PAMM investment is a great way to get a passive income. You don’t need to spend much of your time trying to figure out all the subtleties of the functioning of financial markets. You can trust your capital to the skilled trader with all guarantees and pay only the profit percentage.

What is PAMM?

We will start with the definition of what a PAMM is. PAMM, or Percentage allocation management module, is a way for investors to manage the capital for its growth. The PAMM account is the account trusted by experienced traders, by investors to raise money on the financial markets for a certain fee.

It is essential to know that the PAMM account is the investor's property, which means that the trader who manages the account can’t withdraw money without the investors' agreement. Also, this system works by proportionately copying all trading operations of manager accounts on the investors.

Another thing that can help make the PAMM investment less risky is the PAMM portfolio. It is several PAMM accounts being used by one investor.

You can read it in more detail here.

Advantages and disadvantages of PAMM:

Let’s begin with the advantages of using PAMM for the investor:

  • The guarantee of thoughtful and rational trading by the trader. Because traders copy all trading operations on its account, traders risk their own capital too;
  • Security guarantee that doesn't let the manager withdraw money from the investor's account; this helps to avoid fraud;
  • The opportunity to deposit the money or remove it from the account every moment the investor wants;
  • The opportunity for diversification by dividing the capital into different PAMM accounts with other managers;
  • Trade transparency on the PAMM, the ability to track the history of transactions.

Disadvantages of using the PAMM for investors:

  • There are special state regulations required for investors to use the PAMM in lots of countries;
  • Without proper fulfilment of state requirements, investors may not be protected from fraud or non-performance by a manager or broker;
  • PAMM is still risky. Losses and extra costs are caused by wrong trading decisions and failed deals.

How to be profitable with PAMM in Nigeria

First, use reliable brokers with licenses who can legally provide the opportunity for PAMM investing. The responsibilities of brokers include providing the platform to connect the trader and the investor. Maintain the safe and legal functioning of this platform. Provide the opportunity to deposit the account and withdraw the money in various ways. The opportunity for clients to give feedback, receive customer support, etc.
Here you can find the list of PAMM Brokers allowed to trade in Nigeria.

The second step is not to put all the eggs in one basket. Use the PAMM portfolio. I will help to diversify all risks and to differentiate the returns.

You can compensate for losses on one account with income on the second.

That’s all the essential information you need to know about PAMM.