› MAMM and LAMM account - Pros and Cons

MAMM and LAMM account - Pros and Cons

22.02.2018, 11:34

While brokerage firms provide a profusion of investment choices, the investors prefer to make an investment in Forex. The most caught-on investment is PAMM, in which the money is poured into the account of the manager. As required by the rule, there are some restrictions on the minimum deposit, withdrawal of funds is feasible throughout the rollover, taking place at a certain time- for instance, once a week.

Many investors would crave for more ways to monitor their funds. Thus, other investment choices have been made to tailor the investors need- in particular, MAM and LAMM accounts.

Features of MAM

The interpretation of MAM is Multi Account Manager. The outstanding point of this technology is that the manager through his trading terminal can simultaneously control other accounts embedded to him. He can effectively design his lot sizes based on the size of the deposit. The account management mechanism is established within Meta Trader trading terminal.

This mechanism creates many conveniences for both managers and investors. The manager can easily control and open transactions on hundreds, even thousands of customer accounts. Investors fully take chare of their funds and at any time can control the account in their own hands. Strikingly, the manager cannot access the client’s money- that is, he cannot withdraw them, transfer them to another account, etc.
Given all the benefits cited above, it is not surprising that MAM accounts are now gaining currency among investment options.

Features of LAMM

LAMM can be interpreted to Lot Allocation Management Module or the Lot Distribution Management Module. With LAMM account, the trader only does business with his account while his transactions are duplicated in the accounts of investors. In the case that the sizes of deposits of the trader are different from that of investor, the automatic re-calculation of the sizes of the opened positions activates based on the specifies settings.

Another striking feature of LAMM account is that in LAMM account, the investor can disconnect from the signals of one trader and opt another. This feature is actually convenient given that every trader has periods of drawdown. When “your” trader launched a string of successful transactions, you can expect some drawdown. Hence, it is suitable for this period to duplicate the signals of another trader, who has just come out of drawdown and re-started trading in a plus.
Hence, the trader, in LAMM account, can have full access to his/her own funds, and it is feasible to easily opt the most reasonable at the moment the trader whose trading signals will be duplicated.

It should be noted that some LAMM services do not pave the way for copying signals if the size of the investor’s deposit is less than the trader’s deposit. However, these services are now losing their ground as in most cases, the sizes of lots are modified automatically to fit the size of the deposit.

LAMM also embrace some disadvantages, such as:

  • The manager does not comprehend what amount he actually monitors since he trades only on his account;
  • The manager does not take any responsibility for the upshot of the trade.

It is important to strictly control the account because when you turn off the terminal, some already activated transactions may stay unclosed if the manager at this time closes them. In this case, they should be closed manually.

What to choose MAM or LAMM?

MAM account is suitable for those who do not want to spend time interpreting the managers work.
LAMM account is for those who like to independently decide everything themselves- for instances choose traders, analyze work.

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