Q: In brief, what is MAM account and how does it work?
MAM stands for Multi-Account Manager. Other brokers might also refer to this type of account as a PAMM (Percent Allocation Management Module). It’s a technical software setup that allows for multiple client accounts to be automatically consolidated into a single, centralized terminal for the account manager to trade from. In our case, we use a single installation of the trading terminal program MetaTrader 4 (MT4) to trade each strategy. The MAM is set up on the broker’s server side, so allocation is instantaneous.
This solution fully automates the process of distributing profit/loss and trade volumes across all accounts, mostly removing the potential for human error with trading via multiple copies of MT4. When we enter a trade into our central MT4, it automatically executes the trade across all attached client accounts at the exact same time, opening trades at size in proportion to the equity level of each account. So many of our trade entries and exits are incredibly time critical, and each extra second saved can potentially be worth thousands of dollars.
Q: What some advantages of using a managed account instead of self-directed forex trading?
We are professional traders with years of experience, thousands of trades and billions of dollars in volume under our belts. While self directing trading can be successful, our clients rely on us to trade on their behalf, and we take on the responsibility of putting in up to 20 hours a day along with all stresses and skills involved to make their accounts as profitable as possible.
Having your account managed by a professional trader is an entire hands off an experience where the manager does all the work involved with trading the account. All of our trades are analyzed by our team and executed manually by our traders. While Expert Advisor robots and trade copying can be compared, the market is too complex and has far too many variables for a single algorithm or robot to operate consistently and effectively.
Q: What should I look for when choosing a manager?
You should always look for managers who are highly transparent, can offer a robust history and are open to receiving and answering any question that you as a client may have.
Q: What percentage of my portfolio should I allocate to each manager? Should I use more than one MAM account?
It’s really up to you, depending on what your risk tolerance and diversification strategy are. We have clients who prefer to have their investment broken up across several different trading strategies and instruments, although most prefer to. Market conditions are always changing, and day-to-day, the money markets will be moving differently to the commodity markets, which will be moving differently to the equity markets.
Q: How are managers typically compensated for their services?
Most retail managers run on a profit-share and high waterline basis. That is, they take a percentage cut (often between 5-25%) of profits and don’t take a further fee unless they surpass that profit level in the future. This is to prevent a manager from taking a loss and then taking a cut of what essentially is a recovery of losses in the following months.
Also very common, especially among Hedge Funds are flat annual management fees, where managers charge a percentage of the overall invested equity balance.
Q: What are the typical minimum amounts to invest in a MAM account?
These can vary greatly depending on the management company, instruments, and operating country, but our minimum is US$ 2,000 With 0.30 to 1,00 percent Daily return.
Q: Can I choose to withdraw my funds at any time from my MAM account?
After the minimum investment period ends, we provide our clients with regular withdrawal windows to take out all or part of their capital and profits.
At any particular time, we have multiple positions open in the market, so we ask our clients for two weeks notice of their intent to withdraw. This is so that we can safely settle positions and not jeopardize or sabotage existing and potential client profits.
Q: Can I see the performance of my MAM account in real time? How should I evaluate the performance of my manager?
We’ve always had the philosophy that monitoring your account in real-time is an unhealthy way to follow your account. Investing in the markets is a long-term undertaking, and following the short-term ups and downs, especially for inexperienced investors is a great way to develop an ulcer. We do however provide our clients with a tracking link page, which is regularly updated and gives them both visual and statistical analysis of the standing of their investment.
How you evaluate your manager’s performance should be down whether their strategies and results are in line with your own personal investment goals and risk appetite.
Q: Do MAM accounts utilize leverage? Is this something I can customize based on my risk tolerance?
All accounts utilize leverage, however, it is up to your MAM provider to keep the risk under control, this is something that should always be discussed before your initial investment.
Q: I’d like to learn more about the MAM account service offered by your company, The EarnOpen. What are some of the benefits of trading room access?
Something I really enjoy about the trading room is that people are always learning. For the most part, people that are interested in investing are always interested in learning to trade. So when I created the EarnOpen I told myself I wanted to make it in a way that would allow clients to learn, stay involved, and always be able to ask questions to me directly. This creates an environment where people are allowed to simultaneously make money while also learning to trade. If one day they want to take control over their account and trade for themselves than for us, its mission accomplished.
Q: Please tell us about your trading strategy. How has your historical performance been like?
I feel like I get asked this question the most. All I can say about my strategy is that it is ever evolving. There are a million ways to make money in the FX market, the idea is to find a couple of strategies you like and fine tune them as much as possible until you are successful. I created a custom indicator over the years that helps me a lot with my setups, I am a firm believer it still works because I have never disclosed it with anyone else. For the performance part of this question, we prefer to aim for 5-10% monthly to our clients, this allows for very nice compounded gains. We often have months much higher but we have found it is better to focus on the smaller gains with more accuracy than bet the farm on every trade.
Q: What’s the best way to get in touch with you to learn more about your services?
One can always get a hold of me on my website Earnopen.com you can just sign up for free and come in and ask me direct questions. However right now it is under construction while we implement some new exciting features, my email is [email protected] and I will always respond within a day or two, depending on how crazy the market is that day!
Thanks very much for your time.
Thank you as well, I enjoyed the interview.