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Huzefa Hamid
Forex as an asset class attracts a surprisingly large amount of investment, a lot of it retail. For managers who are looking to manage a portfolio of client investments with Forex brokers, MAM accounts can be an excellent solution. If you lack the time or expertise to trade profitable, having your account managed through a MAM account could be a profitable solution.
Whether you’re an account manager or client looking for this service, we’ve created a shortlist for you of the best Forex / CFD brokers offering a MAM account service. Read on to view our shortlist and to learn more about MAM accounts and how to choose the best MAM account broker.
The ratings shown on DailyForex.com are determined by hours of research from our editorial team into over 10 factors, including account fees, deposit/withdrawal options, regulatory status, tradable assets, and more.
The ratings shown on DailyForex.com are determined by hours of research from our editorial team into over 10 factors, including account fees, deposit/withdrawal options, regulatory status, tradable assets, and more.
The ratings shown on DailyForex.com are determined by hours of research from our editorial team into over 10 factors, including account fees, deposit/withdrawal options, regulatory status, tradable assets, and more.
FP Markets offers MAM traders ECN trading at a low cost. Forex spreads commence from 0 pips for a commission of $6.00 per 1 standard lot, with the average for the EUR/USD and the USD/JPY at 0.1 pips or total trading fees of $7.00. International traders get maximum leverage of 1:500 with order execution of 40 milliseconds. FM Markets creates competitive trading conditions for scalpers and high-frequency traders, two of the trading strategies most used by MAM managers.
The minimum deposit is $100, making FP Markets MAM accounts very accessible. Another benefit, for algorithmic traders, is that FP Markets has no restrictions on EAs, allowing algorithmic trading across all MAM accounts. The order execution at FP Markets limits slippage, ensuring MAM portfolio managers get the prices they entered, improving cost control, and potentially enhancing profitability.
Pros
Choice of trading platforms and auxiliary trading tools
Very competitive cost structure and excellent asset selection
Low minimum deposit requirement and leverage of up to 1:500
Best all-around broker with high floating leverage and fast execution
FXTM is another very competitive choice for traders looking for a Forex broker supporting a MAM account. FXTM’s MT4 Advantage Account offers one of the lowest trading costs industry-wide, ranging between $0.80 and $4.00 per 1 standard lot, which depends on monthly trading volume but requires a minimum deposit of $500. High-frequency traders and high-volume traders can set up MAM accounts at a notable cost advantage. Traders with a $25,000 portfolio qualify for commission-free trading and raw spreads of 0 pips, adding another potential benefit for MAM portfolio managers and their investors.
The FXTM contract specifications list a minimum spread of 0.1 pips on five currency pairs, confirming access to deep liquidity, a requirement for successful MAM accounts. FXTM is a transparent broker with audited performance statistics by PricewaterhouseCoopers Limited (PwC). FXTM’s slippage and requote data confirm outstanding order execution.
Pros
Excellent commission-based Forex pricing environment and transparency
Upgraded MT4/MT5 trading platforms plus proprietary mobile trading app
Quality market research and educational content for beginner traders
Proprietary copy trading platform, low minimum deposit, and high leverage
Cons
Limited choice of cryptocurrencies and commodities
Eightcap features a professional MT4 MAM environment and only accepts managers with proper authorization to manage funds on behalf of clients. Eightcap invested in its MT4 trading infrastructure to ensure portfolio managers have low-latency order execution with complete flexibility to manage sub-accounts. All order processing takes place on a centralized server, and MAM account managers can execute block orders with one click from their master account with automatic allocation to sub-accounts.
Eightcap’s Raw Account, available from a minimum deposit of $100, offers raw spreads from 0 pips for a commission of $7.00 per 1 standard lot. Eightcap lists seven currency pairs with a minimum mark-up of 0 pips, confirming access to deep liquidity, a requirement for MAM strategies. Eightcap also offers 250+ cryptocurrency assets, making it an industry leader. It is therefore a suitable broker for cryptocurrency MAM accounts.
Pros
Low minimum deposit and high leverage of up to 1:500
Competitive cost structure
Excellent technology infrastructure and seasoned management team
A MAM account is simply a vehicle that allows multiple accounts to be managed from one master account by an account manager. The purpose of a MAM account is to service a money manager and make it easier for the manager to serve their clients. Trades taken in the master account are copied in the sub-accounts, each of which is allocated to a different client.
How Safe are MAM Accounts?
The safety and security of any MAM account depends upon the regulatory environment and policies of the specific broker, as the portfolio manager has no ability to withdraw funds from the client sub-accounts. The MAM software handles all trading-related operations, and investors maintain complete control of their portfolios.
The primary risk to investors in a MAM account is the ability of the MAM manager, which is why investors must conduct appropriate due diligence on the manager. Forex MAM brokers usually offer in-depth statistics of their managers’ performances, assisting investors in their decision-making process.
What Should Investors Look for When Evaluating MAM Accounts?
The MAM account manager should have three to five years of verified trading history. Any lesser period makes for a higher-risk investment.
