Forex trading is associated with a high risk of losing money. Therefore, novice traders need to master risk management, which is the foundation of asset trading. Check out the slides for more!

1. FOREX Money Management:
PAMM and MAM Accounts

2. Why is money management
important?
Forex trading is associated with high risk of losing money.
Therefore, novice traders need to master risk management,
which is the foundation of asset trading.

3. What is money management?
Money management is a system and a set of methods aimed
at increasing capital: profiting from investment or trading and
management of risks in foreign exchange markets.

4. Money management principles
in Forex
If you want to make trading without risks, the only way is to
trade on a demo account. This means you can learn, test and
use trading strategy to trade better in the markets and increase
your skill, then you can proceed to trading using a real account.

5. Money management principles
in Forex
1. Set the goal
The goal defines the methods and means. Define the goal itself, track your
progress and estimate how long it will take you to reach your goal.
2. Invest only free money
Read books, articles, analytical summaries and other training materials on
trading to master various money management techniques.
3. Diversify Assets
Diversification means you cannot invest all your money in just one asset.
4. Manage risks
You need to understand what kind of a reward ratio you can per trade and
what risks you are ready to take on.

6. Money management principles
in Forex
5. Strictly adhere to money management rules
You should adhere to the rules of diversification, hedging and other
methods to minimize possible losses.
6. Avoid trading with high leverage
Trading leverage can double your deposit from a trade in a matter of
seconds, but the risks will increase manyfold. Leveraged trading is for
professionals only.
7. Psychological stability
Make sure you are full of energy, and only then start trading. Forex trading
requires maximum concentration.

7. Money management principles
in Forex
8. Set a Stop Loss
By setting a stop loss, you are giving yourself the assurance that you will
not lose more than you allow yourself to lose.
9. Trailing stops
A trailing stop order means that the order will automatically move higher
with a percentage step set by the trader.
10. Plan entry and exit points in advance
You need to know another rule: determine in advance not only the entry
points to the deal, but also the exit: you control not only potential losses,
but also profits.

8. Money management principles
in Forex
11. Be Consistent
The best method is to follow a strategy in a disciplined manner and follow
the steps consistently.
12. Don’t be limited to just one tool
You can achieve the best result if you use an integrated approach:
combine strategies, select effective ones and abandon those that do not
work, use different tools for the same goals.

9. What is PAMM?
PAMM are special trading systems belonging to brokers which are
designed to manage multiple investor accounts.
PAMM accounts allow you to trade investors’ assets without having to
transfer them to a manager. That is, depositors’ money does not leave
their own accounts, but the manager can trade them.

10. What is the difference between
PAMM and MAM accounts?
These work according to the same principle: a managing trader connects
the investor’s account and trades funds. But MAM accounts allow you to
cancel all orders and close positions, and then turn off the trading account
at any time. PAMM accounts have a minimum trading period, during
which the trading account holder cannot influence their funds in any way.

11. What are PAMM and MAM accounts
for?
PAMM and MAM trading accounts can serve as a good alternative to
trading on demo accounts. In the course of trading, you can study and
analyze the transactions of the managing trader, taking into account the
peculiarities of their trading, mistakes and accuracy of following money
management strategy.

12. In conclusion
The rules of money management help many traders control possible
losses and risks, better understand the principles of the structures of
financial markets, improve trading experience and bring it to a new,
previously unattainable level.
So, you should keep in mind everything that we have mentioned above.