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Forex Managed Account Report

Learn how to trade various forex accounts from a single platform without any
administrative or compliance issues.

Managing Forex Trading Accounts

Forex Basics

Organizational Structure

- CTA

- CPO/ Hedge Fund

Forex Basics

PAMM & LAMM Accounts

- LAMM

- PAMM

Forex Basics

Fee Structures

- Performance Fees

- Management Fees

- Commissions

- Combination Fee
  Structures

Forex Basics

Registration & Compliance

Forex Basics

Platform

Forex Basics

Marketing

Forex Basics

Conclusion

PAMM

Typically the PAMM account will use the aggregator model and distribute the forex profits/losses after the trade is complete and will actually take the trade as 1 lot size. This makes reporting very easy as all sub account entries and exits are at the same price.

There are also the FIFO and LIFO PAMM models. With these models trades are entered for each sub account individually rather than the one aggregate trade. With the FIFO model the first account in the trade will be the first account to exit the trade and with the LIFO the last account in will be the first account out. An example of this type of an account is if you have a master account with $100,000, comprised of 2 sub accounts; one with $60,000 (60% of the master) and one with $40,000 (%40 of the master) as the master makes a 10 lot trade the $60,000 account will send in a trade of 6 lots into the open market and the $40,000 will send in a trade of 4 lots. This is opposed to the aggregate PAMM, which will send in 1 trade of 10 lots and aggregate the profits/losses after the trade is closed out.

There are advantages and disadvantages to this model. The one advantage of the FIFO or LIFO models is that you add a little more anonymity to your trades. Typically banks and market makers pay more attention to orders over $20,000,000 than they do to smaller orders. If your trading strategy is shorter term your trades will have more anonymity if you send in multiple smaller orders rather than 1 large one. Your slippage and execution issues should decrease because it is easier to fill smaller orders than larger orders.

However there is also one big disadvantage to the non-aggregate model; reporting. Basically when you use the LIFO or FIFO model the forex trades are being sent through at different times for different accounts. This is also the problem with the LAMM module. Because trades for different accounts are being sent at different times you run into an issue of deciding which numbers to report in your performance and you have certain clients performing differently from others because they could not get their trades filled in time and the price moved away from them.

Typically what most professional money managers use is an aggregator PAMM model and they tweak their system to fire off multiple smaller orders instead of one large block order. This way execution is more likely to happen properly and all of the sub accounts in the PAMM will receive the same level of execution.

Managing Forex Trading Accounts   Managing Forex Trading Accounts
Forex trading involves significant risk of loss and is not suitable for all investors. While you can earn a cash bonus,
you can also lose money due to the inherent risk of trading. Read full disclosure.

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