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Looking for PAMM broker advice & recommendation

  • #1
  • First Post: Oct 8, 2013 7:14am Oct 8, 2013 7:14am
I would like to ask for recommendation for a good true ECN broker that offers PAMM accounts. Currently it will just be my funds, but I aspire to become a legit PAMM fund manager. Any guidance from my fellow experienced traders would be greatly appreciated. Preferably I would like to trade with a reputable broker, that is regulated and funds are segregated and protected. Any other advice on how I may be able to kickstart my fund business and attract investors, would be extremely helpful. Marketing, website, ect...Thank you fellow FF members.
  • #2
  • Oct 8, 2013 7:40am Oct 8, 2013 7:40am
ATC Brokers(IB for FXCM Active Trader), Dukascopy, LCG, Alpari UK ECN account and FXCM Active Trader.

All regulated and funds are segregated.

I would think that a proven profitable trade history would be the most important aspect to attract investors.
  • #3
  • Oct 8, 2013 8:14am Oct 8, 2013 8:14am
Quoting MKFXTrader
I would like to ask for recommendation for a good true ECN broker that offers PAMM accounts. Currently it will just be my funds, but I aspire to become a legit PAMM fund manager. Any guidance from my fellow experienced traders would be greatly appreciated. Preferably I would like to trade with a reputable broker, that is regulated and funds are segregated and protected. Any other advice on how I may be able to kickstart my fund business and attract investors, would be extremely helpful. Marketing, website, ect...Thank you fellow FF members.
How to attract investors?

Simple, if you will make the prove you are a winning trader they will come to deposit their money at your fund. If you can't make the prove you are winning no one will deposit money at your fund. Maybe also do a short description of your trading strategy. Don't make the description too big and explain everything you do, I saw someone was trying to attract investors in this forum by giving free signals. If the investors know how you apply your strategy exactly no one will come to your fund because they can trade by themselves. The numbers that prove you are winning are enough. However if you use some indicator to make those money I wouldn't say this because investors will think it only works in a short period of time.
  • #4
  • Oct 8, 2013 9:03am Oct 8, 2013 9:03am
You can forget about UK brokers - you need to be registered with the FCA to manage other peoples money, and thats fairly impossible for a private individual. It also depends on your country of residence, and where (and where not) you are marketing your service. Europe is rather complicated.

I think there are exemptions in the USA if you only have a small amount of clients, but not enirely sure about the current situation, and how applicable that is to foreigners, and where you are allowed to market and if you can take clients from other jurisdictions.

Generally speaking, you need to legally cover your ass. If a client sues you, you can easily get into deep shit if your paperwork/regulatory/legal stuff is not watertight. That means getting an attourney involved, and that means paying him fat fees. You also likely need to be registered as a moneymanager with the regulator, and they also want fees.

Its a bad idea. You are exposed to a lot of legal risk, and unless you can manage really big accounts(and you wont), its just not worth it.
  • #5
  • Edited 2:24pm Oct 8, 2013 1:29pm | Edited 2:24pm
Quoting shrike
Generally speaking, you need to legally cover your ass. If a client sues you, you can easily get into deep shit if your paperwork/regulatory/legal stuff is not watertight. That means getting an attourney involved, and that means paying him fat fees. You also likely need to be registered as a moneymanager with the regulator, and they also want fees. Its a bad idea. You are exposed to a lot of legal risk, and unless you can manage really big accounts(and you wont), its just not worth it.
Some brokers let you to run a PAMM fund without any license.
Clients can't sue him because they don't even know his real name and even if they know the money manager has no responsability of losing investor's money, when investor accepts to deposit money he also accepts the risk of losing all his money.
PAMM is no money management in the traditional sense, the broker still manages investor's money. If not, why are there brokers who don't ask the trader for a license? My broker, Hotforex doesn't ask for any license.

If your country doesn't allow you to run a PAMM fund then you're living in a communist country and better leave it.
Sometimes democratic countries are more communist than ex-communist countries (for example in USA poker online was illegal, in USA you can't trade CFDs, leverage is only 50:1 for forex).

