! Moreover, this training can bring in the future so many papery and crunchy fruits that warm the soul so much!
But investing is different! And if you do not have time to sit at charts, spending many hours on analysis, investing in PAMM accounts is suitable for you.
A PAMM account is a type of investment in which investors entrust their funds to a real professional who skillfully manages them, thereby making themselves and their clients richer.
It is necessary
- First of all, the desire to become richer! This is where the life stories of everyone you can find on the lists of Forbes and other similar publications began.
- Then you need capital: it is better to start small, and everyone determines the size of this "small" for himself. In my school years, I started with an amount of $ 10, which after a year, with the constant reinvestment of the interest received, as well as the constant contribution of new funds, allowed me to buy my first car (albeit Russian-made, albeit supported).
- Now you can start directly choosing a PAMM account.
Instructions
Step 1
At this step, there will be the simplest recommendations. It will be more difficult further, but these should be taken as the canons for choosing a PAMM account manager.
- Trading time. I prefer to be trusted by a trader with at least 1 year of account management experience. Unless I have heard about the manager personally.
- Drawdowns. By this term we mean the periods of the account's activity when there is a loss of funds. If you see drawdowns up to 90%, then you should know that a trader is prone to serious mistakes. And even if he got out of this situation - such a case can be called a miracle, not a pattern.
- The size of personal capital. Personally, I don't pay attention to this. Neither the large size nor the small size of the share of the manager's personal funds in any way indicates his professionalism. So I just keep this information in mind.
Step 2
Do not count on the past percentage of return shown in the account history.
The amount of leverage (borrowed funds allocated by a broker to a manager for trading) depends on the number and, most importantly, on the volume of transactions. That is, if at the stage of its formation the account had a leverage of 1: 200, then with an increase in the amount of the account, it can decrease to 1: 5. And this will have a very negative impact on profitability.
One of the laws of business operates here: low risk - low profit. By investing in large accounts, you reduce the risk of losing your funds, but also reduce your income from them.
Step 3
Invest on a drawdown.
No trader is immune to downturns in their performance. And if you see a long-term upward trend in the account's profitability on the chart, it is likely that there will soon be a strong (or not so) decline.
Most of them invest exactly at the peak of profitability, and withdraw on a drawdown. Be smarter, invest on drawdowns, and withdraw funds at the peak of the account's profitability.
Step 4
Avoid young and highly effective PAMM accounts.
They are called "Rockets" or "Astronauts". These are accounts, about 3-6 months old, showing very high profitability. This is not a sign of professionalism. This is a sign of a PR company account. After all, gaining high interest rates, the account falls into the top lines of the rating, thereby attracting new depositors.
Be careful with such accounts. The interest rates are tempting, but they do not carry any guarantees.
Step 5
And finally, the most important investment criterion for me is "Diversification".
As the old saying goes, don't keep all your eggs in one basket. By splitting your capital into parts, each of which you entrust to a separate manager, you insure yourself against the risk of losing everything at once.