The maximum drawdown of the MAM account. This shows potential investors how steep the worst losses were from the account’s performance peak. As a rule of thumb, investors should avoid drawdowns greater than 20%.
The total assets under management and total active sub-accounts controlled by a manager can be useful information, as investors will probably lower their risk by avoiding MAM accounts with few followers and low allocated capital.
MAM accounts usually include a description of their trading strategy, which investors should pay close attention to, to ensure the approach of the portfolio manager, and the risk appetite, is compatible with their own.
Who Can Manage MAM Accounts?
This depends on the Forex broker offering the MAM account. Some require professional certifications, or at the minimum, demand MAM portfolio managers qualify for a professional account under local regulations. Some brokers ask for specific trading history and performance statistics, and only grant MAM manager status to those clearing a certain threshold. However, many Forex brokers allow anyone to manage MAM accounts.
Legally, the question of who can manage MAM accounts is a grey area, which can depend in each case on the regulation of the Forex broker and the countries of residence of the MAM account manager and investors.
The Benefits of MAM Accounts
MAM accounts can potentially provide investors with a range of benefits:
Traders lacking time or expertise may be able to benefit from a profitable MAM manager.
Portfolio diversification across numerous strategies and asset classes.
Complete portfolio control and oversight.
Oversight from the regulatory environment of their MAM broker.
What is the Difference Between a MAM Account and a PAMM Account?
PAMM managers usually invest in their strategy, and each sub-account participates based on their deposit size as a percentage of total assets under management. A PAMM account distributes profits and losses of the manager to all investor sub-accounts proportionately.
MAM accounts offer greater flexibility, allowing account managers to assign varying leverage to individual sub-accounts, taking investor preferences into account.
What are the Account Risks of MAM/PAMM?
Assuming investors trade with a trustworthy and secure MAM/PAMM broker, the account risks remain primarily with the portfolio manager and their ability to navigate all market conditions while delivering consistent annualized performance within acceptable overall risk parameters. Investors can decrease their risk by diversifying across different brokers and strategies.
How Can I Ensure a MAM/PAMM Broker Offers a Trusted and Established Trading Environment?
Traders and investors should trade only with those MAM/PAMM brokers who have maintained a clean regulatory track record for at least five years. Publicly listed brokers add another layer of security and oversight, while the availability of a third-party insurance policy securing deposits is another helpful criterion to use in broker selection. Ideally, MAM/PAMM brokers should list their auditors and provide updated, audited performance statistics.
Final Thoughts
Investors looking to invest in a MAM account will have different preferences, but all should focus on finding a MAM Forex broker offering competitive trading conditions. A list of criteria that will be suitable for most should include:
Broker regulation and security, with a clean track record of at least five years.
Excellent order execution statistics, preferably ECN/NDD/STP execution and post-trade technology, low slippage, and no requotes.
Flexible leverage and negative balance protection, ensuring trading loss can never exceed the total deposit.
Access to a good trading platform like MT4, with full support for automated trading and no restrictions on the use of EAs and strategies, if the manager is not following a purely discretionary long-term trading strategy.
VPS and API trading, allowing 24/5 Forex trading and the connection of advanced algorithmic trading solution.
A broad choice of deposit and withdrawal methods, including third-party payment processors, and no internal fees.
Published, transparent in-depth performance statistics on all MAM accounts.
FAQs
What is a MAM account in Forex?
MAM is a software developed specifically for MT4 that allows portfolio managers to manage sub-accounts from one master account. It has expanded to include the MT5 trading platform, and some brokers also offer proprietary platform MAM solutions. A MAM account in Forex connects to a master account in an automated process, copying all trades, primarily via PAMM (Percent Allocation Management Module) or LAMM (Lot Allocation Management Module).
What is a MAM broker?
A MAM broker offers the software and infrastructure to support portfolio managers and investors.
What is MAM trading?
MAM trading refers to investors connecting their accounts to a master account managed by seasoned traders or asset management firms. They pay a performance fee under a limited power of attorney (LPOA) agreement between manager and investor, under the corporate umbrella and regulatory framework of the MAM broker.
How do I open a MAM account?
You open a MAM account by finding a broker which offers them – several brokers offering MAM accounts are listed on this page. Select the best broker for you then contact them to ask about options for MAM accounts as either an investor or manager.
I’m a trader and manage my own capital. I trade the major Forex pairs, some Futures contracts, and I rely entirely on Technical Analysis to place my trades. Today, I am also a Senior Analyst for DailyForex.com. I began trading the markets in the early 1990s, at the age of sixteen. I had a few hundred British pounds saved up (I grew up in England), with which I was able to open a small account with some help from my Dad. I started my trading journey by buying UK equities that I had read about in the business sections of newspapers. The 1990s were a bull market, so naturally, I made money. I was fortunate enough in my early twenties to have a friend that recommended a Technical Analysis course run by a British trader who emphasized raw chart analysis without indicators. Having this first-principles approach to charts influences how I trade to this day.
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