My advice is look for a broker that doesn't want an autorization to open a PAMM fund.
  • #6
  • Oct 8, 2013 3:01pm Oct 8, 2013 3:01pm
I'm sure the all the 7-digit investors will pile up to get in on your anonymous Hotforex managed account..
  • #7
  • Oct 8, 2013 3:20pm Oct 8, 2013 3:20pm
I would if the trader would been able to show me a proof he is winning for years.
  • #8
  • Oct 9, 2013 1:57am Oct 9, 2013 1:57am
Im not sure I would trade a 7 digit amount if i had one! that amount is enought to fund my expenses for a decade or two LOL but yeah, I guess it really depends on teh account statistics, and transparency of the manager, if he has a good standing and a decent earning in a span of 6 months or more, I might invest. but not with such a crazy amount, 4-5 digits would do.
  • #9
  • Oct 9, 2013 2:55am Oct 9, 2013 2:55am
What fees can a manager reasonably charge on a 4 or 5 digit account? If its the usual 2/20 its just peanuts. Not worth it at all in my opinion. CTAs and hedgefunds have way higher minimums for a reason.
  • #10
  • Oct 9, 2013 3:30am Oct 9, 2013 3:30am
I'm not a fan of PAMM but I'm trading with HotForex and it just launched the new PAMM v2 with some advantages. I think you should try it! http://betapamm.hotforex.com/
  • #11
  • Edited 4:23am Oct 9, 2013 4:01am | Edited 4:23am
@Str8 and a few others - I appreciate all the constructive feedback.

@Shrike - You should really read into how PAMM management accounts work. Please try not to talk someone out of doing something, before they even get started. Liability, amount needed to invest, license, compensation, ect... I'm not looking to start a hedge fund bro. Let's be realistic with the 7 figure investor hypothesis. Not that I would turn it away.


Any other suggestions would be greatly appreciated. I'm still looking into how to properly set up a website and how and where I would market myself. Wonder if anyone has an example website they know of, that I can take a look for an example.


I'm just looking to fulfill a dream guys. I appreciate constructive feedback and guidance. Thank you.
  • #12
  • Oct 9, 2013 4:31am Oct 9, 2013 4:31am
You can trade other peoples money with a "Power of Attorney" using a PAMM account ... just go talk to the brokers. The first step would of course be to build a verified track record. I would suggest you to read:
[highlight=rgba(255, 255, 255, 0)]"How to Trade a Currency Fund: The step by step guide" by Jarratt Davis[/highlight]

Check this one out ... could be a place to start.
[highlight=rgba(255, 255, 255, 0)][/highlight]
  • #13
  • Oct 9, 2013 4:40am Oct 9, 2013 4:40am
Quoting fido
You can trade other peoples money with a "Power of Attorney" using a PAMM account ... just go talk to the brokers. The first step would of course be to build a verified track record. I would suggest you to read: "How to Trade a Currency Fund: The step by step guide" by Jarratt Davis Check this one out ... could be a place to start.
Thank you very much for the book tip and the link Fido.
  • #14
  • Oct 9, 2013 5:07am Oct 9, 2013 5:07am
I'm not trying to talk you out of it. I just think you dont understand the legal implications. Nor can you without having legal expertise. You can get away with pretty much anything, until you can't. You certainly cant market to eu or u.s. retail clients.
  • #15
  • Oct 9, 2013 7:41am Oct 9, 2013 7:41am
Quoting shrike
I'm not trying to talk you out of it. I just think you dont understand the legal implications. Nor can you without having legal expertise. You can get away with pretty much anything, until you can't. You certainly cant market to eu or u.s. retail clients.
I don't understand why if you don't have legal expertise you can't market to eu (of course u.s. retail clients are banned from brokers outside u.s.)
For example in my country PAMM aren't regulated at all so there is no one who can give me a license. If I wanted to open a PAMM fund I could market to eu because europeans can still open an account at my broker and they are investors not money managers so they don't need any license to deposit at my fund.
Do you want to say I'm not allowed by the laws of other countries to market? Sorry, but I only respect the laws of my country if I'm physycally located in my country.
  • #16
  • Oct 9, 2013 8:01am Oct 9, 2013 8:01am
Where do you live? I am talking Europe, and here its basically impossible to manage retail client money. Not sure about copy trading schemes. I would also point out, that clients sue ALL the time, regardless of merit. That alone is expensive, even if the lawsuit is dismissed.

And what manager fees/revenue do you expect, if you manage lets say 100K ? I fail to see how this is an attractive proposal.
  • #17
  • Oct 9, 2013 8:15am Oct 9, 2013 8:15am
If you want to manage money for smaller retail clients some sort of signal service is probably the best way to go. Otherwise it would be easier to have just a few wealthy ones. I don't really see have they can sue you if they sign a power of attorney.
  • #18
  • Edited 5:52pm Oct 9, 2013 8:48am | Edited 5:52pm
Quoting shrike
Where do you live? I am talking Europe, and here its basically impossible to manage retail client money. Not sure about copy trading schemes. I would also point out, that clients sue ALL the time, regardless of merit. That alone is expensive, even if the lawsuit is dismissed. And what manager fees/revenue do you expect, if you manage lets say 100K ? I fail to see how this is an attractive proposal.
I've also looked and read into this subject, I conclude that you are NOT correct in your assumptions. Again, I am NOT looking to start a hedge fund. If you're not familiar with how PAMM accounts work, or how investors participate in such ventures, then I would request that you learn about them. You're providing false information to those that may visit this thread in the future. You can't be sued for trading a PAMM account that is participated by retail investors. A PAMM account also means YOU will have skin in the game as well. If I'm wrong then please post something of relevance to your claims. You're legal advice perhaps falls in line with running a hedge fund, not a PAMM account. Sure there are some brokers that won't allow U.S clients to participate in your fund, but that has more to do with the brokers policy on U.S clients as a whole, and NOT because you need to be licensed and regulated. That is my understanding, unless I come across something else different.

Hedge fund managers and private managed accounts just because they are licensed doesn't mean diddly. You don't think those money managers lose? EVER? Most of them perform worst then the S&P. The only time investors sue them is when money managers run illegal ponzi schemes. Most investors that have money to invest understand the risk associated with their chosen investment vehicle. I can assure you that what I am stating is fact, as I'm previously licensed and employed with a major investment bank.

BTW - Russia(Where str8 is) is consider to be in Europe.

Again for all visiting the thread, I'm just looking for some concrete advice, on how I can get started and have the exposure needed to attract investors into my PAMM fund. Any helpful advice and guidance would be greatly appreciated. Thank you.
  • #19
  • Oct 9, 2013 9:04am Oct 9, 2013 9:04am
Oh, Russia. With Europe i meant EU, and i know its not possible in UK, Germany or Austria - and i doubt in most other EU countries too. Not entirely sure how many clients would want to send their money to Russia.

I gave no legal advice. I reccomended to GET legal advice for people who would consider something like that, preferably from a professional with expertise in the field, and not Google. But by all means, if you think you are prepared, go ahead. I wish you the best of luck.
  • #20
  • Edited 10:13am Oct 9, 2013 9:11am | Edited 10:13am
Quoting shrike
Oh, Russia. With Europe i meant EU, and i know its not possible in UK, Germany or Austria - and i doubt in most other EU countries too. Not entirely sure how many clients would want to send their money to Russia. I gave no legal advice. I reccomended to GET legal advice for people who would consider something like that, preferably from a professional with expertise in the field, and not Google. But by all means, if you think you are prepared, go ahead. I wish you the best of luck.
I'm not in Russia, nor am I looking for a Russian broker. Please read my initial post. I was merely pointing out that str8 was from there since you had asked him.

Again your statement regarding licensing in Germany/Austria and most European countries is misleading. Thank you.
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